Catalytica Pharmaceuticals Adds Clinical Trial Packaging Services and Expands Pilot Plant Scale-Up Capabilities; Reports Unchanged Outlook for Glaxo Wellcome Business.

MOUNTAIN VIEW, Calif.--(BW HealthWire)--Dec. 8, 1999--

Catalytica Pharmaceuticals, Inc., a subsidiary of Catalytica, Inc. (Nasdaq:CTAL) announced today that it is expanding its service capabilities to include clinical trial material packaging and labeling for its customers. In addition, it has completed plans to expand its chemical pilot plant scale-up facilities to accommodate growing customer demand for its services.

Catalytica currently manufactures clinical trial products for several of its customers and now intends to package and label these products to increase the efficiency and speed with which customers can bring them to physicians and patients. The Company currently expects facility modifications and validation for the packaging business to be completed by April 2000.

The Company currently operates pilot plant scale-up facilities in both Greenville, North Carolina and South Haven, Michigan. It plans to expand these capabilities through a capital investment of approximately $6 million for improvements at its Greenville facility, and increased reactor capacity as well as additional small "We continue to strengthen our abilities to partner with pharmaceutical and biotech companies to further serve their needs. By adding clinical trial packaging services and expanding our pilot plant scale-up capabilities, we address more completely and for more customers their needs in the early stages of the drug development process. We believe that our customers value the comprehensive capabilities that we can offer and we continue to draw new customers to our facility. Just this quarter, we have already signed four new contracts in the research and development side of our business. We have also received clinical trial sample orders from two customers that have worked with us for chemical process development of these two compounds. Most of these customers have agreed to also use Catalytica as a source to manufacture the products from these research and development efforts if successful development of the product leads to an approved drug."

Catalytica also stated that its current expectation for Glaxo Wellcome business remains unchangedA re-inspection of our Greenville chemical faci Inc., provides the pharmaceutical and biotech industries with comprehensive skills and demonstrated commercial experience in a broad spectrum of areas extending from process development through drug development, formulation, manufacturing and packaging. Since the acquisition of the Greenville Facility from Glaxo Wellcome in 1997, Catalytica has entered into over 45 new agreements for the development and manufacture of products for various pharmaceutical and biotech companies. In anticipation of additional business, it has expanded its chemical manufacturing facility and is currently expanding its sterile facility. It is the largest independent, fully integrated drug development and manufacturing supplinced Technologies, Inc. serves as the incubator for new catalytic technologies for industrial applications. Catalytica, Inc. employs over 1,600 people and had 1998 revenues of $406 million. Find Catalytica on the World Wide Web at http//www.catalytica-inc.com.

This news release contains forward-looking statements regarding Catalytica's outlook for Glaxo Wellcome business, its working relationship wustomers and from additional services, revenue expectations from Glaxo Wellcome, the ability to transition new customers and business into the Greenville facility, the ability to complete the facility modifications for clinical trial packaging, the planned construction of additional pilot plant scale-up capabilities, Catalytica's competitive position in its markets, and Catalytica's compliance with curreo perform cost effectively and in a timely manner, product development delays, changes in the company's competitive position, and the impact of FDA and other regulations on pharmaceutical and biotech manufacturing. Catalytica undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the incurrence of unanticipated events. Investors are encouraged to review Catalytica's Form 10K for the year ending December 31, 1998, Form 10Qs for the periods ending March 31, 1999, June 30, 1999, and September 30, 1999, and Form S4/A dated August 19, 1999, for a discussion of additional factors that could affect Catalytica's future performance.