First Horizon Pharmaceutical Corporation Announces Fourth Quarter and Year End 2001 Revenue of $25.35 million and $69.29 million, respectively.

Business Editors

ROSWELL, Ga.--(BUSINESS WIRE)--March 4, 2002

First Horizon Pharmaceutical Corporation (Nasdaq: FHRX)

EPS of 14 cents for Q4 and 41 cents for the year

Fourth Quarter 2001 Highlights include:

-- Acquired and launched Furadantin(R)

-- Launched Tanafed DM(TM)

-- Signed agreements to purchase Sular(R)and finance its acquisition

Year Ending 2001 Highlights include:

-- Acquired and launched Furadantin(R)

-- Launched Tanafed DM(TM)

-- Signed agreements to purchase Sular(R)and finance its acquisition

Recent Developments

-- Acquired and launched Furadantin(R)

-- Launched Tanafed DM(TM)

-- Signed agreements to purchase Sular(R)and finance its acquisition

First Horizon Pharmaceutical Corporation (Nasdaq: FHRX), a specialty pharmaceutical company, today announced results for the fourth quarter and year ended December 31, 2001. Net revenues for the fourth quarter were $25.35 million, versus $12.05 million for the fourth quarter of 2000.

Net income was $4.07 million for the fourth quarter of 2001, which equated to diluted earnings per share of 14 cents, compared with net income of $1.41 million and diluted earnings per share of 6 cents in the same quarter a year ago.

Net revenues for the year ended December 31, 2001, were $69.29 million compared to $36.65 million for the year ended December 31, 2000. Operating income was $15.70 million or 23% of net revenues for the year ended December 31, 2001 versus $4.12 million or 11% of net revenues for the year ended December 31, 2000.

Net income for the year ended December 31, 2001 was $10.72 million or 41 cents per diluted share compared to $2.51 million or 13 cents per diluted share for the year ended 2000.

"We are very pleased with our results for the fourth quarter and the year 2001," said Mahendra G. Shah, Ph.D., Chairman, President and CEO of First Horizon Pharmaceutical. "We had another exciting and eventful year filled with many accomplishments, including a successful follow-on offering, a 3-for-2 stock split, the acquisition of the Prenate line and co-promotion agreements for two of our products, Nitrolingual(R) Pumpspray and Prenate GT(TM). Our sales of continuing products remain strong and we remain focused on growing our four therapeutic franchises in cardiology, obstetrics and gynecology, pediatrics and gastroenterology."

"As a result of our sales and marketing efforts, prescriptions of our key growth drivers increased, as measured by national retail prescription audits," said Bala Venkataraman, Executive Vice President, Chief Operating Officer and Chief Financial Officer. "According to IMS Health's National Prescription Audit Plus(TM) data, total prescriptions of our Robinul(R) and Robinul Forte, Ponstel(R) and Tanafed(R) products increased 52%, 47% and 42% respectively, from 2000 to 2001. Our operating results for the fourth quarter and year ending December 31, 2001 include Prenate Advance(R) and Prenate GT(TM) from August 20, 2001, and do not include any sales of Furadantin(R) which we acquired in late December 2001. Gross margin for the year ending December 31, 2001 was 85%."

Selling, general and administrative expenses increased 81% and 60% to $13.5 million and $38.7 million for the fourth quarter and year ending December 2001, respectively, compared to the same periods in year ending 2000. "As a percentage of net sales, selling, general and administrative expenses were 56% in 2001 and 66% in 2000, representing our ability to leverage our selling, general and administrative expenses over a larger sales base. Our selling, general and administrative expenses increased in the fourth quarter due to one-time costs associated with the launch of Prenate, which included marketing, advertising, training and market research expenses and one-time expenses associated with the severance to a departing officer. In addition, we incurred lease abandonment costs associated with a move to a new facility in second quarter 2002. Commissions associated with the co-promotion agreements with PDI and Otsuka for Prenate GT(TM) and Nitrolingual(R) Pumpspray, respectively were also incurred in the fourth quarter," said Mr. Venkataraman.

Recent Developments

"In January 2002, we announced the acquisition of the U.S. rights to Furadantin(R), a urinary tract infection product primarily prescribed by pediatricians, from Elan Pharmaceuticals. Furadantin(R) is a product well-suited for treating children because of its liquid suspension form and fruit-flavored taste," stated Dr. Shah. "We believe that Furadantin(R) fits well within our pediatric franchise and that our sales representatives will be able to cross-promote Furadantin to the physicians to whom we promote Tanafed and Tanafed DM(TM). We launched this product in January 2002. Elan did not actively promote Furadantin(R) and we believe that, with targeted selling efforts, we will be able to increase sales. Furadantin(R) had net U.S. sales of approximately $4.4 million in 2001. The Company also launched Tanafed DM, a line extension to Tanafed containing a cough suppressant, in January."

On February 13, 2002, First Horizon announced that it entered into a definitive agreement to acquire certain U.S. rights relating to the antihypertensive prescription medication Sular(R) (nisoldipine) from AstraZeneca UK Limited. The Company has also announced that it had entered into a long-term manufacturing, supply and distribution agreement with Sular's current manufacturer Bayer AG. Sular(R) had net U.S. sales of $45.9 million in 2001. Total consideration for the acquisition will be approximately $185 million plus contingent payments up to $30 million based on the achievement of certain milestones related to increases in sales. In order to finance the acquisition, the Company intends to use a portion of its available cash and has received a commitment for a six-month $152 million senior secured credit facility, arranged by Deutsche Banc Alex. Brown Inc.

