Toronto, CANADA / Nashville, TENNESSEE--June 8, 2000--MDS Inc., (NYSE: MDZ/TSE: MDS) an international health and life sciences company, today announced a US$15 million strategic investment in INPHACT, a leading provider of web-based medical imaging services and software. The deal includes an exclusive agreement to launch INPHACT services in Canada and the rights to provide INPHACT services to MDS joint venture hospitals in the USA.

“We are delighted to be involved with INPHACT, a company on the leading edge of integrating digital information and communication technology in the field of medical imaging. The INPHACT technology improves the physician’s ability to quickly and cost-effectively fight disease.“ said Irene Kerr, Senior Vice President, Strategic Initiatives & Investments, MDS Diagnostic Sector. “As the first Application Service Provider (ASP) in the imaging market, INPHACT is a natural partner for us as we expand our diagnostic services capabilities.”

“We make PACS (Picture Archiving and Communications Systems) technology affordable and accessible to all hospitals and practices with imaging departments,” said Jon Lehman, CEO of INPHACT. “This investment and commitment from MDS will help us to further develop these services and ultimately expand their reach on an international basis.”

INPHACT uses the convergence of digital imaging, communications technology and the Internet to create an information rich technology platform for diagnostic imaging. The Application Service Provider (ASP) model allows diagnostic imaging departments to “rent” this sophisticated and comprehensive INPHACT technology platform. Hospitals and clinics of any size now have turnkey access to digital image archiving, Internet transmission of images and a fully functional radiology information system (RIS).

This technology platform includes RadWebä which provides physicians and radiologists 24 hour a day, 7 day a week immediate access to radiology images and reports from any location by viewing and transmitting the images over the Internet. With the INPHACT software, physicians can manipulate and enhance digital images for even greater detection capability. INPHACT plans to expand the technology platform in the future to include other imaging modalities such as cardiology.

INPHACT (www.inphact.com) is a privately held provider of Internet-based radiology services. It has strategic partnerships with GE Medical Systems and has contracts with 36 health care sites in 14 states. The INPHACT existing customer base accounts for more than one third of the over 350 million total radiology procedures performed annually in the US. In 1999, Telemedicine Today named INPHACT the top diagnostic teleradiology service provider in the United States for the third year in a row.

MDS Inc. (NYSE: MDZ/TSE: MDS) (www.mdsintl.com) posted $1.2 billion in revenues in fiscal 1999. It has more than 11,000 employees on four continents. The company serves a global market estimated to be more than $3 trillion. MDS affects the lives of millions of people each day through the provision of clinical laboratory services, imaging agents for nuclear medicine, research services to speed the discovery and development of drugs, therapy systems for planning and delivery of cancer treatment, and analytical instruments to assist in the development of new drugs.

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