Halsey Acquires Novel Thebaine Isolation Technology; Expected to Provide Competitive Advantage in Narcotic-Based Product Production.

Business Editors and Medical/Health Writers

ROCKFORD, Ill.--(BUSINESS WIRE)--Feb. 26, 2001

Halsey Drug Co., Inc.(OTCBB-HDGC) today announced that it has acquired an exclusive license for a novel and highly efficient technology for isolating thebaine from raw poppy. The primary derivative from thebaine is oxycodone, an active pharmaceutical ingredient (API) used in pain management products. Other products derived from thebaine include the narcotic antagonists naloxone and naltrexone. Subject to the receipt of approvals from the U.S. Drug Enforcement Administration (DEA) and the U.S. Food and Drug Administration (FDA), products using this novel technology could reach the marketplace by 2004.

The thebaine isolation technology, for which a provisional patent application has been filed, was developed by Robert C. Corcoran Ph.D. and was acquired from Dr. Corcoran and Bio-Fine Pharmaceuticals, Inc. Under terms of the definitive License Agreement, Halsey obtained an exclusive worldwide license to the technology for 20 years. In exchange for granting the exclusive license to Halsey, Dr. Corcoran and Bio-Fine will receive a royalty on net sales of active pharmaceutical ingredients which are isolated or synthesized using the technology. After 20 years, the agreement reverts to a fully-paid, non-exclusive license.

In August 2000, Halsey announced the acquisition from Bio-Fine of an exclusive license for a patented novel and highly efficient technology for manufacturing codeine-based raw materials.

"The pain management marketplace in the United States is currently valued at approximately $2.0 billion, and is growing at approximately 20 percent a year," said Michael K. Reicher, Halsey's Chairman and CEO. "We believe that a key to success in this marketplace is the acquisition of novel technologies that support efficient synthesis of the active ingredients in pain management products. This license agreement for thebaine, combined with the novel technology previously acquired for codeine-based products, should provide Halsey a considerable competitive advantage in the production of morphine, codeine, hydrocodone, oxycodone and hydromorphone. Just as important, we have the ability to internally source APIs for finished dosage forms of niche products where competition is limited due to barriers to entry."

Prior to commercializing this technology, the Company will be required to obtain appropriate licenses and approvals from the DEA. Assuming the receipt of such DEA licenses and approvals and that the Company's ongoing review of this technology evidences commercial viability, of which no assurance can be given at this time, the Company will seek to develop products incorporating the technology and prepare and submit the necessary filings to obtain product approvals from the FDA.

Halsey Drug Company, Inc., together with its subsidiaries, is an emerging pharmaceutical company specializing in innovative drug development.

The statements in this press release are forward looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward looking statements involve risk and uncertainties which may affect Halsey's business prospects, including economic, competitive, governmental, technological and other factors discussed in filings with the Securities and Exchange Commission.

This and past press releases for Halsey Drug Co., Inc. are available at Halsey's web site at www.halseydrug.com.