Drug Royalty's 1996 Royalty Revenue Increases 39 Percent.

TORONTO--(BUSINESS WIRE)--Feb. 13, 1997--Drug Royalty Corporation Inc. (TSE:DRI.) reported today at its 1996 annual general meeting of shareholders that royalty revenue increased by 39 percent in 1996 to $2.3 million from $1.6 million in the previous year. Net earnings were $9.1 million compared to a loss of $755,153 in 1995 which represented a 32% average return on equity.

Cash flow from operations reached $14.1 million compared to $2.6 million in 1995. 1996 results were boosted by an agreement between Drug Royalty and strategic partner Ethical Holdings plc. to sell back to Ethical the royalty interests and a portion of the Canadian license to products Drug Royalty previously acquired.

"We are very pleased with the Ethical sale and the impact it has had on our share price", said Jim Webster, Senior Vice-President, Drug Royalty. "It provides a sense of the underlying value of our royalty interests, and allows us to increase the size of our investment capital pool, a key objective that will enable us to pursue larger opportunities."

Chairman and CEO Ed Rygiel stated that Drug Royalty intends to invest as much as $20 million in 1997. New investments could account for as much as 70 percent of the $32 million in cash the Company has available for investment purposes. Mr. Rygiel said that the Company's responsibility is "to build shareholder value and see the stock price rise to reflect this value as it moves into its next phase of growth."

Adding that Drug Royalty is "now better positioned than ever to accomplish this," Mr. Rygiel introduced Ian Lennox, formerly President of Monsanto Canada, who takes over as President and CEO on March 17th. "In addition to seeking opportunities for new strategic partnerships over the coming year, the company expects to benefit from new clinical developments and license agreements that reflect the growing value of its royalty interests with its eight current partners," stated Rygiel. Searle Canada is Drug Royalty's newest royalty partner announced last month.

Drug Royalty's first quarter 1997 results showed positive cash flow from operations of $262 thousand and a small profit. Royalties from strategic partner Dura Pharmaceuticals Inc. were a major driver of first quarter revenues and are expected to be a major contributor to revenues over the balance of the year.

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

CONTACT: Drug Royalty Corporation Inc.

Jim Webster, 416/ 863-1865

416/ 863-5161 (FAX)

or

Drug Royalty Corporation Inc.

Harry Loveys, 416/ 863-1865

416/ 863-5161 (FAX)