DRAXIS Health Reports Fourth Quarter and Year E...(he product release cycle are exp...),Health

expected to improve operating performance on a quarter by quarter

basis.

Radiopharmaceuticals

- Product sales of $5.8 million in the fourth quarter increased 4%

compared to the fourth quarter of 2006 with the inclusion of freight

charges in product sales revenues, which began on April 1, 2007.

Excluding freight charges, product sales in the fourth quarter of

2007 decreased slightly compared to the same period in 2006. The

Company temporarily suspended production early in the third quarter

of 2007 of a private label radioactive product for one customer.

This product historically contributed $350,000 to quarterly

revenues. The customer will either permanently withdraw this product

from the market or make formulation changes and their decision is

expected in the first half of 2008. Revenues for all of 2007

increased 8% from $21.5 million in 2006 to $23.2 million in 2007,

driven by the inclusion of freight charges in revenues.

The radiopharmaceutical segment was also impacted by an industry

shortage of medical isotopes in December 2007 as a result of an

extended shutdown at a global supplier of these radioactive

isotopes.The Company has an alternative approved source of supply

for its raw materials and was able to fill all customer orders but

the shutdown affected the ability of radiopharmacies to carry out

procedures resulting in lower than anticipated demand.

- Product gross margins for the quarter ended December 31, 2007 were

49% compared to 61% for the fourth quarter of 2006, due to the

dilutive impact of including freight charges billed back to

customers in revenues and cost of goods sold beginning on April 1,

2007, coupled with foreign ex
'/>"/>