DRAXIS Signs Five-Year Manufacturing and Supply Contract With Virco Pharmaceuticals.

Business Editors

MISSISSAUGA, Ontario--(BUSINESS WIRE)--Sept. 29, 2000

DRAXIS Health Inc. (TSE:DAX.)(NASDAQ:DRAX) announced today that its manufacturing subsidiary, DRAXIS Pharma Inc., has signed a five-year manufacturing and supply agreement with Virco Pharmaceuticals (Canada) Inc. for all formulations of Lanoxin(R) for the Canadian market.

Under the terms of the agreement DRAXIS Pharma will supply Lanoxin(R), used to treat heart failure and disturbances in heart rhythm, for the entire Canadian marketplace. Engineering and validation activities are expected to take place by the first quarter of 2001 with full production expected later in the year.

Dr. Martin Barkin, DRAXIS Health's President and Chief Executive Officer stated, "This new contract with Virco represents another step forward in the execution of our business plan at DRAXIS Pharma. With its broad capabilities, we believe that DRAXIS Pharma is well positioned to take advantage of the growing trend by pharmaceutical companies to outsource their manufacturing requirements."

Mr. Iain Speirs, President of Virco Pharmaceuticals stated, "We are pleased to announce this business arrangement with DRAXIS Pharma. The Kirkland facility, originally operated by Burroughs-Wellcome, has been manufacturing Lanoxin(R) for many years. Therefore, we are pleased that the proven heritage and continuing high level of manufacturing quality surrounding Lanoxin(R) will continue into the future."

Virco Pharmaceuticals (Canada) Inc. is a new company based in Toronto. Its mission is to revitalise high quality, established prescription medications that continue to fill unique medical needs and that are more economical than newer therapeutic alternatives. Lanoxin(R) is the first product to be distributed by Virco.

DRAXIS Pharma's cGMP compliant 242,000 square-foot facility was acquired by DRAXIS in 1998 and recently completed a $14 million capital improvement program to add a lyophilization line. The facility, formerly the Burroughs-Wellcome Canadian head office, is capable of manufacturing a wide range of dosage forms including ointments, creams, liquids, solid dose, and sterile products. The new sterile lyophilization capability is expected to come on stream in late 2000.

DRAXIS Health Inc. is a diversified specialty pharmaceutical company operating in three niche markets: Radiopharmaceuticals (DRAXIMAGE), Canadian sales and marketing (DRAXIS Pharmaceutica) and Companion Animal Health (through its global alliance with Pfizer Inc.). DRAXIS supports its own as well as third party manufacturing requirements through its subsidiary, DRAXIS Pharma, located in Kirkland, Quebec.

Except for historical information, this news release contains certain forward-looking statements that involve risk and uncertainties, which may cause actual results to differ materially from the statements made. Such factors include, but are not limited to, changing market conditions, clinical trial results, the establishment of new corporate alliances, the impact of competitive products and pricing, the timely development, regulatory approval and market acceptance of the Company's products, and other risks detailed from time-to-time in the Company's filings with the US Securities and Exchange Commission and Canadian securities authorities.