Xyrem Approvable Pending Resolution of Issues

Minneapolis, MN - July 3, 2001

Orphan Medical, Inc announced today that the Food and Drug Administration (FDA) has completed its review of the new drug application for Xyrem® (sodium oxybate) oral solution and has determined that it is approvable for the indication of cataplexy related to narcolepsy.

Orphan Medical management intends to meet with the Agency as soon as possible to discuss issues raised in the Approvable Letter received late on July 2 from the Agency. Based on its initial review the Company estimates that it could meet the requirements outlined in the FDA's Approvable Letter this year. The timeline for final approval will be determined after the Company has met with the Agency.

The issues to be addressed with the Agency include:

• the need for a safety update of on-going clinical trials
• the need for an additional acute exposure trial in respiratory compromised patients
• final product labeling must be defined
• minor modifications to the Company's proposed risk management program

In addition, the Company's manufacturer of finished product is currently subject to a warning letter from the FDA with respect to current Good Manufacturing Practices (GMP) not related to Xyrem. Before full approval can occur, this manufacturer must undergo a successful GMP re-inspection and a pre-approval inspection relating to manufacture of Xyrem.

"The Company is encouraged that the FDA has concluded that Xyrem is approvable pending resolution of issues," said John H. Bullion, Orphan Medical Chief Executive Officer. "We will continue to work with the FDA to obtain approval of this important new drug as soon as possible."