Orphan Medical Announces Fourth Quarter 2004 Xyrem Prescription Levels Up 9%

Expects 2005 Revenue to Exceed $35.0 Million

Minneapolis, MN - January 20, 2005

Orphan Medical, Inc. announced that 8,928 Xyrem® prescriptions were filled during the fourth quarter ended December 31, 2004, an increase of 9 percent from the 2004 third quarter and up 99 percent from the prior-year fourth quarter. The Company filled a total of 28,537 prescriptions in 2004, an increase of 123 percent from 2003.

John H. Bullion, Chief Executive Officer, stated, "We are very pleased with the growth of Xyrem in 2004 and are excited about the potential for significant growth in the future. Prescription levels at year-end 2004 represent annualized revenues of approximately $15.0 million and we expect strong growth in new Xyrem prescriptions in 2005. We anticipate Xyrem will grow at a high rate in 2006 with FDA approval of the recently submitted Supplemental New Drug Application (sNDA) for the use of Xyrem for all of the primary symptoms of narcolepsy. We are also laying the groundwork for longer-term growth with several Phase IV studies and with the proof-of-principle trial assessing Xyrem's potential in treating the symptoms of fibromyalgia syndrome."

Year-End 2004 and 2005 Revenue Guidance

Timothy McGrath, Chief Financial Officer, said, "In our previously issued revenue guidance, we anticipated total 2004 revenue of $23 million to $24 million. We are pleased to report that total 2004 revenue should exceed $23.7 million with product revenue contributing approximately $21.3 million. Xyrem contributed approximately $10.6 million to product revenue. We expect total revenue for 2005 to exceed $35.0 million, with Xyrem revenue contributing $20.0 million, other product revenue of nearly $11.0 million and milestone revenue of approximately $4.0 million. Our cash balance at the end of 2004 is approximately $12.7 million. We expect this balance, along with net cash inflows from revenues, to support the Company's programs into 2006."

Clinical Activities

The Company recently submitted an sNDA that is expected to expand the Xyrem label to encompass improvement in the other primary symptoms of narcolepsy, specifically the reduction of excessive daytime sleepiness (EDS) and the improvement in fragmented nighttime sleep, in addition to the established efficacy of Xyrem in treating cataplexy. Xyrem is currently marketed as the first and only approved treatment for cataplexy, a sudden loss of muscle tone that is a debilitating symptom of narcolepsy.

During the third quarter of 2005, Orphan Medical expects to announce results from its proof-of-principle trial to evaluate Xyrem in the treatment of fibromyalgia syndrome (FMS). FMS is a chronic condition that is estimated to affect over four million individuals in the United States and represents an estimated market opportunity in excess of $1.0 billion per year. The disease is characterized by widespread muscle pain and stiffness and affects women three times more often than men. Other symptoms include persistent fatigue, headaches, cognitive or memory impairment, morning stiffness and non-restorative sleep.

About Narcolepsy

Narcolepsy is a chronic, debilitating neurological disease whose primary symptoms are excessive daytime sleepiness, fragmented nighttime sleep and cataplexy. Cataplexy, a sudden loss of muscle tone, is usually triggered by strong emotions such as laughter, anger or surprise. All patients with narcolepsy suffer from excessive daytime sleepiness and an estimated 60 to 90 percent suffer from cataplexy. Patients often selectively isolate themselves from social interaction with others resulting in a worsening effect on a patient's quality of life. Narcolepsy afflicts 100,000 to 140,000 Americans of which an estimated 50,000 receive some form of treatment for their symptoms.

About Orphan Medical, Inc.

Orphan Medical acquires, develops and markets pharmaceuticals of high medical value for inadequately treated and uncommon CNS diseases treated by specialist physicians. Xyrem has now been assessed as a treatment for the full range of narcolepsy symptoms including excessive daytime sleepiness. The Company is also conducting a trial to evaluate Xyrem as a treatment for symptoms of fibromyalgia syndrome. Orphan Medical's Internet Web site address is www.orphan.com

The information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "expects," "anticipates," "intends," "may," "should," "plans," "believes," "seeks," "estimates," "could," "would" or the negative of such terms or other comparable terminology. Such forward-looking statements are based upon current expectations and beliefs and involve numerous risks and uncertainties, both known and unknown, that could cause actual events or results to differ materially from these forward-looking statements. A number of factors could cause actual results to differ materially from the Company's assumptions and expectations. These are set forth in the cautionary statements included in Orphan Medical's most recent Form 10-Q or Form 10-K filed with the Securities and Exchange Commission. (These documents can be accessed through the Orphan Medical Web site at http://www.orphan.com ). All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements.