27^th Consecutive Quarter of Record Sales
17^th Consecutive Quarter of Record Net Income

3^rd Quarter 2002 Highlights:

• Sales Increase 35% to $55.5 Million
• Net Income Increases 58% to $11.6 Million, or $0.39 Per Diluted Share
• Facility Acquired for New U.S. Research Center

Financial Highlights ($000)*

* Except per share data.

Hawthorne, NY, October 24, 2002 -- Taro Pharmaceutical Industries Ltd. (Nasdaq/NMS: TARO) today reported record results for the Company's third quarter and the nine-month period ended September 30, 2002.

Third Quarter Results
The third quarter results represent the Company’s 27^th consecutive quarter of record sales and its 17^th consecutive quarter of record net income.

Third quarter 2002 sales increased 35% to $55.5 million from $41.0 million in the third quarter of 2001. Taro's gross profit in the third quarter of 2002 increased 32% to $33.9 million, or 61% of sales, up from $25.8 million, or 63% of sales, in the third quarter of the prior year. Selling, general and administrative expenses decreased as a percentage of sales to 24%, or $13.1 million, compared with 27% of sales, or $10.9 million, in the third quarter of 2001.

Operating income before R&D expenses increased to $20.9 million, or 38% of sales, from $14.9 million, or 36% of sales, for the third quarter of 2001. R&D expenses increased to $6.8 million, or 12% of sales, compared with $4.9 million, also 12% of sales, for the third quarter of 2001.

Net income for the quarter increased 58% to $11.6 million, or $0.39 per diluted share, compared with $7.3 million, or $0.29 per diluted share, for the third quarter of 2001.

"Growth in our business continued in the third quarter, even when compared to the third quarter of 2001, which was an outstanding quarter for Taro," stated Barrie Levitt, M.D., Chairman of the Company.

Nine-Month Results
For the nine-month period ended September 30, 2002, sales increased 41% to a record $149.6 million, compared with $105.8 million for the same period in 2001. Taro's gross profit for the nine-month period increased by 41% to $93.6 million, or 63% of sales, from $66.6 million, also 63% of sales, for the same period in 2001. Selling, general and administrative expenses for the nine-month period decreased as a percentage of sales to 25%, or $37.5 million, compared with 29% of sales, or $31.2 million, for the same period in 2001.

Operating income before R&D expenses was $56.1 million, or 38% of sales, up from $35.4 million, or 33% of sales, for the same period in the prior year. R&D expenses increased to $18.4 million, or 12% of sales, from $13.8 million, or 13% of sales, for the same period in 2001.

Net income for the nine-month period increased 96% to a record $31.6 million, or $1.08 per diluted share, compared with $16.2 million, or $0.64 per diluted share, for the same period in 2001.

Balance Sheet
At September 30, 2002, total assets were $346.7 million, compared with $307.8 million at the end of 2001. Cash and cash equivalents were $135.1 million, compared with $150.7 million at the end of 2001.

For the nine-month period, property, plant and equipment increased $24.8 million to $78.9 million. Deferred taxes and other assets, including those related to the acquisition of certain assets of Thames Pharmacal, Inc., increased $8.0 million to $27.4 million.

Shareholder’s equity at September 30, 2002 was $249.9 million, compared with $218.4 million at the end of 2001.

Facility Purchased to Establish New Research Operations
In August, the Company’s U.S. subsidiary, Taro Pharmaceuticals U.S.A., Inc., ("Taro USA"), purchased a one-third interest in a building to house its U.S. research and development operations. After renovations, Taro USA will occupy 37,000 square feet of the newly purchased space, which is located in Hawthorne, New York.

"Taro is expanding its commitment to research and development," said Dr. Levitt. "This new center will enable us to augment our R&D operations in Israel and Canada by tapping into the large pool of pharmaceutical research talent in the New York tri-state area."

FDA Filings
The Company has 15 Abbreviated New Drug Applications on file with the U.S. Food and Drug Administration, including one tentative approval. In addition, Taro has multiple regulatory filings in Canada, Israel and other countries around the world.

Outlook
"Over the near term, Taro will focus on prudent investments in research, acquisitions, and increasing manufacturing capacity," said Dr. Levitt. "Our commitment is to ensure that we provide our customers with a continuous supply of the highest quality healthcare products."

Conference Call
The Company will conduct a conference call to discuss third quarter and nine-month results on Thursday, October 24, 2002 at 11:30 a.m. Eastern Time (8:30 a.m. Pacific Time). The call will be available live via the Internet by accessing www.taro.com. For those who cannot listen to the live broadcast, an online replay will be available through October 31, 2002 on www.taro.com. A telephone replay will also be available through October 31, 2002 by dialing 800-428-6051 (domestic U.S.) or +973-709-2089 (international) and entering the passcode 264620 when prompted.

Taro Pharmaceutical Industries Ltd. 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.

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements that are not describing historical facts, and comments concerning new research operations in the U.S., investments in research and acquisitions, increasing manufacturing capacity, and distribution. Although Taro Pharmaceutical Industries Ltd. believes the expectations reflected in such forward-looking statements to be based on reasonable assumptions, it can give no assurances that its expectations will be attained. Factors that could cause actual results to differ include general economic conditions, industry and market conditions, slower than anticipated penetration of new markets, changes in the Company's financial position, regulatory actions and legislative actions in the countries in which Taro operates, and other risks detailed from time to time in the Company's SEC reports, including its 2001 Annual Report on Form 20-F.

- FINANCIAL TABLES FOLLOW -

* Reclassifed.