LAUSANNE, Switzerland, May 7, 2004 – Debiotech S.A. today announced a strategic alliance with Baxter Healthcare Corporation to develop renal therapy systems and technologies. The initial agreement will focus on the development and marketing of next-generation dialysis systems intended to treat end-stage renal disease (ESRD) patients. The companies share the goal of delivering new technology that will further improve the performance of dialysis therapy, ultimately making it easier and more effective for patients and heath-care providers.

"This alliance with Baxter, a leader in the renal care universe and particularly in the peritoneal dialysis market, is a very important step for Debiotech’s future,” said Frédéric Neftel, M.D., president and chief executive officer, Debiotech S.A. “We are delighted and extremely proud to combine our efforts with Baxter toward improving the quality of life of renal failure patients. This agreement, and its long-term potential, represents a significant recognition for all Debiotech engineers and partners who contribute to the company’s development of novel concepts and ideas becoming breakthrough products. We are looking forward to working closely with Baxter and hope the relationship will serve to foster other successful partnerships and collaborations for Debiotech in the future.”

Under the agreement, Debiotech and Baxter will initially seek to develop a new dialysis product based on proprietary Debiotech platforms and technologies. Baxter will manufacture, sell and distribute the product under an exclusive worldwide license from Debiotech, with the exception of Japan where alternative arrangements have already been established. The two companies will look to partner on a series of dialysis advancement programs, based on Debiotech technology platforms and exclusively licensed to Baxter for all renal replacement therapies. The first agreement will include up to $18 million in payments to Debiotech (contingent upon achievement of development, launch and sales milestones), in addition to royalties of an undisclosed amount.

About ESRD (End-Stage Renal Disease) and Treatments
ESRD is an advanced stage of chronic kidney disease that requires some form of therapy to replace lost renal function. The incidence and prevalence of ESRD have doubled in the past 10 years and are expected to continue to grow. Worldwide, approximately 1.5 million patients are being treated for ESRD. Two forms of dialysis are most commonly available to ESRD patients: peritoneal dialysis (PD) and hemodialysis (HD).

In PD, extra fluids and waste are removed from the blood inside the body, using the body’s own peritoneal membrane, or abdominal lining, as a natural filter. In this form of dialysis, blood never leaves the body. Dialysis fluid enters the peritoneal cavity through a flexible catheter surgically inserted in the abdomen. Extra fluid and waste travel across the peritoneal membrane into the dialysis fluid, which is then drained from the abdomen through the catheter after a pre-determined dwell period. During HD, blood is removed from the body through needles inserted into a blood vessel. The blood is then pumped through a machine containing an artificial kidney filter called a dialyzer, that cleanses the blood, which is returned back to the body. Most HD patients receive treatment at a special dialysis center and typically require four-hour dialysis sessions three times a week. A team of trained health-care professionals supervise and deliver therapy during the dialysis sessions.

About Debiotech S.A.
Debiotech S.A. specializes in the research and development of innovative medical devices in the field of drug delivery systems, drug eluting stents, electronic infusion systems, dialysis, diagnostics and imaging devices, implantable drug delivery systems and micro-systems for insulin and peptide drug delivery. http://www.debiotech.com. Debiotech has numerous exclusive collaboration agreements with leading companies in the medical device and pharmaceutical fields.

This news release contains forward-looking statements that involve risks and uncertainties, including technological advances in the medical field, product demand and market acceptance, the impact of competitive products and pricing, and other risks detailed in the company's filings with the Securities and Exchange Commission. These forward-looking statements are based on estimates and assumptions made by management of the Company and are believed to be reasonable, though are inherently uncertain and difficult to predict.

Contact:

Debiotech SA
Avenue de Sevelin, 28
CH-1004 Lausanne, Switzerland
Phone: +41-21-623-60-00
Fax: +41-21-623-60-01
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