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May 9, 2001

Smith & Nephew acquires burn business and exclusive license to new wound care technology from Westaim Biomedical

Calgary, AB, Canada -- 

Smith & Nephew, the global advanced medical devices group, has acquired from Westaim Biomedical Corp an exclusive global license to its antimicrobial coating technology for wounds, together with its US and Canadian Acticoat® burns dressing business.

The Acticoat® product is a nanocrystalline silver-based dressing used for the treatment and prevention of infection in burns. The product has had strong growth since its introduction in 1998 and has developed a significant reputation within burn hospitals in North America. It has demonstrated a wide antimicrobial spectrum and is effective against many different pathogens. It achieved sales of US$5.4 million in 2000.

Westaim Biomedical will continue to manufacture current product for Smith & Nephew and will receive royalty payments. The two companies will also collaborate to develop the technology further, particularly for chronic wounds.

The initial cash consideration is US$16.5 million with up to a further US$55.5 million becoming payable on the achievement of certain regulatory and sales milestones ranged up to annual product sales of US$100 million.

Chris O’Donnell, Chief Executive of Smith & Nephew said: “Acticoat has established an important position in the prevention and management of infection in burns. It will bring a number of strengths to our wound management business, including increased sales in existing and new growth markets, patented technology with a strong competitive position, and major benefits for patients.”

Kevin Jenkins, President and CEO of The Westaim Corporation said: “As the world leader in the rapidly growing advanced woundcare market, Smith & Nephew is the ideal partner to accelerate Acticoat’s worldwide penetration of the chronic and acute wound markets. We are confident that Smith & Nephew’s strong reputation and market presence combined with Westaim Biomedical’s patented nanocrystalline technology will prove to be a powerful partnership for success in the marketplace.”

About Westaim Biomedical Corp.
Westaim Biomedical Corp. is a biotechnology company with research and manufacturing expertise in the science of noble metal nanotechnology for sophisticated medical device and pharmaceutical applications. Its nanocrystalline silver technology, a patented method of applying a thin layer of antimicrobial silver to base materials, delivers pure silver ions. The company's nanocrystalline silver products have demonstrated in laboratory tests an unsurpassed antimicrobial spectrum and kill rate and are effective against 150 different pathogens, including drug-resistant forms of bacteria.

Westaim Biomedical's first commercial product, Acticoat® burn dressing, was launched in 1998 and is used in more than 100 major burn hospitals in North America. In addition, Westaim Biomedical has introduced dressings into the specialized chronic wound market that provide sustained antimicrobial protection for up to seven days.

About Smith & Nephew plc
Smith & Nephew plc is a global advanced medical device group with more than £825m (US$1.2 billion) in annual sales. It has four businesses: Orthopaedics, Endoscopy, Wound Management and Rehabilitation, and has a highly successful track record in developing manufacturing and marketing a wide variety of innovative and technologically advanced tissue repair products, primarily in the areas of bone, joints, skin and other soft tissue. Smith & Nephew employs some 9,000 people with operations in 35 countries. It is the world leader in advanced wound management, and has extensive wound care marketing and distribution capabilities with a global sales force of more than 500 representatives and sales in more than 90 countries. Smith & Nephew is traded on the London Stock Exchange (SN) and ADRs on the New York Stock Exchange (SNN).

About The Westaim Corporation
The Westaim Corporation is a technology accelerator that launches advanced technologies into the marketplace. In addition to its investment in Westaim Biomedical Corp., The Westaim Corporation’s technology investments include iFire Technology Inc., which has developed a low-cost flat panel display and Savvion, a leader in e-business management software. The company’s common shares are listed on Nasdaq under the symbol WEDX and on the Toronto Stock Exchange under the symbol WED.

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For more information contact:
Chris O’Donnell, Chief Executive
Smith & Nephew plc
Tel: +44 (0) 20 7401 7646

Jim Dick, President
Smith & Nephew Wound Management
Tel: +44 (0) 1482 225181

Tony Johnston, Senior Vice President
The Westaim Corporation
(403) 234-3103
info@westaim.com
www.westaim.com
www.westaimbiomedical.com

Westaim Legal Notice Regarding Forward-Looking Statements
This news release may contain forward-looking statements. These statements are based on current expectations that are subject to risks and uncertainties, and the Company can give no assurance that these expectations are correct. Various factors could cause actual results to differ materially from those projected in such statements, including financial considerations and those predicting the timing and market acceptance of future products. The Company disclaims any intention or obligations to revise forward-looking statements whether as a result of new information, future developments or otherwise. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement.
 

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