DRAXIS Signs Five-Year Manufacturing and Supply Contract with Warner-Lambert: New Business to be Immediately Accretive to Earnings.

Business Editors

MISSISSAUGA, ONTARIO--(BUSINESS WIRE)--March 21, 2000

(NASDAQ:DRAX) (TSE:DAX.) 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 Warner-Lambert Canada Inc. covering a wide range of OTC products for the Canadian market.

Under the terms of the agreement, DRAXIS Pharma will recognize approximately CDN$ 5 million in new revenues annually through the manufacture of OTC products including, Polysporin(R), Sudafed(R), Actifed(R) and Zincofax(R). The manufacturing for these products commenced late in the fourth quarter of 1999 and full production under this contract is expected to take place by the second quarter of 2000.

Dr. Martin Barkin, DRAXIS Health's President and Chief Executive Officer stated, "This new Warner-Lambert business will be immediately accretive to earnings and represents a strong step forward in the execution of our business plan at DRAXIS Pharma. We believe that DRAXIS Pharma is well positioned to take advantage of the growing trend by multi-national pharmaceutical companies to outsource their manufacturing requirements."

Dr. Barkin continued, "We are extremely pleased to be able to increase our business with Warner-Lambert. This new contract represents a significant vote of confidence from one of our key customers."

Warner-Lambert is a world leader in over-the-counter health care products. For the fiscal year ended 1998, Warner-Lambert had consolidated revenues in excess of US$ 10 billion and its products were available in 150 countries around the world.

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 was initially constructed in 1983 and served as the Burroughs-Wellcome North American head office. The plant is able to manufacture 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 the second half of 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.