"We believe that Sular(R) will complement our cardiovascular franchise because the physicians who prescribe our Nitrolingual(R) Pumpspray comprise a large part of the target audience for Sular(R)," said Dr. Shah. "In addition, many patients who suffer from acute angina also suffer from hypertension. Based upon the results of clinical studies, we believe that Sular(R) offers advantages over other antihypertensives, including its proven efficacy and safety, its demonstrated ability to provide twenty-four hour blood pressure control and its relative value on a cost per day basis as compared to other branded antihypertensives in its class."

"We are very pleased with our accomplishments in 2001 and our most recent developments. We believe First Horizon currently has the right products, as well as the right people in place to take this Company to the next stage of growth," said Dr. Shah.

First Horizon Pharmaceutical Corporation will host their fourth quarter and year end 2001 conference call on March 4, 2002 at 5:30 p.m. eastern time. You are welcome to listen to the webcast of this call by visiting the Company's website, www.firsthorizonpharm.com and entering the Investor Relations page. If you wish to dial in to the conference call the numbers are 888-572-2018 for domestic callers and 706-679-5683 for international callers.

First Horizon Pharmaceutical Corporation is a specialty pharmaceutical company that focuses on the treatment of cardiovascular, obstetrical and gynecological, pediatric and gastroenterological conditions and disorders. The Company promotes its products through its nationwide sales and marketing force targeting high-prescribing physicians such as cardiologists, obstetricians and gynecologists, pediatricians, gastroenterologists and select primary care physicians.

Safe Harbor

This press release contains statements which constitute forward-looking statements made pursuant to the Private Securities Litigation Reform Act of 1995 including, without limitation, our belief that we will be able to increase sales of Furadantin(R). 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 such forward-looking statements. Such risks include, without limitation, those identified under "Risk Factors" in the Company's Registration Statement on Form S-1 most recently filed with the Securities and Exchange Commission.

               First Horizon Pharmaceutical Corporation
                      Consolidated Balance Sheets
                            (In thousands)

                                              December 31, December 31,
                                                  2001        2000
                                              -----------  -----------
ASSETS
Current Assets:
 Cash and cash equivalents                     $  53,458   $  14,228
 Accounts receivable, net                         12,244       6,710
 Inventories                                       4,363       2,648
 Samples and other prepaid expenses                1,243       1,341
 Income taxes receivable                           1,674           -
 Current deferred tax assets                         323       1,203
                                              -----------  -----------
   Total current assets                           73,305      26,130

Property and equipment, net                          710         803
Other Assets:
 Intangibles, net                                 92,849      23,150
 Deferred tax assets                               2,230           -
 Other                                             1,056           -
                                              -----------  -----------
   Total other assets                             96,135      23,150

   Total assets                                $ 170,150   $  50,083
                                              ===========  ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
 Accounts payable                              $   4,540   $   1,815
 Accrued expenses                                 22,102       8,987
 Current portion of long-term debt                     -         221
                                              -----------  -----------
   Total current liabilities                      26,642      11,023

Long-Term Liabilities:
 Deferred tax liabilities                              -         488
 Other long-term liabilities                         144           -
                                              -----------  -----------
   Total liabilities                              26,786      11,511

Stockholders' Equity:
  Preferred stock                                      -           -
  Common stock                                        28          13
  Additional paid-in capital                     131,560      37,792
  Deferred compensation                             (557)       (843)
  Retained Earnings                               12,333       1,610
                                              -----------  -----------
   Total stockholders' equity                    143,364      38,572

   Total liabilities and stockholders' equity  $ 170,150   $  50,083
                                              ===========  ===========

               First Horizon Pharmaceutical Corporation
                 Consolidated Statements of Operations
                 (in thousands, except per share data)

                           For The Three Months  For The Twelve Months
                                   Ended                Ended
                                December 31,         December 31,
                              2001       2000       2001       2000


Net Revenues               $  25,348  $  12,054  $  69,290  $  36,650
Operating costs and expenses
  Cost of revenues             4,047      1,813     10,354      5,436
  Selling, general and
   administrative expense     13,473      7,440     38,689     24,217
  Depreciation and
   amortization                1,000        350      2,724      1,091
  Research and development
   expense                       430        271      1,819      1,784
                           ---------- ---------- ---------- ----------
    Total operating costs
     and expenses             18,950      9,874     53,586     32,528
                           ---------- ---------- ---------- ----------
Operating income               6,398      2,180     15,704      4,122
                           ---------- ---------- ---------- ----------

Other income (expense)
  Interest expense                (2)        (8)        (4)      (324)
  Interest income                287        163      1,874        348
  Other                            1          -          4         21
                           ---------- ---------- ---------- ----------
    Total other income
     (expense)                   286        155      1,874         45
                           ---------- ---------- ---------- ----------

Income before provision for
 income taxes                  6,684      2,335     17,578      4,167
Provision for income taxes    (2,615)      (921)    (6,855)    (1,660)
                           ---------- ---------- ---------- ----------
Net income                 $   4,069  $   1,414  $  10,723  $   2,507
                           ========== ========== ========== ==========
Net income per common share:
  Basic                    $     .15  $    0.07  $    0.44  $    0.15
                           ========== ========== ========== ==========
  Diluted                  $     .14  $    0.06  $    0.41  $    0.13
                           ========== ========== ========== ==========

Weighted average common
 shares outstanding:
  Basic                       27,255     19,404     24,474     16,612
                           ========== ========== ========== ==========
  Diluted                     29,070     22,007     25,845     19,106
                           ========== ========== ========== ==========