Hawthorne, New York, October 5, 2001 – Taro Pharmaceutical Industries Ltd. (NASDAQ/NMS: TARO) announced today that it has closed a public offering of 5,750,000 ordinary shares at $34.30 per share, including 750,000 shares issued to the underwriters upon the exercise in full of their over-allotment options. Of the 5,750,000 shares, 3,950,000 were sold by Taro and 1,800,000 were sold by selling shareholders.

The net proceeds to the Company from the offering are in excess of $128 million. Taro will use the proceeds to fund research and development, enhance sales and marketing operations, expand manufacturing facilities, and for general corporate purposes. It may also use proceeds to acquire product lines or companies.

Merrill Lynch & Co. served as the lead managing underwriter for the offering and Bear, Stearns & Co. Inc., Banc of America Securities LLC and CIBC World Markets Corp. also served as managing underwriters.

This announcement does not constitute an offer to sell, or the solicitation of an offer to purchase, any ordinary shares or other securities of the Company. Any such offer or solicitation was made exclusively by means of the Company’s prospectus dated October 1, 2001.

Taro is a multinational, science-based pharmaceutical company, dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products.