Release issued 25th August 2000

Ethical Pharmaceuticals South America SA informs that it has fulfilled another step of the Technology Transfer Agreement signed with Cadila Healthcare Ltd., a company member of the Zydus - Cadila group (India).

The agreement signed by the companies last year will allow Cadila to manufacture, under Ethical matrix transdermal technology, a wide number of transdermal products such as those indicated in Hormone Replacement Therapy, Anti-inflammatory processes and smoke cessation.

The Technology Transfer Agreement also contemplates the advice from Ethical's side on the provision of the necessary manufacturing equipment and facilities layout.

The evaluation of the Agreement situation and the definition on the forthcoming actions were discussed by Ethical Senior Management and Mr. Pankaj Patel, Cadila Healthcare Ltd. CEO, during his visit to Ethical premises in Buenos Aires, Argentina.

Now, Cadila Senior Management will hold several meetings in Argentina where technical aspects of the manufacturing processes will be defined.

The beginning of the transdermal production in Cadila premises located close to Ahmedabad, India, is expected by the second quarter 2001.

Mr. Sergio Lucero, Ethical's Managing Director mentioned that other agreements like the Cadila ones are currently under discussion.

Ethical South America (www.ethicalsouthamerica.com) is an Argentinean company engaged in the development and licensing of transdermal and gel products under its proprietary technology.

As a multifaceted and multi-product group, Cadila caters to a wide spectrum of healthcare needs ranging from preventive to diagnostics, drug manufacturing and drug administration (www.cadila-zydus.com).

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