Faulding reports breakeven result for its 1st quarter.

ELIZABETH, N.J.--(BUSINESS WIRE)--Nov. 4, 1996--

- Company has new Clonazepam approval and 14 submissions

pending FDA approval

Following its early 1996 restructuring and return to profitability in the quarter ended June 30, Faulding Inc. maintained a profitable course with a small gain in the first quarter of the current fiscal year, it was reported today by Richard F. Moldin, president and chief executive officer.

The company had net income of $34,000 on sales of $18.6 million, compared with a restated net loss of $2.8 million on sales of $15.6 million in the prior year's quarter ended September 30, and further compared with earnings of $666,000 on sales of $23.6 million during its fiscal fourth quarter ended June 30, 1996. After payment of preferred dividends, there was a loss of 4 cents per common share compared with a restated loss of 22 cents per common share in the prior year's quarter.

The Purepac oral generic drug line had net income of $1.0 million in the current quarter compared with a net loss of $1.1 million in the 1995 quarter. As anticipated, these gains were offset somewhat by costs associated with the start-up businesses acquired in February 1996, which have been included in the 1995 restated results.

Moldin stated that the decline in first quarter sales from the immediately preceding quarter resulted from a combination of factors, including expected fall-off from the prior quarter which saw the launch of new diclofenac sodium, diflunisal and indapamide products and the commencement of contract manufacture of the modified release morphine product Kadian(TM), and changes in buying practices by certain of the company's customers.

"New products introduced earlier in 1996 boosted our first-quarter sales above the 1995 first-quarter level - particularly our diclofenac sodium tablets for arthritis," said Moldin. "However, the rapid changes in the health-care industry are presenting special challenges to each new quarter."

Moldin said Faulding is addressing these challenges by seeking to increase its new product submissions to the Food and Drug Administration (FDA) and investing substantially in its new start-up injectable drug and medical device businesses.

On Nov. 1, 1996 the company announced that its wholly-owned subsidiary, Purepac Pharmaceutical Co., had received approval from the FDA to market clonazepam tablets, the generic equivalent of the anti-convulsant drug Klonopin(R), and that it expected to commence shipment of that product to customers early in calendar 1997. Commenting on that approval, Moldin stated that, "One of the positive aspects of this approval was the relatively fast approval time frame of less than 8 months since the filing of the submission with the FDA."

"Our new product submissions to the FDA now total 14 - a record level for the company and nearly triple the number of products in the FDA pipeline in mid-1995. We anticipate FDA approval of two more of these drugs in this calendar year. With both of these new products, we importantly could have the potential to participate in the formation of the generic market at patent expiration of the brand product," Moldin said.

"Furthermore," the CEO pointed out, "in the past 10 months Faulding has received FDA approval for and has commercialized a total of four new drugs - double the whole previous year's performance. To meet our customers' demands for a broader product line, we also have an expansion well underway at our injectable drug plant in Puerto Rico."

Faulding Inc. develops, manufactures and markets human pharmaceuticals and medical devices. Faulding Inc. is the former Purepac Inc., which changed its name following its recent expansion beyond oral dosage forms into injectable drugs and drug delivery devices. The shares of Faulding are traded on NASDAQ under the symbol "FAUL."

Note: Klonopin(R) is a registered trademark of Roche Laboratories.

             (Dollars in Millions Except Per Share Earnings)

                                             Three Months Ended
                                                  Sept. 30,
Condensed Summary of Operations (Unaudited)    1996       1995(a)

Net sales                                      $18.6      $15.6
Cost of sales                                   13.0       13.7
Gross profit                                     5.6        1.9
Expenses:
Selling, general and administrative              3.0        2.9
Research and development                         2.5        2.2
Total expenses                                   5.5        5.1
Income (loss) from operations                    0.1       (3.2)
Other income (expense), net                     (0.1)      (0.3)
Income (loss) before income taxes                 --       (3.5)
Provision (benefit) for income taxes              --       (0.7)
Net income (loss)                              0.034       (2.8)
Preferred stock dividends                        0.7        0.5
Net income (loss), available for common stock $ (0.7)    $ (3.3)
Net income (loss) per common share (b)        $(0.04)    $ (.22)
Weighted average number of common shares
 outstanding (thousands)                      15,065      15,019

(a) 1995 results restated to reflect businesses acquired Feb. 29, 1996.

(b) Net income (loss) per common share is computed by adjusting for
the company's preferred stock dividend.  Fully Diluted Earnings
Per Common Share are not presented as the effect would be
anti-dilutive.

Condensed Consolidated Balance Sheets            (Unaudited)  (Audited)
                                                 9/30/1996   6/30/1996
Assets:
Cash and cash equivalents                         $ 2.4        $ 1.9
Other current assets                               51.7         50.2
Property, plant and equipment, net                 42.3         41.5
Other assets                                        5.5          5.1
Total assets                                     $101.9      $  98.7

Liabilities and Stockholders' Equity:
Current liabilities                              $ 19.6      $  15.8
Long term liabilities                                --           --
Stockholders' equity                               82.3         82.9
Total liabilities and stockholders' equity      $ 101.9      $  98.7

CONTACT: Faulding Inc.

Lee Craker, 908/527-9100