CIMA LABS Announces Plans For Second Manufacturing Facility And Expanded Product Development Center.

Business Editors & Health/Medical Writers

EDEN PRAIRIE, Minn.--(BUSINESS WIRE)--Aug. 23, 2001

CIMA LABS INC. (Nasdaq:CIMA) today announced that it has completed the purchase of a $5.2 million, 107,000-square-foot building in Brooklyn Park, MN, that will be used to house a second manufacturing facility and an expanded product development center, including laboratories. The Company had previously leased approximately one-third of this building for its product development center.

The Company will take full possession of the building early in the second quarter of 2002 and plans to start expanding its product development center later this year. The Company expects to have the new manufacturing facility completed and available for production by early 2004.

John M. Siebert, Ph.D., president and chief executive officer, commented: "By increasing our manufacturing capacity and providing CIMA's customers with back-up production capabilities, our second facility will enable us to satisfy projected customer demand and requirements. For these reasons, this project marks still another milestone in CIMA's corporate development."

Siebert added: "Purchasing the building that houses our product development center proved to be the most cost-effective way to increase our manufacturing and product development capacity. We believe total capital expenditures for this key project, including the building purchase, will range between $20 to $30 million over the next two years. We expect to utilize our substantial cash reserves and cash flow to finance this project. Considering that we ended this year's second quarter with cash and available-for-sale securities of nearly $170 million and that we are generating cash, our investment in expanded product development and manufacturing capacity will have a negligible impact on CIMA's strong financial condition."

During this year's second quarter, CIMA completed the installation and initiated validation of the second manufacturing line at its Eden Prairie facility, which more than doubled CIMA's manufacturing capacity.

About CIMA

CIMA develops and manufactures prescription and over-the-counter products for pharmaceutical companies based upon its proprietary, fast-dissolve drug delivery technologies, OraSolv(R) and DuraSolv(TM). CIMA formulates a pharmaceutical company's active drug ingredient into a new, orally disintegrating dosage form that dissolves quickly in the mouth without chewing or the need for water. Taste masking agents may be used with the Company's fast-dissolve technologies to prevent or minimize the unpleasant taste associated with many active drug ingredients. CIMA currently manufactures five pharmaceutical brands utilizing its OraSolv and DuraSolv technologies: three prescription and two over-the-counter.

This press release, including the information related to CIMA's expectations about the completion of its new manufacturing facility, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. A number of factors could cause actual results to differ materially from CIMA's assumptions and expectations. These factors include but are not limited to the ability to complete construction and equipment installation in a timely manner. Additional factors that may cause actual results to differ from CIMA's assumptions and expectations include those set forth under the heading "Factors That Could Affect Future Results" included in CIMA's most recent Annual Report on Form 10-K filed by CIMA with the Securities and Exchange Commission. All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements.