• Transformational Transaction Creating a Large Scale Vertically Integrated Platform
• Enlarged Geographic Footprint with Significant Exposure to European Regulated Markets
• Largest Acquisition by an Indian Pharmaceutical company
• Enhanced Prospects for Growth and Profitability
• Significant Synergy Potential
• Complimentary Skill Sets
• Enhanced Management Team
• Diversified Revenue Streams

Hyderabad (India) / Heverlee (Belgium), June 19, 2005

Matrix Laboratories Ltd (Mumbai Stock Exchange, 524794; National Stock Exchange, MATRIXLABS), announced today that their Board of Directors have approved to acquire a controlling stake in Docpharma NV (Eurolist of Euronext Brussels, DOCPH), from Chairman and founder, Mr. Leon Van Rompay, and other key shareholders (the "Reference Shareholders") for a price of EUR 34 per share.

Share Purchase Agreements (SPAs) covering 1,370,085 shares (approximately 22 % of shares outstanding) were signed today in Hyderabad, India. Matrix will pay EUR 34 for each share acquired, representing a premium of 19.3% on the one month average share price and a premium of 13.3% on the last trading price as of 17th June 2005. Closing of the SPAs is scheduled on or before 8th July 2005, subject to incorporation of a wholly-owned Belgian subsidiary company of Matrix which will acquire the shares under the SPAs. As of closing of the SPAs, Matrix will acquire control over Docpharma, by virtue of article 13.2 of the Articles of Association of Docpharma. Consequently, Matrix will launch a mandatory public takeover bid at the same price for the remaining shares held by the public shareholders of Docpharma in accordance with applicable Belgian take-over regulations. The value of the transaction, at the offer price of EUR 34 per share, amounts to EUR 214 million (USD 263 million). After accounting for Docpharma's net cash position and its own shares held by the Docpharma group, the enterprise value amounts to EUR 193.85 million (USD 238 million). This announcement has been released under section 1 of Article 7 of the Belgian Royal Decree of 8 November 1989 on public take-overs and change of control over companies.

The public shareholders will receive an all cash offer. However, in order to demonstrate their ongoing commitment to the combined Matrix-Docpharma business strategy, Leon Van Rompay and family have agreed to accept a deferred payment for 65% of their consideration amounting to USD 25.02 million. Out of the deferred payment, an amount of USD 5.77 million shall be paid at the expiry of 12 calendar months from the date of the closing of the transaction and the remaining amount of USD 19.25 million shall be paid after a period of three years. The deferred payment by Matrix shall accrue an annual interest of 2.5%. 35% of their consideration amounting to USD 13.47 million will be paid in cash at the time of closing of the transaction.

Matrix would retain Docpharma's brands and trade names in their markets. Matrix and Docpharma have agreed that Mr. Leon Van Rompay and Mr. Stijn Van Rompay will remain as CEO and COO of Docpharma, respectively.

Matrix will initially finance the transaction through a combination of cash on hand and bank borrowings. Matrix will consider, if required, raising funds in the capital markets to reduce the bank borrowings post-transaction.

This is the second significant strategic transaction announced by Matrix this month. On 1st June, the Board of Directors of Matrix and Strides Arcolab Ltd announced their intention in principle to merge. The two companies are currently in the process of carrying out due diligence. The commentary provided in this press release does not include the impact of the Strides transaction on the combined entity, which could be considered material

UBS Investment Bank acted as exclusive financial advisor to Matrix Laboratories. ABN AMRO Corporate Finance and Degroof Corporate Finance advised Docpharma.

Commenting on the transaction, Mr. N Prasad, Chairman & CEO of Matrix stated: "The acquisition of Docpharma accelerates our evolution as a growing force within the global generic pharmaceutical industry. This transaction allows us to gain direct access into the under-represented, high growth generic pharmaceutical markets of Belgium and southern Europe. We will continue our strategy of partnering with the generic companies world-wide, while continuing to develop our presence in Docpharma's target markets. Docpharma's strengths in product selection, branding, marketing and distribution are highly complementary to our traditional strengths in product development and manufacturing. Given the lack of any operating overlap between our companies and the strong commitment shown by Docpharma management to the combined entity, we expect a seamless and timely integration process. We look forward to partnering with Leon and Stijn as they become part of our core management team and help lead our efforts in Europe."

