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ACTELION LTD AND SUBSIDIARIES

CONSOLIDATED US GAAP FINANCIAL STATEMENTS FOR MARCH 31, 2004

Content:

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

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ACTELION LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

March 31,

(in CHF thousands, except per share amounts) 2004 2003

Net revenue:

Products sales 97,848 60,731

Contract revenue 3,205 2,009

Total net revenue 101,053 62,740

Operating expenses

Cost of sales 9,934 6,451Research and development 29,143 18,861

Marketing and advertising 19,943 17,340

Selling, general and administration 21,839 13,752

Amortization of acquired intangible assets 440 417

Total operating expense 81,299 56,821

Operating income 19,754 5,919

Interest income 161 280

Interest expense (197) (281)Amortization of debt discount and issuance costs (1,821) -

Other financial income, net 1,407 367

Income from continuing operations before income tax

expense and share in loss of affiliate 19,304 6,285

Income tax expense (1,237) (406)

Income from continuing operations before

share in loss of affiliate 18,067 5,879

Share in loss of affiliate - (203)

Income from continuing operations 18,067 5,676

Net gain from disposal of subsidiary /

(loss from discontinued operations, net of tax

and minority interest) 9,648 (1,550)

Net income 27,715 4,126

Basic income per shareContinuing Operations 0.83 0.26

Discontinued Operations 0.44 (0.07)

Net income 1.27 0.19

Number of shares (in thousands) used in computation 21,825 21,423

Diluted income per share

Continuing Operations 0.78 0.25

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ACTELION LTD AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

March 31, December 31,(in CHF thousands, except shares and per share amounts) 2004 2003

Assets

Current assets

Cash and cash equivalents 283,409 258,770

Derivative instruments 1,098 2,199

Trade and other receivables, net 76,215 66,711

Inventories 21,155 21,455

Other current assets 7,382 3,966

Current assets of discontinued operations - 10,385

Total current assets 389,259 363,486

Property, plant and equipment, net 20,289 18,982

Other assets 7,339 6,687

Intangible assets, net 8,656 8,813

Goodwill, net 3,785 3,784

Non-current assets of discontinued operations - 1,091

Total assets 429,328 402,843

Liabilities and Shareholders' Equity

Current liabilities

Trade and other payables 25,584 27,535

Accrued expenses 37,058 37,601

Deferred revenue, current portion 17,554 10,821

Financial debt 31,214 41,161

Other current liabilities 775 2,019

Contingent consideration 6,641 6,641

Current liabilities of discontinued operations - 8,758

Total current liabilities 118,826 134,536

Long-term financial debt, less current portion 146,841 145,147

Deferred revenue, less current portion 73,282 64,468

Other non-current liabilities 1,904 1,963

Non-current liabilities of discontinued operations - 1,785

Total liabilities 340,853 347,899

Minority interest - 517

Shareholders' Equity

Common shares (par value CHF 2.50 per share, authorized

30,506,640 and 30,506,640 shares; issued 21,941,647

and 21,751,148 shares in 2004 and 2003 respectively) 54,854 54,378

Additional paid-in capital 306,983 302,817

Accumulated deficit (269,511) (297,226)

Unearned compensation (4,329) (5,369)

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ACTELION LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

March 31,

(in CHF thousands) 2004 2003

Cash flow from operating activities

Net income 27,715 4,126

(Gain) / Loss from discontinued operations, net of minority interest (9,648) 1,550

Income from continuing operations 18,067 5,676

Adjustments to reconcile net income to net cash provided from operating

activities:

Depreciation and amortization 2,189 1,760Share in loss of affiliate - 203

Stock-based compensation 1,040 916

Realized loss on sale of marketable securities - 63

Loss on derivative instruments 1,075 652

Amortization of debt discount and expense 1,821 -

(Increase) in trade and other receivables (8,436) (12,720)

Decrease (increase) in inventories 300 (5,090)

(Increase) in other current assets (3,360) (1,461)

(Increase) in other assets (639) (250)

(Decrease) increase in trade and other payables (1,517) 4,129

(Decrease) increase in accrued expenses (905) 2,640

Increase (decrease) in deferred revenue 15,546 (1,580)(Decrease) increase in other liabilities (1,326) 32

Net cash flow provided by (used in) operating activities 23,855 (5,030)

Cash flow from investing activities

Purchase of property, plant and equipment (2,861) (1,783)

Purchase of derivative instruments (674) (1,192)

Proceeds from sale of derivative instruments 698 1,076

Purchase of intangible assets (252) (6,519)

Proceeds from sale of subsidiary 9,242 -

Net cash flow provided by (used in ) investing activities 6,153 (8,418)

Cash flows from financing activities

Payments on capital leases (60) (155)

Repayment of financial debt (10,000) -

Proceeds from exercise of stock options 4,642 627

Net cash flow provided by financing activities (5,418) 472

Net effect of exchange rates on cash and cash equivalents 49 (106)

Net effect of discontinued operations - (1,405)

Net change in cash and cash equivalents 24,639 (14,487)

Cash and cash equivalents at beginning of period 258,770 116,201

Cash and cash equivalents at end of period 283,409 101,714

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ACTELION LTD AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

Additional Other

(in CHF thousands) Common Shares Paid-in- Accumulated Unearned Treasury Comprehensive Shareholders'

Shares Amount Capital Deficit Compensation Shares Income Equity

At January 1, 2004 21,737,648 54,378 302,817 (297,226) (5,369) (1,018) 845 54,427

Comprehensive result including tax benefit:

Net income 27,715 27,715

Other comprehensive result:

Unrealized result on marketable securities -

Currency translation adjustment 651 651

Comprehensive income 28,366

Exercise of stock options 190,499 476 4,166 4,642Stock-based compensation 1,040 1,040

At March 31, 2004 21,928,147 54,854 306,983 (269,511) (4,329) (1,018) 1,496 88,475