Patheon Announces Agreement To Sell Niagara-Burlington Manufacturing Business

Patheon Inc. recently announced that it has entered into a definitive agreement to sell its Niagara-Burlington commercial manufacturing business to Pharmetics Inc. Based in Laval, Quebec, Pharmetics is a privately owned contract manufacturer of vitamins, herbal products, supplements and over-the-counter ("OTC") pharmaceutical products.

Under the agreement, Pharmetics will acquire the assets, including equipment, facilities and land, at Patheon's facilities in Fort Erie and Burlington (Gateway Drive) in Ontario. Pharmetics will provide employment to the entire active workforce of about 250 commercial manufacturing employees at the two sites and, subject to assignment of third-party contracts, will continue to manufacture and supply all of the products currently manufactured at these sites. Collectively, the two sites currently serve 14 clients, manufacturing and packaging on their behalf about 60 over-the-counter pharmaceutical products in a range of dosage forms, including tablets, liquids and powders.

"Once the decision was made to seek a buyer for our OTC business, we had three key priorities: continuity of service for our clients, continuity of employment for our staff, and the sale of the facilities to a purchaser who could capitalize on the strategic value of these assets," said Riccardo Trecroce of Patheon Inc. "We are very pleased that in this transaction with Pharmetics, all three of these objectives will be achieved."

"These sites will provide Pharmetics with conveniently located, high-quality capacity and expertise with which to expand our business and serve our growing client base," said Ephriam Kandelshein, Co-President, Pharmetics Inc.

The transaction is expected to be completed on or about January 31, 2008, subject to closing conditions, including regulatory approvals and the assignment of client and other contracts. The purchase price for the business is $5.75M plus working capital, subject to closing adjustments. PricewaterhouseCoopers Corporate Finance Inc. advised Patheon Inc on the transaction.

About Patheon
www.patheon.com is a leading global provider of drug development and manufacturing services to the international pharmaceutical industry. Patheon operates a network of 14 facilities in the United States, Canada and Europe, employing more than 5,100 people and serving a client base of more than 250 pharmaceutical and biotechnology companies.

About Pharmetics
Pharmetics is a major manufacturer of vitamins, supplements and OTC products. www.pharmetics.com

SOURCE: Patheon Inc.