Mr. Leon Van Rompay, CEO and founder of Docpharma, commented: "This is a strategically important step in the development of Docpharma. The combination with Matrix will create a vertically integrated player providing Docpharma with significant economies of scale and improvements in terms of product sourcing, product development and production cost and speeds up our ability to bring products to market. This partnership will enable us to accelerate the growth of our combined businesses in Europe. The markets in which we operate continue to offer enormous potential and with the support of Matrix Laboratories, providing outstanding quality products produced according to FDA and European cGMP standards, we very much look forward to taking full advantage of these opportunities."

Mr. Stijn Van Rompay, COO of Docpharma added: "We are very excited about this combination as it provides us with a new platform to drive our business. We found the Matrix management team to be extremely open, focused and efficient and are looking forward to working with them closely to build a new leader in the European generic industry."

The transaction is subject to necessary approvals, required if any, from the concerned regulatory authorities.

Strategic rationale for the acquisition

Transformational Transaction Creating a Large Scale Vertically Integrated Platform

Upon completion, the acquisition of Docpharma by Matrix would represent the largest acquisition ever executed by an Indian pharmaceutical company.

The combined entity will integrate Matrix's considerable manufacturing capacity with Docpharma's strong marketing and distribution platform in key growing markets within southern Europe, making it one of a select few generic pharmaceutical companies in its key markets with the ability to compete on the basis of cost advantage as well as marketing differentiation.

The revenues and EBITDA of Matrix (Indian GAAP), Docpharma (Belgian GAAP) and the combined entity on a pro-forma basis are as follows:

Enlarged Geographic Footprint with Significant Exposure to European Regulated Markets

Post transaction, two-thirds of the combined entity's revenues will be generated in the regulated markets, with around half of total revenues being generated in Europe alone. This will make the combined entity a leader amongst the Indian pharmaceutical companies with significant European sales.

Enhanced Prospects for Growth and Profitability

The acquisition of Docpharma will be accretive to Matrix's earnings while significantly enhancing growth trends. Docpharma's revenues and EBITDA for the nine months ending 31st March 2005 have grown at 43% and 46% year-on-year, respectively, with potential for similar level of growth in future.

Docpharma's strong growth prospects are driven by its positioning in several underserved, growing markets:

• Docpharma generates a majority of its pharmaceutical sales from the Belgian market, where, according to IMS statistics, it was the second largest generic company in 2004 with a market share in number of prescriptions of 16.8%. Generic drugs account for less than 5% of the USD 4.4 billion Belgian pharmaceutical market. However, according to Datamonitor, the generic market is expected to grow at around 16.5% annually through 2008 as generic penetration is set to increase.

• Additionally, Docpharma also derives revenues from operations in the Netherlands and Italy, which represent a combined USD 2.9 billion generics market which is estimated to be growing at approximately 30% annually

• Docpharma has plans in place to enter the USD 2.5 billion French generics market which is estimated to be growing at 29% annually.

Significant Synergy Potential

Management of both companies believes that there is significant opportunity to drive both cost and revenue synergies as a result of this combination:

• Cost Synergies: In the long run, the opportunity to vertically integrate Docpharma's product portfolio will yield significant synergies for the combined entity. In the short term, Matrix believes that it can reduce costs through more efficient product sourcing within Matrix's existing network in India

• Revenue Synergies: Management believes that it can grow revenues even faster by (i) broadening Docpharma's product portfolio with new products; and (ii) leveraging Docpharma's relationships to supply Matrix APIs and finished formulations to pharmaceutical companies in European markets.

Docpharma and Matrix's operations are extremely complementary with very limited overlap in their respective businesses. Docpharma does not have any manufacturing operations that would require integration or rationalization within the new organization, while its marketing & distribution platform represents an entirely new avenue of revenue generation for Matrix.

