Patheon Announces Performance Enhancement Program

Toronto, Canada - Patheon (TSX:PTI), a leading global provider of drug development and manufacturing services to the international pharmaceutical industry, today announced a performance enhancement program and its results for the second quarter ended April 30, 2006. (All amounts are in U.S. dollars unless otherwise indicated.)

Performance Enhancement Program

"Our Board of Directors and management team are confident that Patheon has established its position as a market leader in the pharmaceutical outsourcing industry," said Mr. Peter Green, Chairman of Patheon Inc. "However, we are dissatisfied with the Company's financial performance. It is clear that now is the time to unlock the inherent economic value of the Company through an immediate and aggressive plan to improve the profitability and cash generation capability of our business model."

The Office of the Chief Executive Officer has initiated a performance enhancement program, aimed at improving the productivity and cost effectiveness of Patheon's operations.

"We are committed to swift and decisive action, and look forward to reporting on our progress as we enter this new phase of Patheon's development," said Mr. Green.

CEO Succession

The Board's Succession Committee is actively engaged in the search for the new Chief Executive Officer and expects to complete the process during the fourth quarter.

"In the meantime," Mr. Green said, "the Office of the Chief Executive Officer is working closely with senior management to develop and implement the performance enhancement program, with the objective of improving Patheon's operational and financial strength, flexibility and profitability, both in the short and longer term."

SOURCE: Patheon