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CARA (OTCBB) Caraco Pharma Signs New R&D Agreement for 25 New Drugs

TUESDAY , DECEMBER 03, 2002 08:00 AM

DETROIT, Dec 3, 2002 /PRNewswire-FirstCall via COMTEX/ -- Caraco Pharmaceutical Laboratories Ltd. (OTC Bulletin Board: CARA) signed an R&D agreement, which has been approved by its independent Directors, for development of up to 25 new generic drugs, with Sun Pharma Global Inc. (Sun Global), a wholly owned subsidiary of Sun Pharmaceutical Industries Ltd (Sun Pharma), Narendra N. Borkar, Chief Executive Officer, announced today.

Detroit based Caraco Pharmaceutical Laboratories Ltd. develops, manufactures and distributes generic prescription drugs to some of the nation's largest wholesalers, distributors, drugstore chains and healthcare systems. Sun Pharma (Reuters: Sun.BO), a major Caraco stockholder, is India's fifth largest pharmaceutical company. Sun Pharma operates eight manufacturing locations and two world class R&D Centers in India. A public company, Sun Pharma is ranked among India's top 50 companies by market cap and holds a leading rank among specialty customers such as psychiatrists, cardiologists, neurologists, etc. in the country.

The key purpose of the new agreement is to provide for direct transfer of R&D-based intellectual property in the form of drug technologies to Caraco, in order to quickly and efficiently expand Caraco's product line.

According to terms of the agreement, Sun Global will provide up to 25 new generic drugs to Caraco over a five-year period. In return, Sun Global will receive 544,000 shares of a newly created preferred Caraco stock for each new drug transferred. These preferred shares are convertible after three years, on one-to-one basis, to Rule 144 common shares.

Under a previous agreement with Sun Pharma, Caraco received technology for two DESI products and 11 ANDA products from Sun Pharma and has received FDA approval for seven of these generic drugs over the past five quarters. These are clozapine, a generic form of Novartis' Clozaril; metformin hydrochloride, a generic form of Bristol Myers Squibb's Glucophage; oxaprozin, a generic form of G.D. Searle's Daypro; carbamazepine (chewable), a generic form of Novartis' Tegretol; clonazepam, a generic form of Roche's Klonopin; tramadol hydrochloride, a generic form of R.W. Johnson Pharma Research Institute's Ultram; and ticlopidine hydrochloride, a generic form of Hoffman LaRoche's Ticlid.

Buoyed by the introduction of new products, Caraco reported record third- quarter sales and the Company's first ever net profit. It raised its sales guidance from $16-18 million to $21 million for calendar year 2002.

The Company has four drugs pending FDA approval and expects to receive the go-ahead to market one of these by year-end.

Mr. Borkar said, "This is a decidedly accretive step for our Company and shareholders. The new R&D agreement is expected to provide us with the resources and platform to expand our product line, grow sales, and improve our earnings picture."

This news release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of risk factors and uncertainties which could cause results to differ materially from those described in the forward-looking statements. These risk factors are contained in the Corporation's filings with the Securities and Exchange Commission, available free via EDGAR. The Company assumes no responsibility to update or clarify forward looking statements.



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SOURCE Caraco Pharmaceutical Laboratories, Ltd.


CONTACT: Narendra Borkar of Caraco Pharmaceutical Laboratories, Ltd.,
[phone]; or Mike Marcotte of Marcotte Financial Relations,
[phone], for Caraco Pharmaceutical Laboratories, Ltd.
(CARA)

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