Daniel H. Movens, CEO, commented, "We were confident of our position and are gratified that the Federal U.S. Court of Appeals supported the ruling of the Eastern District Court of Michigan that we do not infringe. We have continued to market Tramadol with Acetaminophen since the FDA approved our product as a generic version of Ultracet(R)."

On September 22, 2004, Ortho-McNeil filed a complaint in the United States District Court for the Eastern District of Michigan alleging that Caraco's filing of an ANDA seeking approval to market its generic version of Ortho- McNeil's Ultracet(R) infringed Ortho-McNeil's patent, which expires on September 6, 2011. Ortho-McNeil sought an order from the district court which, among other things, directed the FDA not to approve Caraco's ANDA any earlier than the claimed expiration date. The ANDA filed by Caraco contained a Paragraph IV Certification challenging the Ortho-McNeil patent. On October 8, 2005, arguments were heard in the United States District Court for the Eastern District of Michigan on the Caraco's motion for summary judgment on the issue of non-infringement. On October 19, 2005 the motion for summary judgment was granted in Caraco's favor. Although the district court has determined that Caraco does not infringe Ortho-McNeil's original patent, on July 31, 2006, Ortho-McNeil filed a lawsuit against Caraco in the United States District Court for the District of New Jersey, alleging that Caraco's generic version of Ultracet(R) infringes its Reissue Patent Number RE39221. On September 26, 2006, Caraco filed an Answer denying, among other things, that its generic product infringes any valid claims of Ortho-McNeil's reissue patent. The Corporation believes that, like its original patent, Ortho- McNeil's reissue patent is invalid and/or is not infringed by Caraco's manufacture, use or sale of the product and the Corporation intends to vigorously defend this action.

Detroit-based Caraco Pharmaceutical Laboratories, Ltd., develops, manufactures, markets and distributes generic and private-label pharmaceuticals to the nation's largest wholesalers, distributors, drugstore chains and managed care providers.

Safe Harbor: This news release contains forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those described in the forward- looking statements. These risks and uncertainties are contained in the Corporation's filings with the Securities and Exchange Commission and include: information that is of a preliminary nature and may be subject to adjustment, not obtaining or delays in obtaining FDA approval for new products, governmental restrictions on the sale of certain products, dependence on key personnel, development customer acceptance and demand for new pharmaceutical products, availability of raw materials, timing and success of product development and launches, integrity and reliability of the Corporation's data, lack of success of attaining full compliance with regard to regulatory and cGMP compliance, experiencing difficulty in managing our recent rapid growth and anticipated future growth, dependence on limited customer base, occasional credits to certain customers reflecting price reductions on products previously sold to them and still available as shelf-stock, possibility of an incorrect estimate of charge-backs and the impact of such an incorrect estimate on net sales, gross profit and net income, dependence on few products generating majority of sales, product liability claims for which the Company may be inadequately insured, subjectivity in judgment of management in applying certain significant accounting policies derived based on historical experience, terms of contracts, our observations of trends of industry, information received from our customers and other sources, to estimate revenues, accounts receivable allowances including chargebacks, rebates, income taxes, values of assets and inventories, litigation involving claims of patent infringement, litigation involving claims for royalties relating to a prior contract for one product and other risks identified in this report and identified from time to time in our reports and registration statements filed with the Securities and Exchange Commission. These forward-looking statements represent our judgment as of the date of this report. We disclaim, however, any intent or obligation to update our forward-looking statements.

SOURCE Caraco Pharmaceutical Laboratories, Ltd.

Daniel Movens or Jitendra Doshi, +1-313-871-8400, or Aaron Miles, +1-313-556-4150, all of Caraco Pharmaceutical Laboratories, Ltd.

http://www.caraco.com