Recordati: Strong growth in the first months 2005. Revenue +18.3%, operating income +31.9%, net income +28.5%.

Milan, 28 October 2005

• Consolidated revenue € 429.8 million, +18.3%, or +9.3% on a like-for-like basis.
• Pharmaceutical revenue +21.6% (on a like-for-like basis +11.7%), sales in Italy +1.2%, international sales +41.3%.
• Operating income € 82.7 million, +31.9%. Operating income before goodwill amortization +26.4%.
• Net income € 51.1 million, +28.5%
• Positive net financial position of € 21.2 million.
• Acquisition of Merckle's branded pharmaceutical business in Germany. The new subsidiary is called Merckle Recordati GmbH.
• Buy back of the sales and marketing rights of Zanidip® in the United Kingdom and start-up of the new subsidiary Recordati Pharmaceuticals Ltd.
• Start-up of the new subsidiary in Greece, Recordati Hellas Pharmaceuticals S.A.
• Three new product licenses obtained.
• Sales and marketing rights of lercanidipine in Japan regained.
• Full year 2005 expected results updated.

The Board of Directors of Recordati S.p.A. approved the Group's consolidated results for the first nine months 2005 which have been prepared in accordance with the IAS/IFRS requirements for interim reporting (IAS 34).

First nine months financial highlights

• Net consolidated revenue is € 429.8 million, an increase of 18.3% over the same period of the preceding year. On a like-for-like basis, that is excluding Merckle Recordati and Sophartex (sold in April 2004), revenues increased by 9.3%. Pharmaceutical sales are € 396.4 million, an increase of 21.6% over the first nine months of last year, 11.7% on a like-for-like basis. This result was driven by the good performance of international pharmaceutical sales (+41.3%) as well as that of lercanidipine sales (+21.4%). Sales in France grow by 20.1%, those in Spain by 48.3% and sales to licensees by 13.3%. Growth in Italy is lower (+1.2%) due to the public healthcare cost containment measures. Merckle Recordati, consolidated as from 1 January 2005, generates sales of € 40.0 million, in line with the preceding year. Pharmaceutical chemicals sales are € 33.4 million, a decline of 10.8%.
• Operating income, at 19.3% of sales, is € 82.7 million, an increase of 31.9%. As compared to the first half 2004 results restated in accordance with the IAS/IFRS in effect as from the 2005 accounts, and before goodwill amortization, first nine months 2005 operating income increased by 26.4%. The pharmaceutical business generates an operating income of € 83.8 million, an increase of 35.0% and the operating result of the pharmaceutical chemicals business in the first nine months is negative by € 1.1 million, with a particularly weak third quarter due to the slow-down of production in August.
• Net income at 11.9% of sales is € 51.1 million, an increase of 28.5% over the same period of the preceding year.
• The net financial position at 30 September 2005 is cash positive by € 21.2 million compared to € 72.1 million at 31 December 2004. The decrease is to be attributed to the Merckle acquisition and to the repurchase of our rights to lercanidipine in the United Kingdom. Shareholders' equity increased and is € 299.5 million.

