DAHI/Draxis complete Anipryl Distribution Agreement; Veterinary Pharmaceutical shipments to Canada to start mid-February.

OVERLAND PARK, Kan.--(BUSINESS WIRE)--Jan. 10, 1996--Deprenyl Animal Health Inc. (NASDAQ BB:DAHI;TSE:DAH) has completed its agreement with Draxis Health Inc. (NASDAQ:DRAXF; TSE:DAX) to distribute DAHI's recently approved veterinary drug Anipryl(r) (l-selegiline) in Canada.

As part of the 10-year exclusive distribution agreement, originally announced last month, Draxis has paid an upfront fee of approximately US$469,000 for specified Canadian rights to Anipryl(r), as well as US$125,000 for reimbursement of expenses incurred to date to prepare marketing materials for the Canadian launch of Anipryl(r). The companies entered into a revenue-sharing formula for Canadian sales of Anipryl(r).

DAHI has completed a training program for Draxis' sales representatives and expects that the first shipments of Anipryl(r) will be delivered to Draxis' warehouses by mid-February.

Draxis will operate a sales force that will market Anipryl(r) to Canada's veterinary market, and has retained a marketing director whose sole responsibility will be for animal products. DAHI will manufacture Anipryl(r) and will operate a technical support center, staffed by veterinarians, to assure quality control and assist clinical veterinarians in Canada.

"We are pleased to take this important step in moving DAHI from a pure research company to a veterinary pharmaceutical manufacturing and marketing company," said David R. Stevens, president and chief executive officer of DAHI. "The Canadian market acceptance of Anipryl(r) may serve as an indicator of the North American potential for this pharmaceutical."

DAHI is evaluating its options for distribution of Anipryl(r) in the U.S., including negotiating with several companies to establish a marketing alliance. Marketing rights in selected European markets have been acquired by Hoechst Veterinae, which is conducting clinical trials.

Anipryl(r) was approved for sale in Canada for canine Cushing's disease, which affects approximately 15,000 older dogs in the country each year. Anipryl improves the quality of life of older dogs, often delaying the decision by pet owners to put their companion animal to sleep.

DAHI recently submitted a New Animal Drug Application with the U.S. Food and Drug Administration to market Anipryl(r) in the U.S., where there are approximately 150,000 new cases of canine Cushing's disease annually.

DAHI is also conducting Phase III-equivalent trials to obtain approval to market Anipryl(r) for cognitive dysfunction. Approximately 150,000 older dogs in Canada, and 1.5 million older dogs in the U.S. are diagnosed with cognitive dysfunction each year.

As part of the distribution agreement, Draxis will convert approximately US$1.5 million of the US$3 million in loans outstanding into DAHI shares at CDN$2.11 per share or US$1.55. Draxis Health will also provide US$1 million of additional operating capital in the form of a loan convertible to DAHI common shares at the rate of CDN$2.11 per share or US$1.55. Except for the conversion rates, the new loan is subject to the same general terms and conditions as the existing loans. Based on the terms of the distribution agreement, DAHI anticipates that it will meet its operating capital needs for 1996.

As a result of the conversion, Draxis will own approximately 43 percent of the shares of DAHI, and its ownership could increase to approximately 52 percent of DAHI, on a non-diluted basis, through the conversion of all of the loans outstanding.

Draxis is a marketing and research company that operates Canadian neurological and dermatological pharmaceutical divisions, a U.S. consumer marketing company, and offers products exclusively through U.S. podiatrists.

Deprenyl Animal Health was established in 1990 to develop animal health applications for Anipryl(r). The company is also identifying other animal health product opportunities to become a multi-product animal health pharmaceutical company.

CONTACT: RKC Communications

Robert Kneeley, 954/351-1976