Enhanced Management Team

It is important to note that Matrix and Docpharma management have committed to partner together to execute a long-term strategy to grow this business within the southern European market. Matrix has signed management contracts with Mr. Leon Van Rompay and Mr. Stijn Van Rompay, retaining them as the CEO and COO, respectively, of the combined entity's European business. The combined entity will have management depth and breadth across the value chain in product selection, research & development, API and finished dosage form manufacturing, product registration, marketing, sales and distribution.

Diversified Revenue Streams

The combined entity will have in excess of 100 pharmaceutical products and the product portfolio would double within the next few years. For fiscal year 2004-05, on a pro-forma combined basis, Matrix's reliance on its two key product categories, citalopram and anti-retrovirals, would have declined from half to less than a quarter of total sales.

Additionally, the combined entity will also generate approximately one-fifth of its revenues from Docpharma's hospital division, which is largely targeted at the Belgian hospital market. In addition to having attractive operating margins, this division serves as a strategic springboard for Docpharma to cross-sell generic injectible pharmaceutical products into the currently under-penetrated USD 1.0 billion hospital pharmacy segment in Belgium.

About Matrix

Matrix Laboratories Limited is a public limited company listed on the major stock exchanges in India and is engaged in the manufacture of Active Pharmaceutical Ingredients (APIs) and Solid Oral Dosage Forms. With about 2000 employees, including over 200 R&D scientists, Matrix conducts research and development, and manufacturing products at the company's cGMP facilities located near Hyderabad and Visakhapatnam, India. The company's Solid Oral Dosage Forms facility is located near Nashik, about 150 km from Mumbai. Matrix has a strong pipeline and supplies to the leading generics companies worldwide.

The company's focus on Quality, Safety, Environment and Occupational Health is pronounced and some of its plants are approved by regulatory agencies such as the FDA (US), EDQM (EU), TGA (Australia) and some of the largest multinational pharmaceutical companies.

About Docpharma

Docpharma was founded in 1999 by Leon Van Rompay with the vision of creating a leading generic company in the Benelux and those markets where generics were just being introduced.

Initially, the company focused on the Belgian market where Docpharma has quickly become the number 3 generics company in value terms behind Stada and Merck Generics and the number 2 generics company in number of prescriptions, with a current market share of 16.8% and a wide portfolio of over 50 molecules. In the past 3 years, the company has also executed key acquisitions in the Netherlands and Italy to obtain a base from which to launch its strong development pipeline.

Docpharma currently has over 80 products it plans to launch in the next 24 months in its key countries (Belgium, Luxemburg, France, Italy and Netherlands). This is expected to allow the company to continue its strong growth trend. The group covers the majority of products coming off patent in its markets.

In addition to a focus on prescription generics, Docpharma has also strategically positioned itself as a potential first mover in the Belgian hospital generics market. Hospital pharmacies account for approximately 25% of total pharmaceutical expenditures in Belgium, however, virtually none of these sales are for generic products. Docpharma's management believes that this will change when the government begins to encourage generic utilization as a means to reduce overall healthcare costs. Docpharma today is a leading supplier to hospitals in the Belgian market with annual supplies to hospitals exceeding USD 50 million. The company intends to leverage its current relationships to cross sell a basket of injectible generics into this potentially lucrative segment of the market.

Docpharma went public on to Euronext in June 2001. The company has 240 employees. The average pharmaceutical experience in the Company is 15 years.

Forward looking statements

This press result contains forward looking statements with respect to financial condition, results of operations and businesses of Matrix and Docpharma. By their nature, forward-looking statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from that expressed or implied by these forward-looking statements. These factors include, among other things, exchange rate fluctuations, the risk that research and development will not yield new products that achieve commercial success, the impact of competition, price controls and price reductions, the risk of loss or expiration of patents or trade marks, difficulties of obtaining and maintaining governmental approval for products, the risk of substantial product liability claims and exposure to environmental liability.