PANGEO PHARMA'S 2ND QTR EARNINGS BEFORE INCOME TAXES GROW 106%.

PanGeo Pharma, Inc. (TSX:PIL.TO), Montreal, reports 14th consecutive quarter of comparative net income margin growth

For the second quarter

-- Consolidated revenues for the quarter rise 56% to $18.8 million

-- Earnings before income taxes grow by 106% to $2.0 million

-- Earnings Per Share of $0.02

Year to date

-- Consolidated revenues rise 50% to $34.9 million

-- Earnings before income taxes grow by 110% to $3.5 million

-- Earnings Per Share of $0.04

PanGeo Pharma Inc. (TSX:PIL) has reported consolidated revenues of $18.8 million for the 3 months ended July 31, 2002, an increase of 56% over revenues of $12.1 million for the corresponding quarter of the previous year. Operating income (EBITDA) earnings before interest, income taxes, depreciation and amortization for the quarter increased to $3.1 million, compared to $1.6 million for the corresponding quarter of the pervious year. Earnings before income taxes for the quarter increased by 106% to $2.0 million compared to $972 thousand for the corresponding quarter of the previous year.

For the six months ended July 31, 2002 consolidated revenues increased to $34.9 million an increase of 50% compared to $23.2 million for the corresponding quarter of the previous year. Operating income (EBITDA) earnings before interest, income taxes, depreciation and amortization for the period increased to $5.4 million, compared to $2.9 million for the corresponding period of the pervious year. Earnings before income taxes for the period increased by 110% to $3.5 million compared to $1.6 million for the corresponding period of the previous year.

Sequentially, operating margin (EBITDA margin) increased in the second quarter to 16.5%, compared to 14.1% in the first quarter, and 13.6%.in the fourth quarter of the previous year. Basic and fully diluted earnings per share were, respectively, $0.02 and $0.02 for the 3 month period and $0.04 and $0.03 for the 6 month period, ended July 31, 2002. Net Income for the 3 month period was $1.5 million compared to $972 thousand in the corresponding period of the previous year, representing an increase of 54.3%. Net Income for the 6 month period was $2.5 million compared to $1.6 million in the corresponding period of the previous year, representing an increase of 56.3%.

"Growth in earnings margins continued for the 14th consecutive quarter, period over period, and is in line with management's expectations," stated Ahmad Doroudian, chairman and CEO of PanGeo Pharma. "PanGeo's second quarter results demonstrate the continued integration of our operations. Our growth in revenues is attributable to continued internal growth and business development as we continued to deliver on our business plan. These results are on target with our previously stated guidance for the year."

PanGeo Pharma, Inc., is a specialty pharmaceutical company with core competencies in pharmaceutical manufacturing. The company manufactures and supplies a range of specialty pharmaceutical products and services to international markets. PanGeo, a TSX/S&P 300 company, employs over 450 people working in eight affiliate companies internationally.

For more information, call 905/569-1446 ext. 224 or visit http://www.pangeopharma.com.