Catalytica Pharmaceuticals Signs New Manufacturing Agreement With Warner-Lambert.

MOUNTAIN VIEW, Calif.--(BW HealthWire)--Feb. 16, 1999--Catalytica Pharmaceuticals, Inc., a subsidiary of Catalytica, Inc. (Nasdaq:CTAL), announced the signing of a contract with Warner-Lambert Consumer Healthcare, a division of Warner-Lambert Company (NYSE:WLA), to manufacture and package over-the-counter pharmaceutical products.

Since the acquisition of the Greenville, NC facility from Glaxo Wellcome in July 1997, Catalytica Pharmaceuticals has manufactured certain Warner-Lambert products which were produced at the Greenville, North Carolina facility prior to its acquisition by Catalytica. Under the new contract, Catalytica will continue producing a portion of the previously manufactured products, as well as manufacture and package selected new products for Warner-Lambert.

"We are pleased that Warner-Lambert, after a thorough review of the alternatives, has selected Catalytica to manufacture and package several of its OTC products," said Dr. Gabriel R. Cipau, President and Chief Executive Officer of Catalytica Pharmaceuticals. "We believe our ability to meet Warner-Lambert's expectation for quality of products and service led to the award of this supply agreement. And while we had counted on this business in our 1999 forecast and it does not represent a change over our previous revenue expectations for the year, the most important aspect of this contract for us is that it represents a strong endorsement from one of our largest customers of the quality and reliability standards we have demonstrated over the past 18 months."

Catalytica Pharmaceuticals, Inc., a subsidiary of Catalytica, Inc., provides process and formulation development and manufacturing for business partners in the pharmaceutical and biotech industries. Catalytica Pharmaceuticals purchased the Greenville, North Carolina facility from Glaxo Wellcome in July 1997, and entered into a five-year, $800 million supply agreement under which Catalytica Pharmaceuticals has continued to manufacture selected Glaxo Wellcome Products. Stipulations in the original agreement indicated that Glaxo Wellcome volumes would phase down after 1998. In June 1998, Catalytica Pharmaceuticals and Glaxo Wellcome expanded this agreement to provide for increased production of certain products.

In addition to established relationships with Pfizer and Glaxo Wellcome, Catalytica Pharmaceuticals services a growing number of pharmaceutical and biotech companies, among them Bristol-Meyers Squibb, Pharmacia & Upjohn, Merck, RPR, Warner Lambert, Amgen, Allergan, Astra, and numerous other small to mid-size biotech and pharmaceutical and health care companies.

Catalytica, Inc., builds business in high growth industries where the Company's technologies optimize manufacturing and solve environmental problems. Its three subsidiaries are Catalytica Pharmaceuticals, Inc., a leading full-service partner to the pharmaceutical industry; Catalytica Combustion Systems, Inc., a producer of modules that permit essentially pollution free combustion for the energy market; and Catalytica Advanced Technologies, Inc., an incubator for the creation of new catalytic technologies for industrial applications. Find Catalytica on the World Wide Web at www.catalytica-inc.com.

This news release contains forward-looking statements regarding Catalytica's future operations of the Greenville facility, Catalytica's performance under the contract, potential revenues received under the contract, and Catalytica's competitive position in its markets. Actual results may differ, and these differences may be material. These statements involve risks and uncertainties, including without limitation, the ability to operate the facility efficiently, the ability to perform cost-effectively and in a timely manner for Warner-Lambert, the ability to obtain contracts with new customers, product development delays, changes in the Company's competitive position, and the impact of the FDA and other regulations on chemical manufacturing. Investors are encouraged to review Catalytica's Form 10-K for the year ended December 31, 1997 and Form 10-Q for the period ended September 30, 1998, for a more complete discussion of risks factors that could affect Catalytica's future performance.