Halsey Drug Co., Inc. Announces Lease of Manufacturing Facility and Agreement to Manufacture

ROCKFORD, ILL. (March 18) BUSINESS WIRE -March 18, 1999--Halsey Drug Co., Inc. (AMEX:HDG) today announced that it had entered into an agreement to lease the pharmaceutical manufacturing facility located in Congers, New York currently owned and operated by Par Pharmaceuticals, Inc., a wholly owned subsidiary of Pharmaceutical Resources, Inc. The lease is for a term of three years, provides for an additional two year renewal and contains a purchase option enabling Halsey to purchase the facility and substantially all machinery and equipment at any time during the lease term for $5,000,000 (exclusive of rental and purchase option payments under the lease).

In a related move, Halsey also entered into an agreement to manufacture, for a minimum of twenty seven months, certain products in the Congers facility for Par Pharmaceuticals, Inc. Under this agreement, Halsey has agreed to perform certain contract manufacturing services and Par has agreed to make product purchases of a minimum of $1,150,000 during the initial eighteen month period of the agreement.

Both agreements are expected to become effective March 22, 1999. Commenting on the two agreements, Michael Reicher, President & CEO, stated that, "The acquisition of the Congers facility, complete with state of the art solid dosage manufacturing equipment, dramatically improves the Company's manufacturing capabilities. This gives the Company the ability to produce controlled release as well as immediate release products and allows for greatly enhanced product development and strategic business alliance opportunities. The Company will immediately begin the task of securing FDA approval to transfer certain products currently being manufactured in its Brooklyn facility to this new facility. Additionally, the revenue stream generated by the contract manufacturing agreement is expected to cover a significant portion of the costs of the Congers facility during the transition period."

The Company intends to continue to utilize its Brooklyn facility, which is leased through 2005, for distribution and the manufacture of certain products.

Halsey Drug Company, Inc. together with its subsidiaries, is a manufacturer of generic drugs in solid and liquid dosage forms sold to distributors, wholesalers, drug store chains, institutions, government agencies and other pharmaceutical manufacturers nationwide, as well as a manufacturer of active pharmaceutical ingredients.

The statements in this press release are forward looking and are made pursuant to the safe harbor provisions of the 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 C., Inc. are available at Halsey's web site at www.halseydrug.com.

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CONTACT: Halsey Drug Company, Inc., Rockford

          Peter A. Clemens 

Vice President and Chief Financial Officer

          815/399-2060 

KEYWORD: ILLINOIS
INDUSTRY KEYWORD: PHARMACEUTICAL MEDICINE Today's News On The Net -
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