Hawthorne, NY, October 2, 2001 – Taro Pharmaceutical Industries Ltd. (Nasdaq/NMS: TARO) announced today that it has priced its previously announced offering of 5,000,000 of its ordinary shares at a public offering price of $34.30 per share. 3,200,000 of the shares are being offered by the company and 1,800,000 of the shares are being offered by selling shareholders. The company has also granted to its underwriters an option to purchase 750,000 additional shares at the public offering price to cover over-allotments.

Merrill Lynch & Co., Bear, Stearns & Co. Inc., Banc of America Securities LLC, and CIBC World Markets are acting as the representatives of the underwriters.

The offering is scheduled to close on Friday, October 5, 2001, subject to customary closing conditions.

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 is made exclusively by means of the company’s prospectus dated October 1, 2001, copies of which may be obtained from Taro Pharmaceuticals U.S.A., Inc. at the address set forth above.