First Horizon Pharmaceutical Corporation Announces First Quarter Revenue of $12.45 M and EPS of 9 cents.

Business Editors

ROSWELL, Ga.--(BUSINESS WIRE)--May 8, 2001

First Horizon(NASDAQ:

FHRX)

Highlights include:

-- Net revenues increase of 75% over first quarter 2000

-- Sales of existing products increase of 55% over first quarter 2000

-- Operating margins of 14% versus 0% over the first quarter of 2000

-- Net income per share of 9 cents compared to (0) cents in first quarter 2000

First Horizon Pharmaceutical Corporation (NASDAQ: FHRX), a specialty pharmaceutical company, today announced results for the first quarter ended March 31, 2001.

Net revenues for the first quarter were $12.45 million, a 75% increase over the first quarter of 2000 revenues of $7.12 million. Sales of continuing products increased 55% over the first quarter of 2000. Operating margins for the first quarter of 2001 were 14% compared to 0% for first quarter 2000. Net income was $1.23 million for the first quarter of 2001, which equated to earnings per share of 9 cents, versus a net loss of $39,000 for first quarter 2000 which equated to $0.00 per share.

"We are pleased with our sales growth and results achieved in the first quarter of 2001," said Mahendra G. Shah, Ph.D., Chairman and CEO of First Horizon Pharmaceutical Corporation. "We continue to carry out our strategy of growing our current product line, and as a result revenues increased 75% over the first quarter of 2000 and we experienced organic sales growth of 55%. We maintain our marketing focus on our four key growth driver products, Tanafed(R), Nitrolingual(R) Pumpspray, Robinul(R) and Ponstel(R), as we seek out other product acquisition and licensing opportunities.

"The prescriptions of our key growth driver products, as measured by national retail prescription audits conducted by NDC Health Information Services (ARIZONA), Inc. and IMS Health, grew as a result of our sales and marketing efforts. According to IMS Health's National Prescription Audit Plus data, total prescriptions of our Robinul(R) and Tanafed(R) products have grown 60% and 82%, respectively, from first quarter 2000 to first quarter 2001. According to NDC Health Information Services (ARIZONA), Inc., combined prescriptions of Nitrolingual(R) Spray and Nitrolingual(R) Pumpspray written during first quarter 2001 increased 19% for new prescriptions and 10% for total prescriptions as compared to first quarter 2000. Also, according to NDC Health Information Services (ARIZONA), Inc., total prescriptions written for Ponstel(R) have increased 24% from first quarter 2000 to first quarter 2001."

"Our operating results for first quarter 2001 include expenses related to our launch of Ponstel(R) to gynecologists and expenses related to our National Sales Meeting held in Orlando this past March. We make this yearly investment in our national sales meeting to train and educate our sales force," said Balaji Venkataraman, Executive Vice President of Corporate Development and Chief Financial Officer. "We continue to focus on leveraging our existing infrastructure by increasing the productivity and efficiency of our sales and marketing force while evaluating product acquisitions and licensing opportunities that will best fit the therapeutic areas that we currently target."

"On the product development front, we completed a Phase I clinical trial for FHPC 01, our migraine product which was formulated by Penwest Pharmaceuticals. We remain in discussions with the FDA to clarify the FDA's expectations concerning studies and trials required for our two development projects, FHPC 01 and FHPC 02 for the treatment of symptoms associated with the excessive production of saliva primarily in children."

On March 13, 2001, the Company filed a registration statement with the Securities and Exchange Commission for the sale by the Company of 4,000,000 shares of its common stock. The underwriters have an option to purchase up to 600,000 additional shares of common stock from the Company to cover any over-allotments. The managing underwriters for this offering are JPMorgan, Banc of America Securities LLC, and Thomas Weisel Partners LLC. When available, a copy of the written prospectus relating to these securities may be obtained from JPMorgan, Prospectus Department, 60 Wall Street, 9th Floor, New York, NY 10260, phone [phone].

A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State.

