Patheon Announces New Bank Financing

Toronto, Canada (March 28, 2007) – Patheon Inc. announced today that it has entered into an agreement with J.P. Morgan Securities Inc. (“JPMorgan”) and GE Commercial Finance for new credit facilities to refinance portions of its existing North American debt and its U.K. debt.   The refinancing is conditional on the completion of the previously announced $150 million convertible preferred share investment by JLL Partners Fund V, L.P., and is expected to close, together with the JLL Partners investment, on or before April 30, 2007.

The new credit facilities are in the aggregate amount of US$225 million, comprising a
seven-year US$150 million term loan facility and a five-year US$75 million revolving facility.  The proceeds of the term facility, together with the proceeds of the JLL Partners investment, will be used to repay the Company’s obligations under its existing North American and U.K. credit facilities. 

“Today’s agreement with JPMorgan and GE Commercial Finance marks the next major milestone in our capital restructuring process,” said John Bell, Chief Financial Officer, Patheon Inc.  “With the investment by JLL Partners and the new long-term debt facilities, we will have the appropriate long-term financial structure in place to operate and grow our business effectively.”

“The JLL investment and bank refinancing are important to the future of Patheon and represent the culmination of an extensive strategic and financial alternatives review process undertaken over the past six months,” said Riccardo Trecroce, Chief Executive Officer of Patheon Inc. 

Patheon also announced that the Toronto Stock Exchange has granted conditional approval for the issuance of the convertible preferred shares to JLL Partners.  As a condition of its approval, the TSX is requiring that Patheon's common shares be renamed "restricted voting shares", to reflect that common shareholders will have the right to elect six of the nine members of Patheon’s Board of Directors, but will not be entitled to vote to elect the remaining three directors who will be JLL Partners’ representatives under the terms of the agreement.  This change does not affect the number of shares outstanding, the terms and conditions of the outstanding shares or their listing and trading on the TSX.

Patheon is seeking approval of the JLL Partners investment at its upcoming shareholders’ meeting on April 19, 2007.  The management proxy circular for the meeting is being mailed to shareholders this week and also is available on Patheon’s web site at www.patheon.com.

FORWARD-LOOKING STATEMENTS

Cautionary Note

This news release contains forward-looking statements which reflect management’s expectations regarding the Company’s future growth of operations, performance (both operational and financial) and business prospects and opportunities.  Although management believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties.  Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from expectations include, but are not limited to, currency fluctuations, the level of outsourcing services required by the pharmaceutical companies (and in particular our clients), the impact of changes in pharmaceutical development and manufacturing regulations and general economic and market factors (including inflation and changes in laws) and other factors discussed in materials filed with applicable securities regulatory authorities from time to time.

ABOUT PATHEON

Patheon (TSX:PTI; www.patheon.com) is a leading global provider of drug development and manufacturing services to the international pharmaceutical industry. Patheon operates a network of 14 facilities in the United States, Canada and Europe, employing more than 5,300 people and serving a client base of 250 pharmaceutical and biotechnology companies.

For further information: Mr. Riccardo Trecroce, Chief Executive Officer, Tel:  (905) 812-6877, Fax:  (905) 812-6613, Email: rtrecroce@patheon.com; Mr. John Bell, Chief Financial Officer, Tel: (905) 812-6812, Fax:  (905) 812-6613, Email: john.h.bell@patheon.com; Ms. Shelley Jourard, Director, Corporate Communications, Tel:  (905) 812-6614, Fax:  (905) 812-6613; Email: sjourard@patheon.com.

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