Barr Pharmaceuticals, Inc. and its subsidiaries have entered into a non- binding Letter of Intent to acquire the exclusive rights to Organon's Mircette (Desogestrel/Ethinyl Estradiol) oral contraceptive product and to settle the pending patent litigation with Organon and Savient concerning Barr Laboratories, Inc.'s generic version of Mircette, which the Company markets under the trade name Kariva.

The parties (Barr Pharmaceuticals, Inc., Organon USA Inc. and Organon (Ireland) Ltd. and Savient Pharmaceuticals, Inc.) also confirmed that they had requested, and the District Court has agreed, to stay any further proceedings to allow the parties to negotiate definitive settlement agreements. The agreements are subject to several conditions, including negotiation of definitive agreements.

Under the proposed transaction, which is subject to antitrust approval, Barr would pay Organon $142 million to purchase the New Drug Application for Mircette, indicated for the prevention of pregnancy in women who elect to use oral contraceptives as a method of contraception, and in settlement of the patent litigation and would pay Savient $13.75 million (which would yield Savient $10.75 million, net of pass-through royalties to Savient's licensor) in settlement of the patent litigation and as prepaid future royalties on sales of Mircette and Kariva. Barr anticipates taking a charge of $62.3 million, or approximately $0.37 earnings per diluted share, in its financial statement for the quarter and year ended June 30, 2005, related to the transaction. Upon completion of the transaction, Barr's Duramed Pharmaceuticals subsidiary intends to promote Mircette to female healthcare practitioners.

"This acquisition ensures that there will continue to be both a brand and generic version of Mircette in the marketplace, and removes the risk of a possible injunction against the continued sale of Kariva," said Bruce L. Downey, Barr's Chairman and CEO.

The patent litigation is currently before the US District Court for the District of New Jersey. In April 2002, following a summary judgment ruling by the Court that Barr's Kariva product did not infringe the patent at issue, Barr launched Kariva, a generic equivalent to Organon's Mircette oral contraceptive. In April 2003, the US Court of Appeals for the Federal Circuit reversed and remanded the case back to the US District Court for the District of New Jersey for additional fact finding. Following the acquisition of Duramed in October 2001, Barr commenced manufacturing and marketing the Kariva product, and was named as an additional defendant in the suit.