First Horizon Pharmaceutical Corporation will host its first quarter conference call on May 8, 2001 at 5:30 P.M. eastern time. You are welcome to listen to the webcast of this call by visiting the Company's website at www.firsthorizonpharm.com and entering the Investor Relations page. If you wish to dial in to the conference call, the numbers are 888-722-1085 for domestic callers and 212-676-5095 for international callers. Due to the registration statement filed on March 13, 2001, the Company will not hold a question and answer session during this call, nor provide a replay.

First Horizon Pharmaceutical Corporation is a specialty pharmaceutical company that markets and sells 13 brand name prescription drugs 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 respiratory, gastroenterological and gynecological disorders.

This press release may contain statements which constitute forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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. These risks include, without limitation, those identified under the caption "Risk Factors" in the Company's registration statement on Form S-1 filed with the Securities and Exchange Commission.

               First Horizon Pharmaceutical Corporation
                            Balance Sheets

                                        March 31,         December 31,
                                          2001                2000
ASSETS
Current Assets:
  Cash and cash equivalents          $  16,157,749       $  14,228,067
  Accounts receivable, net               7,017,876           6,710,237
  Inventories                            2,160,865           2,648,104
  Samples and other prepaid expenses     1,530,659           1,341,126
  Taxes receivable                       1,752,914                   -
  Deferred tax assets                    1,322,010           1,203,309
                                        ----------          ----------
     Total current assets               29,942,073          26,130,843

Property and equipment, net                822,306             802,674
Other Assets:
  Intangibles, net                      25,942,480          23,150,025
                                        ----------          ----------
     Total other assets                 25,942,480          23,150,025

     Total assets                    $  56,706,859       $  50,083,542
                                        ==========          ==========


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable                   $   1,939,234       $   1,815,269
  Accrued expenses                      11,489,466           8,986,168
  Current portion of long-term debt              -             221,482
                                        ----------          ----------
     Total current liabilities          13,428,700          11,022,919

Long-Term Liabilities:
  Deferred tax liabilities                 487,721             487,721
                                        ----------          ----------
     Total liabilities                  13,916,421          11,510,640

Stockholders' Equity:
  Preferred stock                                -                   -
  Common stock                              13,316              12,973
  Additional paid in capital            40,699,932          37,792,147
  Deferred compensation                   (760,582)           (842,566)
  Retained Earnings                      2,837,772           1,610,348
                                        ----------          ----------
     Total stockholder's equity         42,790,438          38,572,902

     Total liabilities and
        stockholders' equity         $  56,706,859       $  50,083,542
                                        ==========          ==========


               First Horizon Pharmaceutical Corporation
                       Statements of Operations

                                       For The             For The
                                     Quarter Ended       Quarter Ended
                                    March 31, 2001      March 31, 2000

Net revenues                         $ 12,452,606        $  7,119,638
Operating costs and expenses
  Cost of revenues                      1,770,864           1,061,737
  Selling, general and administrative
   expenses, excluding the non-cash
   compensation expense                 7,819,118           5,491,653
  Non-cash compensation expense            81,984              87,269
  Depreciation and amortization           395,839              95,472
  Research and development expense        617,838             375,292
                                        ----------          ----------
   Total operating costs and expenses  10,685,643           7,111,423
                                        ----------          ----------


Operating income                        1,766,963               8,215
                                        ----------          ----------
Other income (expense)
  Interest expense                         (1,961)            (91,227)
  Interest income                         241,460               5,591
  Other                                       796               9,822
                                        ----------          ----------
   Total other income (expense)           240,295             (75,814)
                                        ----------          ----------

Income (loss) before provision
 for income taxes                       2,007,258             (67,599)
Benefit (provision) for income taxes     (779,834)             29,068
                                        ----------          ----------

Net income (loss)                    $  1,227,424        $    (38,531)
                                        ==========          ==========

Net income (loss) per common share:
  Basic                              $       0.09        $      (0.00)
                                        ==========          ==========
  Diluted                            $       0.09        $      (0.00)
                                        ==========          ==========

Weighted average common shares outstanding:
  Basic                                 13,034,561          8,539,643
                                        ==========          ==========
  Diluted                               14,392,923          8,539,643
                                        ==========          ==========