For approximately two decades, AHP has been a global scientific leader in the search for safer and more effective treatments for hemophilia. As a result of this commitment and a significant investment in recombinant DNA technology, our efforts have led to important medical advances in the treatment of hemophilia: the development of the first recombinant factor IX product (BeneFIX for hemophilia B) and the first albumin-free formulated factor VIII product (ReFacto for hemophilia A).

The original hemophilia treatments developed in the 1960s and 1970s were derived from purified human blood plasma, which resulted in widespread transmission of viral pathogens. Despite major improvements in purity and viral safety, today's plasma-derived products still give rise to patient concern about the potential for blood-borne diseases. AHP's hemophilia product portfolio employs a theoretically safer approach using advanced biotechnology tools to produce clotting factors from non-human production cells.

The anchor products of our Hemophilia franchise are BeneFIX and ReFacto. BeneFIX, the only recombinant factor IX product, represents the state of the art in hemophilia B treatment because it is not derived from human plasma. BeneFIX was launched in the United States in 1997 and in Europe in 1999. It now is the number one selling hemophilia B product in the world, with sales increasing by 18 percent in 2000. BeneFIX continued to expand through commercialization in several new markets during this past year, and commercial launches are scheduled in additional countries during 2001.

ReFacto, the first recombinant factor VIII product without human serum albumin added to the final formulation, further reduces the theoretical risk of viral contamination for hemophilia A patients. ReFacto was launched throughout Europe during 1999, and sales surpassed $90 million during its first full year on the market. The FDA approved ReFacto in March 2000, and the product was launched in the United States in January 2001. AHP plans to invest approximately $100 million in a manufacturing facility in St. Louis, Missouri, to meet the growing demand for ReFacto.

Our research into hemophilia treatments continues to focus on increased patient safety and efficacy. During 2001, we are scheduled to begin clinical trials on an improvement to our existing ReFacto product. This improved version of ReFacto will be produced without any animal- or human-derived proteins throughout the entire manufacturing process.

In addition to our focus on improving existing treatments, we formed an alliance during 2000 with Targeted Genetics Corporation to pursue gene therapy treatments for hemophilia A and B that eventually may offer a cure for these diseases.