On shares issue and obtaining the rights to produce a new medicine On February 26th, 2007 the Management Board of JSC “Olainfarm” decided to recommend the Shareholders of the company to approve the issue of 4 million bearer shares planed to be released for free circulation into regulated market. The proceeds of the issue will be invested in extending of the product portfolio and in development of new production facilities. JSC „Olainfarm“ plans to launch a new competitive production line, namely finished forms in ampoules, as well as to start the production of its new original product intended for treatment of cardiovascular diseases - Olvazols ®. Company's development plans include building and equipping of the ampoule production lines as well as research and development investments. Because production capacities and sales volumes are expected to continue to grow rapidly, extension of finished form, raw material and packaging material warehouses are is also planned. Public placement of new issued shares with local and foreign investors will be arranged by Parex Banka, which holds a leading position in Baltic investment banking market and is one of the most professional arrangers of securities issues. The increase of share capital will be discussed and decided on AGM planned to be held on April 13th, 2007. The announcement about the AGM will be published this week. „Looking at 2006 I can say that the company has entered a new stage of development. Investments planned for the nearest years to come are aimed at development and production of products with high added value and at strengthening of Olainfarm's positions in western markets. I am happy to see that the resources invested over the last five years today ensure our stable position among the pharmaceutical companies in European and Eastern markets. This is also confirmed by several important agreements signed with international cooperation partners last year and similar ones are to come this year too“Mr. Valerijs Maligins, Chairman of the Board of Olainfarm admits. The necessity to introduce new products in ampoules has become more important as Olainfarm has decided to produce a new original medicine „Olvazols“, intended for treatment of cardiovascular diseases. This medicine was invented and developed by group of Latvian scientists under guidance of professor Ivars Kalvins. Among other forms, this medication will also be available in ampoules. „Olvazols“ could also be used for strengthening of heart and blood circulation in cases of acute cardiac infarction and stroke. On February 26th, 2007 JSC “Olainfarm” has entered a Licence agreement regarding the use of intellectual property to this Product. About the financial results of 2006. Net non-audited profit of JSC „Olainfarm“of 2006 was 1.06 million lats (1.5 million Euro) and the sales have increased by 28% compared to a previous year. The non-audited financial reports on year 2006 will be published tomorrow on February 28th, 2007. According to non-audited financial results of JSC „Olainfarm“ of 2006, total sales of the Parent company has grown by 28% over the year to 15.56 million lats (22.14 million Euro). Net profit of the reporting period has reached 1.06 million lats (1.5 million Euro) which is almost three times the profit of a year before (non-consolidated profit of 2005 was 346 424 lats (492'916 Euro)). Total exports of the company have increased by 34% from 9.33 million lats (13.27 million Euro) in 2005 to 12.54 million lats (17.84 million Euro) in 2006. 81% of sales were exports in 2006. The biggest export sales were made in Russia and other CIS countries, where products worth 9.5 million lats (13.51 million Euro) were sold. In 2006 Olainfarm's sales in Latvian market have grown by 8% and were 3.02 million lats (4.29 million Euro). Olainfarm's earnings per share were 0.08 lats (0.11 Euro), compared to 0.06 lats (0.08 Euro) in 2005. Olainfarm plans that its sales in 2007 will increase by another 32% to 20.66 million lats (29.39 million Euro), while the planed net profit for 2007 is 1.7 million lats (2.41 million Euro), which means an increase for 61%. Olaine, February 27th, 2007 Prepared by Salvis Lapinsh Deputy CFO JSC Olainfarm Mobile. +37126448873 E-mail: slapinsh@olainfarm.lv