AMRI Announces Natural Products Research Collaboration with Eli Lilly and Company; Closes on Organichem Acquisition.

Business Editors & Health/Medical Writers

ALBANY, N.Y.--(BUSINESS WIRE)--Feb. 12, 2003

Albany Molecular Research, Inc. (Nasdaq: AMRI) has entered into a three-year natural products research collaboration focused on screening and lead identification with Eli Lilly and Company (Lilly).

The goal of the collaboration is to discover and develop potential therapeutic agents for diseases of interest to both companies. Lilly will transfer to AMRI its extensive and broad natural products collection, advanced technology natural product library, and related databases. This collection includes microorganisms, plant samples, and marine invertebrates and a library of over 100,000 samples that was designed to accelerate drug discovery. AMRI will take full ownership and possess exclusive worldwide rights to the collection and test drug libraries. AMRI will screen samples from the Lilly collection, as well as those from its own natural product libraries, for activity against disease targets identified and provided by Lilly.

Under the agreement, AMRI will bear the costs of building an expanded screening group and seek to discover drug lead candidates against several Lilly targets. AMRI would receive milestone and royalty payments on compounds that meet specific research and development benchmarks agreed to by both parties and also retain the right to further develop any compounds that Lilly chooses not to further develop. In addition, Lilly will have the option to contract with AMRI for further lead optimization, medicinal chemistry or scale-up of any active compounds.

"We are pleased to announce this new and unique collaboration with Eli Lilly and Company," said AMRI Chairman, President and Chief Executive Officer Thomas E. D'Ambra, Ph.D. "Over the last several years, AMRI has acquired and developed significant expertise and technologies for the discovery, optimization and development of novel chemical diversity to make drugs. This collaboration with Lilly enables us to further leverage these capabilities and technologies, in an effort to identify novel therapeutics and build significant value, including potential milestones and royalties."

Added Dr. D'Ambra, "It is our intention to fund these efforts within our existing R&D budget. Moreover, through this collaboration, AMRI is expanding and integrating its drug discovery and development technologies to include high-throughput biological screening. By integrating these technologies with our existing synthetic, biocatalysis, natural product lead-finding libraries, and our medicinal chemistry hit-to-lead optimization expertise, this additional capability further establishes AMRI's leadership position in the application of broad chemistry technologies to drug discovery and development."

Organichem Acquisition Closes

In an unrelated move, AMRI announced today that it has successfully completed the purchase of Organichem Corporation. The cash purchase price for the remaining 25.0% ownership was $29.9 million. AMRI financed the acquisition through a new $65.0 million credit facility which replaced the company's previous $25.0 million line of credit.

Albany Molecular Research, Inc. is a leading research, drug discovery and development company built on a chemistry platform of comprehensive and integrated technologies, resources and capabilities. The company conducts pharmaceutical research and development with many leading pharmaceutical and biotechnology companies and for its own internal discovery programs.

Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements may be identified by forward-looking words such as "may," "could," "should," "would," "will," "intend," "expect," "anticipate," "believe" and "continue" or similar words. Readers should not place undue reliance on our forward-looking statements. The company's actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the company may not be able to predict and may not be within the company's control. Factors that could cause such differences include, but are not limited to (a) the company's ability to attract and retain experienced scientists, (b) trends in pharmaceutical and biotechnology companies outsourcing chemical research and development, (c) the company's ability to take advantage of proprietary technology and expand the scientific tools available to it, (d) the company's ability to expand and integrate its drug discovery and development technologies, (e) the ability of the company and Lilly to identify potential new therapeutic compounds under the collaboration, (f) the company's ability to meet agreed upon research and development benchmarks and its ability to further develop certain compounds pursuant to its agreement with Lilly and (g) Lilly's continued pursuit of programs under which the company provides services as well as those factors discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission on April 1, 2002 and the company's other SEC filings. The company does not undertake any duty to and does not intend to update any forward-looking statements contained in this press release after the date of this press release.