IMPAX Reports Second Quarter Financial Results

July 25, 2002

Highlights Include Record Quarterly Net Sales, Additional Strategic Agreements, ANDA Filings and Tentative Approvals

July 25, 2002 -- IMPAX Laboratories, Inc. (Nasdaq NM: IPXL) today reported financial results for the three months and six months ended June 30, 2002.

The net sales for the second quarter of 2002 were $5,145,000 compared with $1,136,000 in the prior year's second quarter and $3,432,000 in the first quarter of 2002. The increase in net sales by approximately 350% over the prior year was primarily due to the March 2002 introduction of a new product, Fludrocortisone Acetate Tablets, as well as other products introduced since July 2001, such as Terbutaline Sulfate Tablets.

The net loss for the 2002 second quarter was $5,938,000 or $(0.13) per share, compared with a net loss of $6,150,000 or $(0.15) per share in the prior year second quarter, including goodwill amortization expenses of approximately $876,000 or $(0.02) per share. Higher net sales in the 2002 second quarter partially offset the increase in research and development and in infrastructure costs related to the Company's manufacturing facility in Hayward, California.

For the six months ended June 30, 2002, the Company reported net sales of $8,577,000, compared with $2,908,000 in the comparable period the previous year. The net loss for the first half of 2002 was $11,359,000, or $(0.24) per share. This compares with a net loss of $11,488,000, or ($0.31) per share in the prior year's six months, including goodwill amortization expense of approximately $1,752,000 or $(0.05) per share.

Cash, cash equivalents and short-term investments were $28.4 million at June 30, 2002, compared with $35.5 million at December 31, 2001. During the quarter, IMPAX issued 463,135 shares of common stock to a subsidiary of Teva Pharmaceuticals Industries, Ltd., for net proceeds to the Company of $3.75 million. Under the terms of a strategic alliance announced in June 2001, TEVA has made significant investments in IMPAX totaling $15 million under a fixed schedule through June 2002. Through these investments, TEVA purchased a total of 1,462,083 shares, or approximately 3% of total shares of common stock outstanding. A Form S-3 Registration Statement registering these shares was filed with the Securities and Exchange Commission (SEC) on July 23, 2002.

"We are delighted with our growth in net sales, owing to an increasing portfolio of marketed products, and look forward to continue bringing new generic drugs to market," said Barry R. Edwards, Co-Chief Executive Officer. "Second quarter highlights include the tentative approval by the U.S. Food and Drug Administration (FDA) of our ANDAs for generic versions of Claritin-D® 24-Hour (loratadine/pseudoephedrine sulfate, 10mg/240mg) Extended Release Tablets, and Claritin-D® 12-Hour (loratadine/pseudoephedrine sulfate, 5mg/120mg) Extended Release Tablets. Subsequent to the close of the quarter, we also received tentative approval from the FDA of our ANDA for a generic version of Rilutek® (Riluzole) 50mg tablets.

"In addition, we signed two significant agreements last quarter: one regarding the loratadine/pseudoephedrine sulfate products for the OTC market with Wyeth; and the second one, a Manufacturing and Supply Agreement with Schering relating to Claritin D® 12-Hour for the OTC market."

Larry Hsu, Ph.D., President and Chief Operating Officer, stated: "In the second quarter, we filed three new ANDAs for generic versions of undisclosed branded products, one of which was made under Paragraph IV of the Hatch-Waxman Amendments. We are, therefore, on track with our plans of filing a total of six to eight ANDAs this year."

While the Company submitted its first brand filing as an ANDA during the quarter, based on discussions with FDA regarding the file, IMPAX subsequently withdrew the application and is planning to resubmit it as an NDA. Additionally, good progress has been made in formulation development for three other brand products with IND filings scheduled during the next 12 months for at least two of the three products.

IMPAX currently has 17 ANDAs pending at the FDA that address more than $9 billion in 2001 U.S. branded product sales. Ten of these filings were made under Paragraph IV of the Hatch-Waxman Amendments, and four of these 17 ANDAs now have received tentative approval from the FDA.

IMPAX Laboratories, Inc. is a technology focused specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and niche generics in addition to the development of branded products. IMPAX markets its generic products through its Global Pharmaceuticals division and intends to market its branded products through the IMPAX Pharmaceuticals division. IMPAX Laboratories is headquartered in Hayward, California, and has a full range of capabilities in its Hayward and Philadelphia facilities. For more information, please visit the Company's Web site at:

                       IMPAX LABORATORIES, INC.
                       STATEMENTS OF OPERATIONS
        (dollars in thousands, except share and per share data)

                            Three Months Ended       Six Months Ended
                                  June 30,               June 30,
                              2002       2001        2002       2001

Net sales                    $5,145     $1,136      $8,577     $2,908

Cost of sales                 3,982      1,992       7,121      4,268

Gross margin (loss)           1,163       (856)      1,456     (1,360)

Research and development      4,476      2,415       7,366      5,010

Less: Teva reimbursements      (138)        --        (304)        --

Research and development,
 net                          4,338      2,415       7,062      5,010

Selling                         646        806       1,304      1,123

General and
 administrative(a)            1,939      2,236       4,109      4,395

Other operating income
 (expense), net                  21         39          (9)        64

Net loss from operations     (5,739)    (6,274)    (11,028)   (11,824)

Interest income                 167        161         402        423

Interest expense(b)            (366)       (37)       (733)       (87)

Net loss                    $(5,938)   $(6,150)   $(11,359)  $(11,488)

Net loss per share
 (basic and diluted)         $(0.13)    $(0.15)     $(0.24)    $(0.31)

Weighted average common
shares outstanding       47,306,741 41,138,673  47,061,223 37,565,128

(a) Includes amortization of goodwill of $876,000 in the quarter
    ended June 30, 2001 and $1,752,000 in the six months ended June
    30, 2001. There was no amortization of goodwill in 2002.

(b) The total interest expense of $366K for the quarter ended June
    30, 2002, which was reduced by $222K in capitalized interest,
    included interest of $438K on the refundable deposit from Teva.
    The total interest of $733K for the six months ended June 30,
    2002, which was reduced by $394K in capitalized interest, included
    interest of $876K on the refundable deposit from Teva.

                       IMPAX LABORATORIES, INC.
                        CONDENSED BALANCE SHEET
                            (in thousands)

                                             June 30,     December 31,
                                               2002            2001


Cash, cash equivalents and short-term
 investments                                  $28,400         $35,466

Accounts receivable, net                        4,561           3,523

Inventory                                       4,688           3,488

Property, plant and equipment, net             31,398          24,334

Goodwill and intangibles, net                  28,529          28,721

Other assets                                    2,025           2,080

                Total assets                  $99,601         $97,612


Current liabilities                            $9,579          $7,803

Long-term debt, net of current portion          6,752           6,868

Refundable deposit and related accrued
 interest                                      23,752          22,876

Other liabilities                               2,684             117

Mandatorily redeemable convertible
 preferred stock                                7,500           7,500

Stockholders' equity                           49,334          52,448

                Total liabilities and
                 stockholders' equity         $99,601         $97,612