Axcan Pharma Inc has signed an agreement to acquire the rights to a group of gastrointestinal products from Aventis. Under the terms of this agreement, Axcan will acquire Carafate and Bentyl for the U.S. market and Sulcrate, Bentylol and Proctosedyl for the Canadian market for a cash purchase price of US $145 million. Axcan believes this acquisition will be immediately accretive, expecting to generate in excess of US 20 cents in earnings per share over the 12 months following closing from the sale of these products. The closing of this acquisition is subject to regulatory approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR").

During the last 12 months, Aventis' combined net sales of acquired products in these territories were approximately US $42 million. The US $145 million purchase price is approximately 3.5 times the net sales of these products for the trailing 12 months. The purchase price will be paid out of Axcan's cash on hand.

"We are pleased to announce this transaction. We have emphasized Axcan's commitment to acquire products generating North American revenue ever since we raised US $125 million through a convertible debenture offering. These gastrointestinal products are a perfect fit for Axcan. Assuming that we receive approval under HSR, we believe these products should allow Axcan to increase its net sales to over US $240 million during fiscal 2004," said Leon F. Gosselin, Axcan's President and Chief Executive Officer. "This acquisition should allow Axcan to fully leverage its North American sales force and the additional revenue we should generate will allow us to add approximately US $2 million to our research and development budget," he concluded.