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The Special Committee of Independent Directors of Patheon Inc. ("Patheon") recently announced that Patheon has commenced a legal action in the Ontario Superior Court of Justice against JLL Patheon Holdings LLC ("JLL") and its nominees to Patheon's Board, Ramsey A. Frank, Paul S. Levy and Thomas S. Taylor.

The legal action is in respect of the conduct of JLL and its nominees in connection with JLL's insider bid for the Restricted Voting Shares of Patheon as well as related matters. The Statement of Claim sets out Patheon's allegations against the JLL Board nominees and JLL and is requesting that the Court make findings of breach of fiduciary duties, oppression, conspiracy and breach of contract, the particulars of which are set out in the Statement of Claim. A copy of the Statement of Claim is available on Patheon's website: www.patheon.com.

Patheon is seeking remedies from the Court including orders:

• prohibiting JLL from voting the Restricted Voting Shares acquired under its bid unless and until authorized to do so by further court order;
• removing the JLL nominees from the Board and restricting JLL's ability to appoint replacements;
• terminating JLL's Board representation and special approval rights under its investor agreement with Patheon;
• prohibiting JLL from taking up any further Restricted Voting Shares under its bid; and
• for significant monetary damages.

"The Special Committee is taking this step to enforce Patheon's rights and to continue to defend the best interests of all Patheon shareholders in response to JLL's inadequate, opportunistic and coercive bid," said Paul Currie, Chairman of the Special Committee.

Dissident Requisition
The Special Committee also announced that, pursuant to the powers delegated to it by the Board, it has called a meeting of the shareholders of Patheon to be held on September 11, 2009 to deal with the matters set out in the previously announced requisition received from dissidents Joaquin Viso and Olga Lizardi (the "Requisition"). A formal Notice of Meeting and Management Information Circular containing relevant information that will allow shareholders to make a decision at the meeting will be mailed to shareholders several weeks before the meeting date.

The Board has given the Special Committee the mandate to respond to the Requisition to protect the interests of shareholders. The Special Committee considered a number of factors in setting the September 11 meeting date, including:

• the need to resolve current litigation, which may alter the composition of the Board and the shares that can be voted at the meeting, so that shareholders will have access to all information that could reasonably be expected to affect their vote;
• the importance of minimizing management distraction and not destabilizing the Board while JLL's hostile insider bid remains outstanding, or during the period following the bid when JLL might seek to complete a "subsequent acquisition transaction"; and
• the fact that the dissidents made their requisition less than a week after shareholders made clear their desire for a more independent Board at the April 29 annual shareholders meeting.

"We strongly believe that it is important for the independent directors who have acted to protect shareholder interests to continue to be able to do so," said Mr. Currie. "This is especially important given that JLL continues to pursue its bid and has stated its intention to pursue a related subsequent acquisition or ‘squeeze-out ‘ transaction."

As noted above, among the remedies being sought in the litigation commenced against JLL is an order that would have the effect of prohibiting JLL from voting the Restricted Voting Shares acquired under the Offer at the meeting requisitioned by the dissidents.

JLL's bid is currently scheduled to expire June 1.

On June 12, 2009, Patheon is scheduled to release its financial results for the fiscal second quarter ended April 30, 2009. Based on all information provided to it to date, the Special Committee continues to believe that an independent Patheon, successfully acting on its strategy, remains the best available alternative for shareholders. Patheon shareholders can help maintain the independence of their company simply by not tendering their shares to the JLL bid.

About Patheon
Patheon Inc. is a leading global provider of contract development and manufacturing services to the global pharmaceutical industry. Patheon prides itself in providing the highest quality products and services to more than 300 of the world's leading pharmaceutical and biotechnology companies. Patheon's services range from preclinical development through commercial manufacturing of a full array of dosage forms including parenteral, solid, semi-solid and liquid forms. Patheon uses many innovative technologies including single-use disposables, Liquid-Filled Hard Capsules and a variety of modified release technologies.

Patheon's comprehensive range of fully integrated Pharmaceutical Development Services includes pre-formulation, formulation, analytical development, clinical manufacturing, scale-up and commercialization. Patheon can take customers direct to clinic with global clinical packaging and distribution services and Patheon's Quick to Clinic™ programs can accelerate early phase development project to clinical trials while minimizing the consumption of valuable API.

Patheon's integrated development and manufacturing network of 11 facilities, and 6 development centers across North America and Europe, strives to ensure that customer products can be launched with confidence anywhere in the world. For more information visit www.patheon.com

SOURCE: Patheon Inc.

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