Third Quarter Revenues Grow 32%

Full Year EPS Outlook Narrowed to Upper Half of Previous Guidance Range

BRIDGEWATER, NJ -- (Marketwire) -- 10/29/08 -- Alpharma Inc. (NYSE: ALO), a global specialty pharmaceutical company, today announced third quarter 2008 diluted earnings per share ("EPS") of $0.10. The Company's third quarter 2008 financial performance reflects:

--  Revenue of $175.7 million, an increase of 32% over third quarter 2007
    revenue from continuing operations of $133.2 million, reflecting continued
    strong Pharmaceuticals revenue gains and recovery in Animal Health U.S.
    livestock sales;
--  Operating income of $9.7 million, including approximately $4.2 million
    ($0.06 EPS) of costs associated with King Pharmaceuticals, Inc.'s ("King")
    unsolicited tender offer (the "tender offer") for all issued and
    outstanding shares of the Company's common stock.  Excluding costs
    associated with the tender offer, operating income totaled $13.9 million,
    an increase of 11% over third quarter 2007 operating income from continuing
    operations of $12.5 million;
--  EPS of $0.10, or $0.16* excluding the costs associated with the tender
    offer, compared to third quarter 2007 EPS from continuing operations of
    $0.12.
    

"Today's announcement of strong third quarter results is in line with our guidance to deliver positive earnings in the second half of 2008," commented Dean Mitchell, President and Chief Executive Officer. He continued, "While significant investments during the first half of this year were necessary to expand our commercial infrastructure and to support the launch of the FLECTOR® Patch, our third quarter results demonstrate initial returns on those investments. In addition to its successful launch, prescription growth of FLECTOR® Patch has continued as a result of enhanced formulary coverage and ongoing promotional activities. Performance in our Animal Health business has strengthened in the third quarter as demand for our U.S. livestock products has improved, reflecting some easing of input cost pressures on our customers. We also recently announced that the new drug application for EMBEDA(TM) Capsules has been accepted for priority review by the U.S. Food and Drug Administration, and will be reviewed at a joint meeting of the Anesthetic and Life Support Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee on November 14, 2008."

On September 12, 2008, King through a wholly-owned subsidiary, launched an unsolicited tender offer for all issued and outstanding shares of Alpharma's Class A Common Stock for $37.00 in cash, subject to a number of terms and conditions contained in King's tender offer documents. On September 26, 2008, the Company's Board of Directors recommended that shareholders reject the King offer and not tender shares while the Company continues to pursue a previously announced process to explore all strategic alternatives to maximize shareholder value, including a possible sale of the Company to King or to another party for a price in excess of $37.00 per share. No assurance can be given that a transaction will be announced or consummated by Alpharma or whether such process will ultimately yield a transaction with a per share price in excess of $37.00. On October 13, 2008, King extended its previously announced tender offer through November 21, 2008.

Business Reviews

Pharmaceuticals: Revenue increased by $39.7 million, or 93.6%, to $82.1 million in the third quarter of 2008, compared to revenue of $42.4 million in the third quarter of 2007. The revenue growth was principally attributable to the launch of the FLECTOR® Patch (diclofenac epolamime topical patch) 1.3%, the first prescription topical NSAID patch approved by the U.S. Food and Drug Administration ("FDA"). Third quarter 2008 revenue for the FLECTOR® Patch totaled $30.9 million and prescriptions totaled approximately 172,200, a 9% sequential increase in total prescriptions over the second quarter of 2008. The remainder of the revenue increase in the Pharmaceuticals business relates to sales of KADIAN® (morphine sulfate extended-release) Capsules, which increased 20.5% over last year's third quarter, to $51.2 million in the third quarter of 2008, reflecting increased pricing and increased volumes due to prescription growth. Third quarter 2008 KADIAN® Capsule prescriptions increased 5% versus the third quarter of 2007.

Pharmaceuticals reported operating income of $9.1 million in the third quarter of 2008, versus operating income of $4.6 million during the third quarter of 2007. The increase in operating income is attributable to the additional gross profit realized on increased revenues, partially offset by increased selling, general and administrative ("SG&A") expenses, principally reflecting the sales force expansion and other investments to support the launch of the FLECTOR® Patch.

