Counsel Corporation Combines Its Faro and Sage Subsidiaries Into a Single Unit.

Business Editors

TORONTO AND BEDMINSTER, NEW JERSEY--(BUSINESS WIRE)--Jan. 17, 2000

(NASDAQ:CXSN) (TSE:CXS.)

-- Creation of the New FARO Pharmaceuticals "Will

Position the Combined Enterprise to Respond Faster to Market

Opportunities and Better Realize Its Growth and Earnings

Potential," Says Counsel Chairman/CEO Allan Silber --

In an action aimed at realizing faster and more fully the growth and profit potential of its two businesses in the emerging pharma industry, an industry with more than $29 billion in cumulative annual sales, Counsel Corporation, of Toronto, Ontario (TSE: CXS / Nasdaq: CXSN) ("Counsel" or the "Company") today announced the merger of its FARO Pharmaceutical and SAGE BioPharma subsidiaries into a single enterprise, which will be known as FARO Pharmaceuticals, Inc. The merger and name change are effective immediately.

Allan Silber, Chairman and CEO of Counsel Corporation, said: "FARO Pharmaceuticals and SAGE BioPharma are both businesses that we believe have significant potential in their respective segments of the pharmaceutical market. By bringing them together, we will enable both units to achieve better strategic balance between late-stage and early-stage drugs, and thereby help both FARO and SAGE achieve what we believe is their considerable growth potential. This combined new entity achieved an annualized net revenue run rate of approximately $58M in the 1999 fourth quarter, ahead of previous quarters' combined net revenue trend. With this stronger base, we are now in a position to begin a program to acquire new strategic assets that will complement FARO and SAGE's existing portfolios."

Morris Perlis, President of Counsel Corporation, who will also serve as interim Chief Executive OfficPharmaceuticals, said: "FARO and SAGE's improving performance and significant growth prospects have enabled us to attract some additional outstanding executives, including most recently Bill Carkhuff, formerly of Sandoz and Novartis, who has been named Senior Vice President, Field Sales; and Donald Mozes, formerly of V.I. Technologies, Sandoz, and Revlon Healthcare, as SVP, Marketing, New Business Development and Strategic Planning. I am confident that under the leadership of these experienced and accomplished executives and the other members of the existing management team, the new FARO Pharmaceuticals has a very exciting future."

Counsel acquired a majority interest in FARO Pharmaceuticals in 1998. Its principal product is IMURAN(r), an immunosuppressive agent approved to prevent transplant rejection and to treat moderate to severe rheumatoid arthritis. FARO is also developing IMURAN(r) in the area of inflammatory bowel disease, including Crohn's Disease, for which it has submitted an SNDA to the US Food and Drug Administration (FDA). FARO's portfolio also includes ZYLOPRIM(r), approved for gout and as an adjunctive treatment for patients undergoing certain types of chemotherapy; and TRANDATE(r), offered in two forms, tablet and injectable, for the treatment of hypertension. The injectable form, which was acquired in December 1999, is exceeding initial volume expectations.

SAGE, acquired by Counsel in June 1998, is strategically focused on the treatment of hormone-dependent disorders, with particular emphasis on reproductive medicine. SAGE currently markets a broad range of products used in the treatment of infertility, including medical devices, diagnostics and instrumentation. SAGE's product line was enhanced in March 1999 by the acquisition of Fertility Technologies, Inc., a wholly owned subsidiary of Zonagen, Inc.

SAGE has secured an exclusive licensing agreement with Institut Biochimique SA ("IBSA"), a Swiss company, for a proprietary line of fertility hormone drugs for use in the United States and Canada. This line includes follicle stimulating hormone (FSH), human menopausal gonadotropin (HMG), and human chorionic gonadotropin (HCG). These novel drugs have been approved and are currently being marketed by IBSA in several countries in Europe. SAGE has initiated two Phase III clinical trials for the IBSA products, with a third study being planned for later this year. SAGE is targeting for the North American introduction of the first of these drugs in the first half of 2001.

"These initiatives," continued Mr. Silber, "we believe will allow FARO Pharmaceuticals to more effectively realize the profit and growth potential of its underlying businesses, accelerate new business opportunities, and support Counsel's commitment to realizing value for its shareholders."

This release involves forward-looking statements with respect to business plans and expectations of Counsel Corporation. The accuracy of these statements involves a number of risks and uncertainties, including, but not limited to, changes in economic and market conditions, financing, changes in governmental regulations and laws as well as other risk factors detailed in Counsel's securities filings, to which recipients of this release are referred for additional information.