Main operational events

• On 22 February the acquisition of Merckle GmbH's branded pharmaceutical business was successfully concluded for a total price of € 62.5 million. At closing € 45.0 million were paid and the remainder will be due over the next three years contingent upon certain favourable future developments in relation to some products. The product portfolio of the new German subsidiary Merckle Recordati, which has headquarters in Ulm, comprises prescription and OTC products mainly in the field of gastroenterology and rheumatology. The results of Merckle Recordati are consolidated as from 1 January 2005.
• In June an agreement was reached with the former licensee Napp Pharmaceuticals Ltd. to buy back the sales and marketing rights of Zanidip® (lercanidipine), Recordati's original antihypertensive calcium channel blocker, for a price close to £ 15 million which was paid in July. At the same time, a subsidiary was formed in the United Kingdom, Recordati Pharmaceuticals Ltd., to sell Zanidip® directly in this market. The new organization will be built up during the year in preparation for the launch of the 20mg strength in 2006.
• In September the newly established subsidiary in Greece, Recordati Hellas Pharmaceuticals S.A., began operations. In the past 5 years the Greek pharmaceutical market has grown at a rate which is almost double the European average.
• Recordati España acquired the rights to market and sell Yoduk® (potassium iodide) in Spain from the pharmaceutical company Stada. Yoduk® is indicated in situations of iodine deficiency and it was launched in March. Yoduk® is the first product in the Spanish market which contains potassium iodide as a single component. The Spanish Ministry of Health and various scientific societies, mainly those dedicated to obstetrics, neonatology, and endocrinology, are conducting awareness campaigns directed at health professionals and the public to promote the full understanding of iodine deficiency disorders.
• A license agreement was entered into with InfaCare Pharmaceuticals Corp. for the development and marketing in Europe and other Mediterranean countries, of stannsoporfin (Stanate®, tin-mesoporphyrin), a compound discovered at Rockefeller University and currently under development by InfaCare for the treatment of neonatal hyperbilirubinemia (jaundice). Treatment with stannsoporfin could find application in infants not responding to phototherapy thus avoiding the need for exchange transfusion, a complex and risky procedure. The drug is currently in clinical development in the U.S.A. and to date more than 800 infants worldwide have been successfully treated. Under this agreement Recordati will complete the clinical development of stannsoporfin, and, following approval, will have exclusive marketing rights for the whole of Europe (45 countries) and for 19 Middle East and North African countries.
• In July a multi-territorial license agreement was signed with Lavipharm Laboratories Inc. (U.S.A.) for the marketing and sale of a new transdermal patch containing the narcotic analgesic fentanyl, indicated for the treatment of moderate to severe chronic pain, in France, Germany, Italy, Spain and the United Kingdom. Lavipharm's fentanyl transdermal patch, designed to deliver fentanyl through the skin for up to three days, will help to respond to the increasing demand for more efficacious pain relief, which poses both medical and social problems.
• Recordati regained the sales and marketing rights of lercanidipine in Japan as a consequence of the termination of the license agreements with Tsumura and Dainippon following the change in business strategy and the corporate actions in which the two Japanese pharmaceutical companies have been respectively involved.
• The biochemical plant in Opera, which had ceased operations, was sold effective 1 April 2005. The price was substantially in line with its carrying value.

Management comments

"The third quarter 2005 was also a particularly positive one for our group" - declared Giovanni Recordati, Chairman and CEO. "Following our acquisition in Germany we also entered the British market and established a subsidiary in Greece. Our sales organizations now cover 80% of the European pharmaceutical market. Our financial results confirm the trend set by the preceding quarters" continued Giovanni Recordati. "Operating profits grew by nearly 30% due to the good performance of our international pharmaceutical business with a significant contribution from our new acquisitions. These results encourage us to keep to our European expansion strategy. For the full year 2005 we are now targeting operating profits of around € 110 million, even after a further increase in research and development expenditure."

Conference call

Recordati will be hosting a conference call today 28 October 2005 at 4:00 pm Italian time, 3:00 pm London time and 10:00 am New York time. Dial-in numbers are:

Italy +39 02 802 09 11
UK +44 208 7929 750
USA +1 866 2396 425
France +33 170 700 532
Germany +49 69 2222 2225

A set of slides which will be referred to during the call will be available on our website www.recordati.com under the Investor Relations & Press Room section, Company Presentations tab. Callers are invited to dial-in 10 minutes before conference time and ask for the Recordati conference call. If conference operator assistance is required during the connection please digit * followed by 0. A recording of the conference call will be placed on the website www.recordati.com.

Recordati, established in 1926, is a European pharmaceutical group, listed on the Italian Stock Exchange (Reuters RECI.MI, Bloomberg REC IM, ISIN IT 0003828271), dedicated to the research, development, manufacturing and marketing of pharmaceuticals and pharmaceutical chemicals, with headquarters in Milan, Italy and operations in France, Germany, Greece, Ireland, Italy, Spain, Switzerland, the United Kingdom and the United States.

As from 18 April 2005 each share outstanding was replaced by four new shares as resolved by the Extraordinary Shareholders' Meeting held on 6 April 2005.

Earnings per share (EPS) are based on average shares outstanding during each year, 197,693,492 in 2005 and 196,398,426 in 2004, net of average treasury stock which amounted to 4,798,664 shares for both years. EPS calculated on a fully diluted basis are € 0,249 in 2005 and € 0,196 in 2004. These calculations have been performed as if the 4:1 stock split had been performed on 1 January 2004.

* Restated following the introduction of the new IAS/IFRS

RECORDATI GROUP
Summary of consolidated results prepared in accordance with the International Accounting Standards and International Financial Reporting Standards (IAS/IFRS)
(thousands of €)

*Restated following the introduction of the new IAS/IFRS