FOR IMMEDIATE RELEASE

 

PALADIN ANNOUNCES RECORD FIRST QUARTER REVENUES

Quarter marked by a 73% increase in revenues and a 172% increase in net income

Montreal, Canada, May 9, 2002 - - Paladin Labs Inc. ("Paladin") (TSE: PLB) today announced its financial results for the first quarter ended March 31, 2002.

Highlights of the quarter include:

• Total revenues increased 73% for the first quarter to $6.0 million


• Net income increased 172% for the first quarter to $1.4 million
• Acquisition of a portfolio of products from Pharmacia Canada Inc.
• Closed a $21 million special warrant private placement

"Our record revenues underscore the merit of our strategy of acquiring innovative products or already commercialized products and increasing their value through a focused marketing program," said Jonathan Goodman, President and CEO of Paladin Labs.

Revenues for the quarter ended March 31, 2002 totaled $6.0 million, representing an increase of 73% from $3.5 million for the same time period in 2001. This growth was balanced between a steady climb in sales of existing products such as Androderm®, Plan Bä, Muse®, Tapazole®, and Propyl-Thyracil® as well as first time revenues from products acquired from Novartis Pharmaceuticals Canada Inc. and Pharmacia Canada Inc.

Net income for the quarter ended March 31, 2002 was $1.4 million compared to $0.5 million for the same period in 2001, an increase of 172%.

Product Acquisitions & In-Licensing

During the quarter, Paladin strengthened its portfolio and position in the Canadian endocrinology and women's health market by entering into an agreement with Pharmacia Canada Inc. (NYSE:PHA) to be the exclusive Canadian distributor of a portfolio of five marketed brands. These products include Dostinex®, Estring®, Dalacin® Vaginal Cream, Prepidil® and Prostin®. All products are currently being sold in Canada, with combined sales of approximately $5.0 million in 2001.

Product Developments

Also during the quarter, Paladin announced that, on behalf of Women's Capital Corporation, it submitted an application to Health Canada to change Plan Bä, an emergency contraceptive pill, from prescription-only to non-prescription status. Plan Bä is the first progestin-only pill indicated to prevent pregnancy after a contraceptive failure or unprotected sex.

The Therapeutic Products Directorate of Health Canada has accepted United Therapeutics Corporation's (Nasdaq: UTHR) New Drug Submission for Remodulin™ (treprostinil sodium) Injection and confirmed that it will receive Priority Review. Formerly referred to as UNIPROST™, Remodulin™ is indicated for the treatment of pulmonary arterial hypertension.

Private Placement

On March 21st, Paladin announced the closing of a $21 million special warrant private placement. Paladin received receipt for the final prospectus on May 3rd from the Securities Commission in the provinces of Quebec, Ontario and British Columbia.

2002 First Quarter Results - Conference Call Notice

The Company will host a conference call to discuss the first quarter 2002 results on Thursday, May 9 at 4:30 pm EST. The dial in number for the conference call is 1-800-478-9326 or 1-416-695-5801 and the reference number is 1159946.

The call will be audio-cast live and archived for 90 days at www.financialdisclosure.ca and www.paladinlabs.com.

About Paladin Labs Inc.
Paladin Labs, headquartered in Montreal, Quebec, is a rapidly growing pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian market. With this strategy, a focused national sales team and proven marketing expertise, Paladin has evolved into one of Canada's most profitable publicly-traded pharmaceutical companies. Paladin's shares trade on the Toronto Stock Exchange under the symbol PLB. For more information about Paladin, please visit the Paladin Web Site at www.paladinlabs.com.

This news release may contain forward-looking statements or predictions. These statements represent our judgement as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, those associated with product development, clinical trials, future revenues and profitability, and obtaining marketing approval.

For further information please contact:

Paladin Labs Inc.
Samira Sakhia, CFO
Tel: 514-340-5067
E-mail: info@paladin-labs.com
Web Site: www.paladinlabs.com

The Equicom Group Inc.
Joanna Longo, Investor Relations
Tel: 416-815-0700 ext.233
E-mail: jlongo@equicomgroup.com

Paladin Labs Inc. Balance Sheet As at March 31 [In thousands of Canadian dollars]

	March 31 2002 $	December 31 2001 $
	(unaudited)
ASSETS
Current
Cash and cash equivalents	11,581	1,978
Temporary investments	31,755	20,470
Accounts receivable	2,209	2,067
Inventories	50	50
Income tax credits receivable	512	487
Future income tax assets	2,275	2,275
Total current assets	48,382	27,327
Capital assets	14,203	12,530
Investments, at cost	2,771	2,771
Future income tax credits receivable	347	347
Future income tax assets	2,221	2,216
	67,924	45,191
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current
Accounts payable and accrued liabilities	5,678	3,924
Income taxes payable	142	181
Deferred credit	1,638	1,638
Total current liabilities	7,458	5,743
Balance of sale payable	557	544
Deferred credit	553	935
Future income tax credits liability	133	133
	8,701	7,355
Shareholders’ equity
Capital stock	37,245	37,154
Special warrants	19,895	--
Contributed surplus	87	87
Other paid-in capital	23	23
Retained earnings	1,973	572
Total shareholders’ equity	59,224	37,836
	67,924	45,191

 

Paladin Labs Inc. Statement of Income and retained earnings Three month period ended March 31 [In thousand of Canadian dollars except share and per share amounts] ¨

	2002		2001
		$		$
		(unaudited)		(unaudited)
Revenues		6,038		3,485
Cost of sales		1,609		1,291
Gross profit		4,429		2,194
Selling and administrative		2,060		1,195
Research and development		383		125
Amortization		427		154
Interest income, net		(77)		(294)
Income before income taxes		1,636		614
Provision for income taxes
Current		21		5
Future		214		94
		235		99
Net Income		1,401		515
Retained earnings (deficit), beginning of period		572		(913)
Retained earnings (deficit), end of period		1,973		(397)
Earnings per share
Basic		0.11		0.04
Diluted		0.11		0.04
Weighted average number of shares outstanding
Basic		12,549,760		12,394,038
Diluted		12,833,496		12,459,373

 

Paladin Labs Inc. Statement of Cash Flows Three month period ended March 31 [In thousands of Canadian dollars]

		2002 $		2001 $
		(unaudited)		(unaudited)
Operating activities
Net income		1,401		515
Add items not affecting cash
Amortization		427		154
Future income taxes		(387)		70
Imputed interest on balance of sale		13		12
		1,454		751
Net change in non-cash balances relating to operations		369		27
Cash flows from operating activities		1,823		778
Investing activities
Addition to patents, pharmaceutical product licenses, rights and intellectual property		(2,089)		(2,569)
Accounts payable related to the acquisition of intellectual property		1,179		--
Acquisition of capital assets		(11)		(7)
Net increase (decrease) in temporary investments		(11,285)		11,088
Cash flows from (used in) investing activities		(12,206)		8,512
Financing activities
Inssuance of common		91		--
Inssuance of special warrants		20,952		--
Share issue costs		(1,057)		--
Cash flows from financing activities		19,986		--
Net change in cash and cash equivalents during period		9,603		9,290
Cash and cash equivalents, beginning of period		1,978		2,858
Cash and cash equivalents, end of period		11,581		12,148
Cash and cash equivalents		11,581		12,148
Temporary investments		31,755		10,394
		11,581		12,148