DRUG ROYALTY ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS.

TORONTO, ONTARIO--(BUSINESS WIRE)--Feb. 16, 1995--DRUG ROYALTY(TSE: DRI ) At its Annual Meeting today, Drug Royalty Corporation Inc. reported on its plans to double cash flow from operations in 1995 from growth in royalties from its two newest strategic partners and to add new royalty interests with significant potential in new therapeutic areas.

In 1994, royalty revenues increased to $1.25 million from $300,000 in 1993, and operating cash flow improved to $482,111 from negative $275,000 in the previous year. Drug Royalty's two newest strategic partners, Dura Pharmaceuticals, Inc. and Cambridge Antibody Technology Limited, will begin contributing royalties in fiscal 1995.

In addition to current revenue-producing products, Drug Royalty has interests in six developing pharmaceutical products which are expected to reach the approval stage over the next 4 years. The Company has acquired royalty interests in over 15 drugs in seven major therapeutic areas.

"To have growing cash flow and this kind of product potential after less than two years of operations is, I believe, a significant achievement", said Jim Webster, Drug Royalty's Vice President, Finance and Business Development. "With our well-defined strategic focus, our goal is to double cash flow in 1995, obtain several new strategic partners, and acquire new royalty interests with significant potential", he concluded. The Company completed a public offering of $16.8 million in 1994, of which $10.4 million remains available for investments in new interests.

Mr. Webster referred to the Company's policy of investing 50 percent of its funds in current royalties, with the other 50 percent invested in medium and longer-term royalty interests, as one of the key elements of its growth strategy. Pharmaceutical areas of interest include cancer therapeutics, new drug delivery systems. autoimmune disorders and generic drugs.

William C. Garriock, Drug Royalty's Chairman and CEO, commented on the Company's activities, indicating that over 200 royalty prospects had been examined over the past year, and over 25 of these had been explored in considerable depth. He pointed out that the Board of Directors is committed to quality deals having outstanding therapeutic potential based on sound science, a potentially large market, the right management to achieve commercial success, and an appropriate financial evaluation.

Drug Royalty Corporation Inc. is the first public Canadian company to provide shareholders with a means of participating in the global pharmaceutical industry by developing and acquiring royalty rights in emerging and existing drugs. Drug Royalty's common shares trade on The Toronto Stock Exchange under the symbol DRI.

CONTACT: Jim Webster, Vice President,

Finance and Business Development or

Evemarie Tulloch, Corporate Affairs and Investor Relations