AHP's Musculoskeletal franchise is the source of important new therapies for patients with joint and bone disorders. Led by Enbrel,a breakthrough biological treatment for rheumatoid arthritis (RA) that helps patients lead more active lives, this franchise is pursuing numerous opportunities to apply novel treatment approaches to bone, tissue and organ repair.

Enbrel was approved for marketing in the United States in November 1998 as the first biological treatment for the symptoms of moderate to severe RA. Discovered by Immunex Corporation -in which AHP is the largest shareholder -and co-promoted in North America by Immunex and Wyeth-Ayerst, Enbrel has received subsequent approvals in the United States for inhibiting the progression of structural damage in the joints of early stage RA patients and for treating juvenile RA. In 2000, its second full year on the market, Enbrel achieved global sales of $690 million - 84 percent growth over 1999. Thirty countries have approved Enbrel for the treatment of RA, including the European Union.

The Company and Immunex are investing more than $1 billion for the construction of two major biological manufacturing facilities to meet the growing demand for this product, driven by its use in rheumatoid arthritis as well as potential use in other therapeutic applications.

AHP also has a strong presence in the osteoarthritis (OA) treatment market with Synvisc, the leading viscosupplementation product in the United States. Synvisc is injected into the knee to restore lubrication and cushioning to the joint. Synvisc, jointly developed and marketed with Genzyme Biosurgery, increased sales by 44 percent to $179 million in 2000, and the product is included in the American College of Rheumatology's new recommendations for treatment of OA in the knee.

Additionally, the FDA has accepted the regulatory submission for rhBMP-2 as a treatment for long-bone fractures that require surgical management. The development of this unique product is discussed on page 8 of this report.

Other potential applications for rhBMP-2 include use in spinal fusion surgery (in collaboration with Medtronic Sofamor Danek) and dental/craniofacial surgery. Bone morphogenetic proteins also are being studied for possible use in soft tissue repair, such as tendons and ligaments.