January 8, 2004

News Release: Watson Pharmaceuticals Enters Into Licensing Agreement With Paladin for OXYTROL(R) in Canada

Watson Pharmaceuticals, Inc. (NYSE: WPI), a leading specialty pharmaceutical company, announced today that it has entered into a Canadian licensing agreement with Paladin Labs Inc. (TSX: PLB) to market OXYTROL(R), (oxybutynin transdermal system), Watson's novel transdermal patch for the treatment of overactive bladder, with symptoms of urge urinary incontinence, urgency, and frequency. Terms of the agreement were not disclosed. According to the Canadian Continence Foundation, approximately 1.5 million Canadians suffer from overactive bladder and, according to IMS Canada, the total Canadian market for overactive bladder is estimated to exceed CAD$42 million for 2003. 'We are delighted to be partnering again with Paladin, whose well established commercial presence with Canadian urologists will provide Watson with an outstanding strategic marketing partner for OXYTROL(R),'said Allen Chao, Watson's chairman and CEO. 'Overactive bladder can have a significant impact on the lives of those who suffer from it, and we are confident that through this partnership, an important new treatment option will be made available to Canadians.'

Proven Efficacy, with Anticholinergic Side Effects Not Significantly Different from Placebo

Clinical trials involving approximately 1,000 subjects at more than 50 U.S. centers demonstrated that Watson's OXYTROL(R) product, with its unique transdermal delivery system, provides effective control of overactive bladder symptoms over a three to four day period. Data also shows that OXYTROL(R) is well tolerated, with an anticholinergic side effect profile, including dry mouth, constipation and dizziness, not significantly different from placebo.

OXYTROL(R) was accepted for regulatory review by the Therapeutic Products Directorate of Health Canada in May 2003, and was launched in the U.S. by Watson in April 2003.

About OXYTROL(R)

OXYTROL(R) is a thin, flexible, clear patch that should be applied to the abdomen, hip or buttock twice weekly. The active ingredient in OXYTROL(R) is oxybutynin, a medication widely accepted and prescribed in oral formulation for the past 25 years. The OXYTROL(R) transdermal delivery system delivers 3.9 milligrams per day of oxybutynin consistently and continuously through the skin into the bloodstream, bypassing initial metabolism in the liver and the gastrointestinal tract that occurs with oral medications, providing relief of overactive bladder symptoms for up to four days.

The most common adverse events occurring with OXYTROL(R) were application site reactions, dry mouth, constipation, diarrhea, dysuria and abnormal vision. Patients who have urinary retention, gastric retention, uncontrolled narrow-angle glaucoma or hypersensitivity to oxybutynin or other components of OXYTROL(R) should not use OXYTROL(R).

For more information about OXYTROL(R), a detailed product profile is available at www.oxytrol.com .

About Watson Pharmaceuticals, Inc.

Watson Pharmaceuticals, Inc., headquartered in Corona, California, is a leading specialty pharmaceutical company that develops, manufactures, markets, sells and distributes branded and generic pharmaceutical products. Watson pursues a growth strategy combining internal product development, strategic alliances and collaborations and synergistic acquisitions of products and businesses.

For press releases and other company information, visit Watson Pharmaceuticals'Web site at http://www.watsonpharm.com .

About Paladin Labs

Paladin Labs Inc., headquartered in Montreal, Canada, is a leading specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian market. With this strategy, a focused national sales team and proven marketing expertise, Paladin has evolved into one of Canada's leading specialty pharmaceutical companies. Paladin's shares trade on the Toronto Stock Exchange under the symbol PLB. For more information about Paladin, please visit the Paladin Web Site at www.paladinlabs.com .

Forward-Looking Statement

Statements contained in this press release that refer to future events or other non-historical facts about Watson are forward-looking statements that reflect Watson's current perspective of existing trends and information as of the date of this release. Except as expressly required by law, Watson disclaims any intent or obligation to update these forward-looking statements. Actual results may differ materially from Watson's current expectations depending upon a number of factors affecting Watson's business. These factors include, among others, market acceptance of and continued demand for Watson's products, including the impact of competitive products and pricing; patents and other intellectual property rights held by competitors and other third parties; the difficulty of predicting the timing or outcome of product development efforts and regulatory agency approvals and actions; successful compliance with governmental regulations; and other risks and uncertainties detailed in Watson's periodic public filings with the Securities and Exchange Commission, including but not limited to Watson's Annual Report on Form 10-K for the year ended December 31, 2002 and its Quarterly Report on Form 10-Q for the quarters ended March 31, June 30, and September 30, 2003.

SOURCE Watson Pharmaceuticals, Inc.

Investors, Patty Eisenhaur, +1-909-493-5611, or Media, Chris Eso, +1-909-493-4013, both of Watson Pharmaceuticals, Inc.

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