Detroit based Caraco Pharmaceutical Laboratories, Ltd. posted appreciably higher sales and substantially lower net losses for the fourth quarter and year ended December 31, 2002, Narendra N. Borkar, chief executive officer, reported yesterday.

Q4-2002 sales rose 196 per cent to a record $7,552,116, from $2,549,745 for Q4 2001. The gross profit for the quarter increased 133 per cent to $2,953,516 from $1,267,876 in Q4 of 2001. Equally important, the net loss for the quarter was reduced 14 per cent to $535,671 or $(0.03) per fully diluted share from $625,608 or $(.03) per diluted share, for Q4 2001 despite incurring a non-cash Research & Development (R&D) expense of $1,096,704 in Q4-2002.

Q4-2002 results include a 66 per cent increase in R&D spending to $1,904,043, from $1,145,348 for Q4 2001. The $1,096,704 of total R&D expense reflects non-cash payment of 544,000 Caraco shares to Sun Pharmaceutical Industries Limited (Sun Pharma) for 1 ANDA product as stipulated in the Company's then existing R&D agreement with Sun Pharma. Sun Pharma is India's fifth largest pharmaceutical firm and owns approximately 49 per cent of Caraco.

Full-year results, which include the restatements for Q2 and Q3 of 2002, were the Company's best ever. Sales rose 278 per cent to a record $22,380,964, from $5,922,431 for 2001. Gross profit increased 495 per cent to $10,333,554, from $1,736,372 for 2001. The net loss for 2002 was reduced 61 per cent to $2,256,004, or $(0.10) per fully diluted share, from $5,757,463, or $(0.29) per fully diluted share during 2001. Total R&D expense for the year rose 135 per cent to $7,236,213, from $3,079,804, which includes a non-cash R&D expense of $3,887,424. The non-cash R&D expense of $3,887,424 represents non-cash payment of 1,632,000 Caraco shares to Sun Pharma for 3 ANDA products per the Company's then existing R&D agreement with Sun Pharma.

Borkar said,"2002 was the Company's best year. We posted record sales and our first-ever profitable quarter. We launched four new generic drugs, which expanded our product line to 13. We received seven FDA approvals for new generic drugs and filed applications with the FDA for three other generic drugs. We signed a new 5-year, 25-drug R&D agreement with Sun Pharma Global, which assures us of a steady stream of new generic drugs.

Sun Pharma Global is a wholly-owned subsidiary of Sun Pharma. We moved closer to renegotiating a restructuring of our mortgage loan with the Economic Development Corporation of the City of Detroit. We completed a $1.6 million plant renovation that added production capacity and improved efficiency. We also enhanced our capital position with the completion of a $1.7 million private placement and a $2.5 million extension to a credit facility."

"The Company is moving in the right direction and we believe we are positioned to perform better during 2003 through higher expected sales. We plan to launch three or four new generic drugs, bringing our formulary to 16 to 17 drugs by year-end. We also anticipate receiving four to six new generic-drugs from Sun Pharma Global under our new R&D agreement."

Caraco has received FDA approval for 10 generic drugs over the past six quarters. These are: digoxin, a generic form of Glaxo Wellcome's Lanoxin; clozapine, a generic form of Novartis' Clozaril; ticlopidine hydrochloride,a generic form of Hoffman LaRoche's Ticlid; meperidine hydrochloride, a generic form of Sanofi-Synthelabo's Demerol; metformin hydrochloride, a generic form of Bristol Myers Squibb's Glucophage; oxaprozin, a generic form of G.D. Searle's Daypro; carbamazepine (chewable), a generic form of Novartis' Tegretol; clonazepam, a generic form of Roche's Klonopin; flurbiprofen, a generic form of Pharmacia's Ansaid; and tramadol hydrochloride, a generic form of R.W. Johnson Pharma Research Institute's Ultram.