Taro Pharmaceutical Industries Ltd. (Taro) has decided to discontinue manufacturing operations at the sterile manufacturing facility of its Irish subsidiary, Taro Pharmaceuticals Ireland, in Roscrea, Ireland ("Taro Ireland"). The discontinuance of manufacturing operations is scheduled to take place by the end of March 2010. Taro Ireland plans to continue to maintain the physical plant in good condition.

While the discontinuance of manufacturing operations will impact approximately 30 employees at the facility, Taro said it is no longer in the best interests of the company or its shareholders to continue to incur losses at the facility or make the significant capital investments that would be required to achieve the level of operating efficiency found at Taro's other manufacturing facilities. The discontinuance of operations, following both cash and non-cash one-time expenses associated with the decision, is expected to improve the company's earnings and cash flow almost immediately.

The company has communicated its decision to the Taro Ireland employees and has commenced consultations with the affected employees. Taro believes that it has sufficient inventories of sterile products to meet all existing commitments to its customers.