DRAXIS Health Reports Fourth Quarter and Year E...(ucts under the new contract with Johnson...),Health

be influenced by both the product transfer process and the receipt

of manufacturing site transfer approvals from appropriate regulatory

agencies.

- We do expect revenue growth associated with product transfer

activities for 2008 but, while such activities will generate

positive margins, the margin percentage is expected to be dilutive

to overall margins as we hire and train new personnel in

anticipation of the commercial phase of the contract.

- Several potential new business opportunities have been identified as

a result of increased marketing and outreach activities initiated

during 2007. However the rate of conversion of such opportunities to

new business contracts over the next several quarters has introduced

increased forecasting variability.

- The timing and extent of radiopharmaceutical product introductions

to European markets is highly dependent on receiving timely

regulatory approvals, although additional approvals are expected

during 2008, in several different countries. The Company is actively

working to establish one or more appropriate marketing and

distribution partnerships, which will influence the rate at which

product sales will grow in the EU markets.

- Revenue and earnings from the potential introduction of DRAXIMAGE(R)

Sestamibi will depend on several factors including regulatory

approvals, competitive activity, manufacturing execution, marketing

and distribution partnerships and market acceptance following

product launch. This is expected to be a significant product for the

Company and the variability around its introduction alone is

expected to impact the accuracy of future forecasts for 2008
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