Catalytica Pharmaceuticals Announces New R&D Agreement With Pfizer to Develop Drug Formulations.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Feb. 19, 1998-- Catalytica Pharmaceuticals, Inc., a subsidiary of Catalytica, Inc. (NASDAQ:CTAL), announced today that it has signed a new collaborative agreement with Pfizer Inc. to begin research and development into new drug formulations.

Under the new agreement, Catalytica Pharmaceuticals will now provide expertise in development of innovative processes for the manufacture of tablets, capsules, injectable products, and other formulations for releasing medications internally. The new agreement with Pfizer extends the existing R&D relationship between the two companies, established in 1996, under which Catalytica Pharmaceuticals has focused on the development of new processes for synthesizing chemical compounds for the production of Pfizer drugs. The latest agreement will utilize the capabilities of the company's world-class pharmaceutical facility in Greenville, North Carolina.

According to James A. Cusumano, Chairman of Catalytica, Inc. and Chief Executive Officer of Catalytica Pharmaceuticals, the new technology agreement with Pfizer underscores the ability of Catalytica Pharmaceuticals to add value for customers throughout the entire drug development cycle. "This growing collaborative agreement with Pfizer demonstrates the confidence we both share in working together in diverse areas of drug process development, from basic chemistry through formulations research. We are extremely pleased to continue to build upon our long-standing relationship with Pfizer," Cusumano said.

Gabriel R. Cipau, President and Chief Operating Officer of Catalytica Pharmaceuticals, noted that the new agreement will help showcase the unique combination of research and technology expertise provided by Catalytica's Greenville development and manufacturing facilities. "The growing work with Pfizer is another important example of our company's strategy of being the pharmaceutical industry's one-source provider, from process development through commercial scale manufacturing," Cipau said. "We are pleased that this new research and development initiative will allow us to demonstrate the technology and development capabilities of our Greenville facility."

Catalytica Pharmaceuticals, Inc., a majority-owned subsidiary of Catalytica, Inc., provides process and formulation development and manufacturing for business partners in the pharmaceutical and biotech industry. In addition to Pfizer, Catalytica Pharmaceuticals provides manufacturing for other major pharmaceutical companies, including Glaxo Wellcome, Merck, and Pharmacia & Upjohn.

Catalytica, Inc., through its subsidiaries, provides catalytic technologies and advanced products that improve manufacturing processes and solve environmental problems economically. The three subsidiaries are Catalytica Pharmaceuticals, Inc., which is a full-service provider to the healthcare industry; Catalytica Combustion Systems, Inc., which produces XONON for the energy market; and Catalytica Advanced Technologies, Inc., which creates new catalytic technologies. Find Catalytica on the world wide web at www.catalytica-inc.com. -0-

This news release contains forward-looking statements regarding Catalytica's future operation of the research and development facilities and Catalytica's competitive position in its markets. These statements involve risks and uncertainty, including without limitation, the ability to operate the research and development facilities efficiently, the ability to 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. Investors are encouraged to review Catalytica's Form 10-K/A for the year ending December 31, 1996 (Part II, Item 7) and Form 10-Q for the period ending September 30, 1997, and the Proxy Statement dated July 16, 1997 for a more complete discussion of factors that could affect Catalytica's future performance.

CONTACT: Catalytica, Inc.

Lloyd Baylis, 650/960-3000