On September 2, 2008, the FDA advised the Company that its New Drug Application ("NDA") for EMBEDA(TM) (morphine sulfate extended-release with sequestered naltrexone hydrochloride) Capsules had been accepted, and designated for priority review. The priority review status provides for a review of six months from the date of submission. The EMBEDA(TM) Capsule NDA was submitted on June 30, 2008. On October 10, 2008, the FDA announced that the EMBEDA(TM) Capsule NDA would be discussed at a November 14, 2008 joint meeting of the Anesthetic and Life Support Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee. Alpharma is fully committed to collaborating with the FDA and Advisory Committees to complete a timely review of the EMBEDA(TM) Capsule NDA, and continues to anticipate a first quarter 2009 launch following approval.

In October 2008, pursuant to a development and license agreement, DURECT Corporation ("DURECT") granted to the Company's affiliate, Alpharma Ireland Limited, the worldwide rights to develop and commercialize an investigational transdermal bupivicaine patch currently under development for the treatment of pain associated with post-herpetic neuralgia. Under the terms of the agreement, Alpharma Ireland Limited paid to DURECT an upfront license fee of $20 million, with additional payments to be made upon achievement of predefined development, regulatory and sales milestones, as well as royalties on future sales. Alpharma Ireland Limited will control and fund the development program and the agreement includes the right to use the trademark ELADUR(TM) in connection with the product candidate.

Animal Health: Third quarter revenues increased 3.1% to $93.6 million, compared to $90.8 million in the third quarter of 2007. The year-over-year effects of currency favorably impacted third quarter 2008 revenues by approximately $1.2 million. Operating income in the third quarter of 2008 amounted to $16.6 million, with an operating margin of 17.7%. Third quarter 2007 operating income of $18.3 million and operating margin of 20.2% included $2.7 million of income related to the favorable settlement of a contract dispute. Excluding the impact of the favorable settlement, third quarter 2007 operating margin was 17.2%. The improvement in the third quarter 2008 operating margin reflects the benefits of increased pricing and productivity programs, partially offset by the negative effects of increased input costs.

Animal Health continues to advance its key 2008 growth initiatives. Through the first nine months of 2008, the business obtained 21 approvals to support its program of geographic expansion, launched two new products and received five approvals for new indications for existing products.

Third Quarter Comparison of Other Consolidated Income Statement Items - Continuing Operations

Selling, general and administrative expenses increased $34.5 million compared to the third quarter of 2007 and include $4.2 million of costs associated with the tender offer. Excluding costs associated with the tender offer, SG&A expenses as a percentage of revenues increased to 48.5% in the third quarter of 2008 from 41.2% in the third quarter of 2007. The increase principally relates to the sales force expansion and other investments in the Pharmaceuticals business to support the launch of the FLECTOR® Patch. On a sequential basis, SG&A expenses as a percentage of revenues declined from 57.5% in the second quarter of 2008 to 48.5% in the third quarter of 2008, excluding costs associated with the tender offer. The sequential decline reflects lower SG&A costs and higher revenues.

Research and development ("R&D") expense in the third quarter of 2008 decreased to $13.5 million, compared to $14.6 million in the third quarter of 2007. As a percentage of revenues, R&D expense amounted to 7.7% in the third quarter of 2008, compared to 11.0% in last year's third quarter, which included costs associated with the completion of the Phase III studies for EMBEDA(TM) Capsules.

Interest income (expense), net decreased $0.3 million, to $2.7 million of net interest income in the third quarter of 2008 compared to net interest income of $3.0 million in the third quarter of 2007. The decrease in net interest income compared to 2007 reflects lower interest rates on short-term cash investments, partially offset by higher cash and cash equivalent balances on hand.

The tax provision for the third quarter of 2008 amounted to $7.2 million, on pre-tax income of $11.3 million. The tax provision for the third quarter of 2007 was $10.4 million on pre-tax income of $15.7 million.

Share Repurchase Program

In April 2008, the Company announced that its Board of Directors authorized a two-year share repurchase program of up to $150 million. During the third quarter, the Company repurchased 1.5 million shares of common stock under this program at an aggregate cost of $35.5 million and, to date, has repurchased approximately 2.6 million shares of common stock at an aggregate cost of $61.9 million.