First Horizon Acquires Rights to Furadantin.

Business Editors/Health & Medical Writers

Roswell, Ga.--(BUSINESS WIRE)--Jan. 7, 2002

First Horizon Pharmaceutical Corporation (Nasdaq:FHRX), a growing specialty pharmaceutical company, announced today that it has purchased the U.S. rights to the drug Furadantin(R) (Nitrofurantoin suspension) from Elan Pharmaceuticals, Inc. Furadantin(R) had U.S. sales of approximately $4 million in 2001. Furadantin(R) is the only available suspension form of Nitrofurantoin, which is approved for the treatment of urinary tract infections (UTI). According to IMS HEALTH NPA Plus (TM) data, pediatricians were the primary prescriber of Furadantin for the 12 months ending November 30, 2001.

Nitrofurantoin is a well-known anti-bacterial agent for specific urinary tract infections with no known bacterial resistance. In addition, it is not known to cause the allergic side effects that are well documented with Sulfa drugs or penicillin. Nitrofurantoin is specifically indicated for the treatment of urinary tract infections when due to susceptible strains of Escherichia coli, enterococci, Staphylococcus aureus, and certain susceptible strains of Klebsiella and Enterobacter species.

"Furadantin(R) is an ideal product for treating children with UTI and fits well with our pediatric franchise. The product is formulated in a suspension form and has a palatable banana-raspberry-mint flavor that children enjoy," said Mahendra G. Shah Ph.D., Chairman & CEO of First Horizon Pharmaceutical.

Under the agreements with Elan, First Horizon has acquired the assets relating to Furadantin(R), including the NDA and the trademark. Elan has also agreed to a transitional supply agreement whereby they will supply Furandantin(R) to First Horizon until May 2003. First Horizon is in the process of identifying a contract manufacturer that will supply the product for the long term.

"First Horizon's pediatric franchise now includes Furadantin(R) and the Tanafed(R) line products. Tanafed DM(TM), is a new line extension of Tanafed(R), containing a cough suppressant. The company has filed a patent application with the United States Patent and Trademark Office for its Tanafed DM(TM) product. Tanafed DM(TM) is expected to share a preferential position relative to Tanafed(R) with respect to detailing and marketing promotion. We plan to launch both products, Furadantin(R) and Tanafed DM(TM) in the first quarter of 2002," said Bala Venkataraman, EVP Corporate Development & CFO of First Horizon Pharmaceutical.

"We expect the Furadantin(R) acquisition to be accretive to our 2002 earnings. Our revised guidance for 2002 net sales is between $87 million and $89 million with fully diluted earnings per share between 56 cents and 57 cents," added Mr. Venkataraman.

"Our business outlook is very exciting to us at this time," continued Dr. Shah. "During 2002, we will focus our sales and promotion efforts on Furadantin(R), Tanafed DM(TM) and Prenate(TM) GT during their critical launch phase as well as continue promotion of our other growth drivers, mainly Nitrolingual(R), Robinul(R) line, and Ponstel(R). Through our alliances with our two co-promotion partners Otsuka and PDI we will seek to increase market share of our products, Nitrolingual(R) Pumpspray and PrenateTM GT. First Horizon will continue to seek to identify licensing opportunities or acquire promotionally sensitive brand-name prescription products that fit our four therapeutic franchises, namely cardiology, gynecology, gastroenterology, and pediatrics. We're also reviewing opportunities to acquire companies that have products that complement and strengthen our current product lines. Finally, we will continue to advance our clinical development projects."

Nitrofurantoin is not indicated for the treatment of pyelonephritis or perinephric abscesses. Acute, subacute, or chronic pulmonary reactions have been observed in patients treated with nitrofurantoin. If these reactions occur, Furadantin(R) should be discontinued and appropriate measures taken. Chronic pulmonary reactions occur rarely and generally in patients receiving therapy for six months or longer. Adverse events include, but are not limited to, nausea, headache, flatulence, emesis and anorexia. See package insert for additional product information.

First Horizon Pharmaceutical Corporation is a specialty pharmaceutical company that markets and sells 15 brand name prescription products to high prescribing primary care and select specialty physicians through its nationwide sales and marketing force. The Company focuses on the treatment of chronic conditions including, cardiovascular diseases, and pediatric, gastroenterological and gynecological conditions.

This press release contains statements, which constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include without limitation statements concerning (1) the effect of the Furadantin(R) acquisition on 2002 operating results, (2) scheduled time to launch Furadantin(R) and Tanafed DM(TM), (3) forecasted 2002 net sales and earnings, (4) forecasted increase in market share of Nitrolingual(R) Pumpspray and Prenate(TM) GT and (5) plans to continue product development projects in 2002. Such statements are subject to certain factors, risks and uncertainties that may cause actual results, events and performance to differ materially from those referred to in such statements. In evaluating all forward-looking statements, you should specifically consider various factors that may cause actual results to vary from those contained in the forward-looking statements. Such risks include the fact that (a) the Company may not be able to identify a manufacturer to supply Furadantin(R) after May 2003, (b) patent rights do not protect Furadantin(R), (c) the Company does not have experience marketing and selling prenatal vitamins, which may adversely impact the Company's launch of Prenate(TM) GT and the Company's ability to maintain sales of Prenate Advance, (d) patent rights do not protect the prenate products from competition and (e) the regulatory status of prenatal vitamins may make prenate products subject to increased competition. Such risks also include, without limitation, those identified in the Company's registration statement on Form S-1 filed with the Securities and Exchange Commission in the "Risk Factors" section under the following headings: "We currently depend on four key products for a large portion of our sales, and substantial declines in any of them would result in our being unprofitable", "There is no assurance of continued commercial acceptance of our products", "Our growth will suffer if we do not acquire rights to new products and integrate them successfully", "We may encounter problems in the manufacture of our products that could limit our ability to sell our products", "We face competition from generic products that could lower prices and unit sales", "Strong competition exist for our products and competitors have introduced new products and therapies that could make our products obsolete", "A small number of customers account for a large portion of our sales and the loss of any of them, or changes in their purchasing patterns, could result in our inability to successfully sell our product", "If our products under development fail in clinical studies or if we fail or encounter difficulties in obtaining regulatory approval for new products or new uses of existing products, we will have expended significant resources for no return", "Our acquisition of Cognex creates additional risks", "We or third parties may violate government regulations and we may incur significant expenses to comply with such regulations", "If third-party payors do not adequately reimburse patients for our products, doctors may not prescribe them", "Product liability claims and product recalls could limit our ability to sell products", "We expect to require additional funding, and if we cannot obtain it, our sales, profits, acquisitions and development projects could suffer", "If we do not secure or enforce our patents or other intellectual property rights, we could encounter increased competition that could adversely affect our operating results", "Our products could infringe the intellectual property rights of third parties, which could require us to pay license fees or defend litigation that could be expensive or prevent us from selling products", "The regulatory status of some of our products makes these products subject to increased competition and other risks", "We face risks under one of our development agreements because the other party to the agreement is a related party", and "Pohl-Boskamp can terminate our rights to Nitrolingual(R)". We do not undertake to update our forward-looking statements to reflect future events or circumstances.