Recordati: the Board of Directors approves the first half 2000 accounts

Milano, September 12th, 2000

Operating Income +111.3%. Acquisition of Bouchara
The Board of Directors of Recordati S.p.A. approved today the consolidated results of the Group for the first half 2000. Preliminary results, excluding the consolidated balance sheet, were released on July 26th and are hereby confirmed.

Highlights

• Consolidated net sales in the first half 2000 were up 15.2% rising from 263.2 billion lira to 303.2 billion lira. The increase is entirely due to organic growth across the product portfolio. Sales growth was particularly strong in pharmaceuticals with revenues climbing 20.0% from 181.0 billion lira to 217.0 billion lira while pharmaceutical chemicals sales increased by 4.8% to 86.2 billion lira. International sales continued their growth trend totalling 147.8 billion lira (+16.1%) and accounted for 48.7% of sales.
• Gross profit increased by 35.0 billion lira (or 25.0%) from 140.0 billion lira to 175.0 billion lira. Gross profit as percentage of sales improved from 53.2% to 57.7% thanks to the favourable sales mix in pharmaceuticals and to the positive currency effect in pharmaceutical chemicals.
• Operating income (12.0% of sales) increased from 17.2 billion lira to 36.4 billion lira (+ 111.3%), notwithstanding the important and continuous commitment to Research and Development, where expenses increased by 23.8 % (from 27.4 billion lira to 33.9 billion lira, or 11.2% of sales).
• Net income (7.8% of sales) grew from 10.6 billion lira to 23.6 billion lira (up 121.7%) partly due to the gain from the sale of the Vectorpharma business.
• The financial structure changed substantially following the acquisition of Bouchara; capital employed increased from 300.3 billion lira as of December 31, 1999 to 517.5 billion lira as of June 30, 2000 and net financial indebtedness increased from 86.9 billion lira to 285.5 billion lira.
• Shareholders' Equity of 232.0 billion lira finances 44.8% of capital employed.

In the first half of 2000 the French pharmaceutical group Bouchara (550 employees and 1999 revenues of FF 590 million) was acquired for a price of FF 726 million. Increased presence in France, the fourth pharmaceutical market in the world, will place the Recordati Group in a strong position to launch its innovative products directly through a sales force of around 230 reps.

The international development of lercanidipine (Zanidipâ) was actively pursued. Lercanidipine is now approved in 24 countries and marketed in 17 and regulatory activities aimed at registering the product in the USA, Canada and China, among others, are proceeding. A licensing agreement was signed with Pierre Fabre for the co-marketing of lercanidipine in France together with our French subsidiary. In Germany, Europe's leading market and the third world-wide, two important licensing agreements were signed with Berlin Chemie (Menarini group) and with UCB which will launch the drug under two different brands in the fourth quarter 2000.

Pharmaceuticals research activities achieved important advances in the field of urology. In the cardiovascular therapeutic area, clinical development of lercanidipine was extended to a new fixed association with another widely prescribed anti-hypertensive molecule. In pharmaceutical chemicals the first phase of pilot production of three important active ingredients for the international generics market was concluded.

In the third quarter of 2000 a collaboration agreement with Pharmacia Corporation to develop potential new urological drugs was concluded. The collaboration concerns a number of early-stage compounds discovered by Recordati and focuses on treatments for overactive bladder (OAB) and other conditions of the lower urogenital tract. Pharmacia will be responsible for worldwide development, registration and marketing of the compounds included in the collaboration agreement. Recordati will have responsibility for research and manufacturing of the pharmaceutical active ingredients and co-marketing rights in certain countries.

"In the first half of 2000 our Group achieved important structural improvements in profitability, growth and international expansion. " - said Giovanni Recordati, Chairman and C.E.O. - "In the future we expect to consolidate these improvements thanks to the success in Italy and abroad of Zanidipâ (lercanidipine), the development of all the key products in our portfolio, the continuos commitment to research and development, and the constant attention paid to costs and expenses. We expect to confirm the positive results obtained during the first half for the full year 2000."

Recordati is an international group engaged in the research, manufacturing and marketing of pharmaceuticals and pharmaceutical chemicals. Recordati's common and savings shares are listed on the Milano Stock Exchange since 1984 (ordinary shares Reuters RECI.MI, Bloomberg REC IM; savings shares RECIr.MI, RECNC IM).