Durham, NC/Toronto, ON -- December 18, 2001 -- Duke University Health System (DUHS) and MDS Inc (NYSE: MDZ - news; TSE: MDS - news), an international health and life sciences company, are pleased to announce that they have initiated the next stage of a multi-year agreement.

There are three main components to this stage of the agreement:

MDS will manage the Duke University Health System clinical laboratories including those at the Duke University Hospital, the Raleigh Community Hospital and the Durham Regional Hospital. These laboratories perform 3.8 million tests annually.

Duke and MDS have also agreed to consolidate and integrate the clinical laboratory services across the full Duke University Health System.
Duke and MDS have signed a letter of understanding to form a joint venture to provide outreach laboratory services for the region.

Duke's current clinical laboratory testing and service network consists of a number of rapid-turnaround or 'STAT' laboratories, regional laboratories and patient service centers. The new Duke-MDS Laboratories in North Carolina will provide integrated laboratory testing, information and related services for all Duke-affiliated patients and their physicians. "MDS is an acknowledged leader in the provision of innovative, high quality laboratory services. This next stage in the Duke-MDS Laboratories partnership will strengthen our health system and provide an increased level of service for our physicians and their patients in a cost-sensitive environment," said Michael D. Israel, vice president, hospital operations and CEO of Duke University Hospital.

"MDS is very excited to be working with Duke on this laboratory initiative," said Alan Torrie, president and chief executive officer of the MDS Diagnostic Sector. "MDS and Duke share similar values: a strong commitment to community, to innovation and to the provision of high quality care. There are also many areas of broader synergy between our two organizations in new scientific areas, such as those in the drug discovery and development arena."

Duke University Health System is a non-profit, fully integrated academic health care system dedicated to providing patient care, professional education and biomedical research. The Duke University Health System includes Duke University Hospital; the Duke University School of Medicine; Duke School of Nursing; Durham Regional Hospital; Raleigh Community Hospital, ambulatory surgery centers; primary and specialty care clinics; home care, hospice, skilled nursing care; wellness centers; and community-based clinical partnerships.

As a part of MDS Inc., the MDS Diagnostic Sector is a leading provider of diagnostic laboratory services in North America. MDS Inc. (NYSE: MDZ; TSE: MDS) is an international health and life sciences company. The MDS focus is on using science to advance health. It does this by providing: laboratory testing, imaging agents for nuclear medicine testing, sterilization systems for medical and consumer products, research services to speed discovery and development of new drugs, therapy systems for planning and delivery of cancer treatment, analytical instruments to assist in the development of new drugs, and medical/surgical supplies.

For further information on: Duke University Health System visit www.dukehealth.org

For more information on MDS Inc., visit www.mdsintl.com

For further information re Duke:Jeff Molter, Director DUMC and DUHS News Office, (919) 660-1304
For further information re MDS: Patricia Everitt, Director of External Communications, MDS Diagnostic Sector,
(416) 213-4258, peveritt@mdsintl.com

For further information please contact our media department