Fine Chemicals: Degussa sells Raylo Chemicals and establishes a long-term supply partnership with Gilead Sciences

Dusseldorf (ots) - Degussa AG of Dusseldorf, Germany today
announced that the company has signed a definitive agreement under
which Gilead Sciences, Inc., of Foster City, California plans to
acquire Degussa's subsidiary Raylo Chemicals Inc. with its assets at
the Clover Bar site. Under the terms of the agreements and subject to
certain closing conditions, Gilead will pay approximately 115 million
euros to Degussa. In addition, Degussa has entered into long-term
agreements with Gilead for the supply of raw materials and the
manufacture of certain active pharmaceutical ingredients (API) for
Gilead products. The companies expect the transaction to close in the
fourth quarter of 2006.

Located in Edmonton, Canada, Raylo Chemicals is currently part of
Degussa's Exclusive Synthesis & Catalysts Business Unit with
approximately 200 employees at two sites, Clover Bar and Argyll Road.
Raylo's operations encompass custom manufacturing of API and advanced
intermediates for the pharmaceutical and biopharmaceutical
industries. Gilead has worked with Raylo over the course of the last
14 years, during which time Raylo has provided both development
expertise and commercial product on a large scale for Gilead.

Gilead intends to utilize this site primarily for manufacturing
development of investigational products, supplying API for clinical
research programs and contributing to new product launch supplies.
Degussa will ensure the business and supply relationships with
Raylo's existing customers (other than Gilead). The Raylo name and
the Argyll Road site will remain assets of Degussa.

Degussa will focus its European custom manufacturing sites to
produce high-value regulated intermediates and on-patent API from now
on. In executing its Asian strategy, the Business Line Exclusive
Synthesis will concentrate the production of pharmaceutical raw
materials, certain intermediates and off-patent API in the newly
formed Degussa Lynchem joint venture in Dalian/China or with other
long-term co-operations in India and China. This horizontal
integration will allow attractive value proposals for customers based
on Degussa's technological leadership, its track record in customers'
intellectual property protection, worldwide compliance with good
manufacturing practice (GMP) and high environmental, safety and
health standards.

Dr. Klaus Engel, Chairman of Degussa's Management Board: "The
long-term supply agreements with an innovative company such as Gilead
prove Degussa's strong position in exclusive synthesis and are a
landmark for the successful cooperation with a leading pharmaceutical
company. It underlines our sustainable growth strategy in Fine
Chemicals, which is one of Degussa's core businesses. The sale of
Raylo is a key step in our strategy to shift production capacity from
the Western Hemisphere to Asia. For the Raylo employees this
transaction opens new and attractive opportunities within Gilead."

John C. Martin, PhD, President and CEO, Gilead Sciences: "Gilead
has had a long-standing and successful partnership with Degussa and
Raylo, and we look forward to welcoming our colleagues at Raylo to
the Gilead team. As our company continues to grow, so does our need
for chemical and manufacturing expertise. This agreement enables us
to rapidly provide adequate supply of Gilead's investigational
products for preclinical and clinical evaluation."

Gilead Sciences is a biopharmaceutical company that discovers,
develops and commercializes innovative therapeutics in areas of unmet
medical need. The company's mission is to advance the care of
patients suffering from life-threatening diseases worldwide.
Headquartered in Foster City, California, Gilead has operations in
North America, Europe and Australia (www.gilead.com).

With sales of 335 million euros in 2005, Degussa's Exclusive
Synthesis & Catalysts Business Unit focuses on the custom
manufacturing of chemical catalysts, advanced pharmaceutical
intermediates and active pharmaceutical ingredients. Through its
global network of sites and R&D facilities, the business unit offers
seamless services ranging from synthesis development on lab-scale to
commercial production in its different USFDA approved facilities. It
is also a leading supplier of catalytic system solutions, offering a
broad portfolio of catalysts as well as all-round services for the
life science, fine chemicals, industrial chemicals, intermediates and
polymer industries.

Editorial note:

A press briefing will be held in this connection at 12 p.m. noon
on Wednesday, June 21, 2006, at the Degussa building at
Weißfrauenstrasse 9 in Frankfurt. The participants will include Dr.
Alfred Oberholz, Deputy Chairman of the Management Board, and Patrik
Wohlhauser, Head of the Exclusive Synthesis & Catalysts Business
Unit.

Degussa is the global market leader in specialty chemicals. Our
business is creating essentials - innovative products and system
solutions that make indispensable contributions to our customers'
success. In fiscal 2005 around 44,000 employees worldwide generated
sales of
11.8 billion euros and operating profits (EBIT) of 940 million euros.

Originaltext: Degussa AG
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ISIN: DE0005421903

Contact:
Hannelore Gantzer
Spokeswoman
Corporate Communications
T +49-211-65041-368
F +49-211-65041-527
hannelore.gantzer@degussa.com