King Pharmaceuticals and Jones Pharma Incorporated Announce Merger

    BRISTOL, Tenn., and ST. LOUIS, July 13 /PRNewswire/ -- King
 Pharmaceuticals, Inc. (NYSE:   KG) and Jones Pharma Incorporated (Nasdaq:   JMED)
 announced today that they have entered into a definitive agreement to merge
 the two companies in a stock-for-stock transaction.  The merger represents the
 combination of two of the premier specialty pharmaceutical companies and
 results in a company with a diversified therapeutic portfolio with multiple,
 rapidly growing products.  King expects the transaction to be accreative to
 earnings immediately upon closing, excluding any non-recurring transaction
 expenses, and will add approximately 3% to 4% to projected earnings per share
 for 2001.  Following completion of the transaction, the new company will have
 a combined sales force of over 400 representatives, $552.6 million pro forma
 revenues for the most recent preceding 12 month period, and an enterprise
 value of approximately $7.8 billion.
     Under the terms of the agreement, which has been approved by the boards of
 directors of both companies, holders of Jones common stock will be entitled to
 receive 1.125 shares of King common stock in exchange for each share of Jones
 common stock.  Based on the closing price of King common stock on July 12,
 2000, the merger values each share of Jones common stock at approximately
 $51.12, or approximately $3.4 billion, providing a premium of approximately
 38% over the trailing 30 calendar day average closing price per share of Jones
 common stock.  Jones common stock closed at $43.75 per share on July 12, 2000.
 Following the completion of the merger, Mr. Andrew Franz, Chief Operating
 Officer of Jones, will be joining King's board of directors, and will become
 President and CEO of Jones, as a wholly owned subsidiary of King.  The
 transaction is expected to be accounted for as a tax-free pooling of interests
 transaction.  Closing of the transaction is subject to approval by the holders
 of a majority of the outstanding common stock of King and Jones, appropriate
 governmental approval, and other customary conditions, and is expected to be
 completed before the end of 2000.
     John M. Gregory, Chairman and Chief Executive Officer of King, stated,
 "The merger of King and Jones will provide an excellent business combination
 that will rapidly position King as one of the largest specialty pharmaceutical
 companies with an estimated combined market capitalization of over $7 billion.
 The merger will provide King with a more diversified portfolio of branded
 pharmaceutical products with the addition of Jones' Levoxyl(R), Thrombin-
 JMI(R), and Cytomel(R) such that the Company's key therapeutic categories will
 be cardiovascular, anti-infectives, endocrinology, and women's health.
 Moreover, King's sales force will increase to over 400 representatives which
 will provide potential synergies in the expanded marketing of our products."
 Mr. Gregory added, "The significantly greater market capitalization and the
 potential substantial reduction in the Company's outstanding debt resulting
 from the contemplated merger will better position King for the continued
 execution of our plan to strategically acquire branded pharmaceutical products
 and companies, while continuing to grow our current products through focused
 promotion and marketing."
     Dennis M. Jones, Chairman and Chief Executive Officer of Jones, said,
 "Following an exciting 19-year history of growth, a merger with King presents
 an exciting opportunity for Jones Pharma's shareholders and associates.  It
 provides us with a 45% stake in a fully integrated specialty pharmaceutical
 company with a promising R&D pipeline and an outstanding marketing capability.
 This merger will allow us to take advantage of a combined sales and marketing
 infrastructure of over 400 sales people and to increase the marketing efforts
 of our products, particularly with general practitioners and family
 practitioners.  I am also excited about this transaction because of my
 confidence in King and its management team.  Mr. John Gregory is a very
 bright, energetic young entrepreneur.  He has built one of the leading
 emerging pharmaceutical companies, in just a few short years.  This fact gives
 me confidence in his ability to continue King's rapid growth, not to mention
 their Altace(R) news released on May 1, 2000, reporting on the FDA's Cardio-
 Renal Drugs Advisory Committee unanimously recommending the approval of
 Altace(R) for additional indications after the HOPE Study data was submitted."
     Mr. Jones further commented, "After 36 enjoyable years in the
 pharmaceutical industry, I believe it is time for Judy and me to step down.
 However, I plan on enthusiastically remaining with the combined Company as a
 consultant and significant shareholder.  Further, Jones' strong management
 team, including Andrew Franz and Mike Bramblett, will be assuming executive
 positions in the combined Company and will be in a position of continuing to
 make significant contributions."
     Jones Pharma Incorporated, founded in 1981, is an emerging specialty
 pharmaceutical company with a national sales force of 123 dedicated sales
 representatives who promote Jones' products throughout the United States.
 Jones' strategy has been to build a portfolio of growing products through the
 acquisition of under-promoted, promotion sensitive FDA approved products from
 other pharmaceutical companies.  About half of Jones' sales are generated by
 the thyroid-disorder drugs Levoxyl(R), Tapazole(R), Triostat(R), and
 Cytomel(R).  Jones' other products include Thrombin-JMI(R) for controlling
 blood loss during surgery; Brevital Sodium(R), an anesthetic; and veterinary
 pharmaceuticals, Soloxine(R), Tussigon(R), and Pancrezyme(R). In early 2000,
 Jones' 574% ten-year sales growth and 1,633% ten-year earnings growth were
 recognized by the Wall Street Journal's Fifth Annual Shareholder Scoreboard.
 Jones was ranked number one in ten-year shareholder return when compared to
 its peers within the pharmaceutical sector.  When compared to America's top
 1,000 companies in 76 industries, Jones Pharma was ranked 23rd in five-year
 shareholder return.  In addition, Jones was named by Forbes in November 1999
 as one of the "200 Best Small Companies in America" for seven of the last ten
 years.
     In the event the merger is terminated by either company, King and Jones
 have agreed that, in certain circumstances, a $100 million cash termination
 fee will be paid by the terminating party.  Jones may elect not to proceed
 with the transaction if the average closing price of King common stock falls
 below $29.33 per share, unless King elects to increase the exchange ratio to a
 number equal to the average trading price divided by $33.00 per share.  For
 purposes of the foregoing, the "average trading price" will be computed by
 taking the volume-weighted average sales price per share as reported on the
 New York Stock Exchange during the twenty (20) consecutive trading days ending
 with and including the sixth trading day immediately preceding Jones'
 shareholders meeting.
     King previously reported that revenues totaled $379.9 million, net income
 equaled $51.0 million, and diluted earnings per share was 61 cents, excluding
 extraordinary charges, for the year ended December 31, 1999.  For the first
 quarter 2000, King reported that revenues totaled $91.4 million, net income
 equaled $11.5 million, and diluted earnings per share was 14 cents, excluding
 merger and restructuring costs. Jones previously reported that revenues
 totaled $132.5 million, net income equaled $48.9 million, and diluted earnings
 per share was 73 cents for the year ended December 31, 1999.  For the first
 quarter 2000, Jones reported that revenues totaled $45.7 million, net income
 equaled $19.2 million, and diluted earnings per share was 28 cents.  Jones
 reported that cash, cash equivalents, and investments totaled $199.8 million
 on March 31, 2000.
     Credit Suisse First Boston acted as financial advisor to King and Chase
 H&Q acted as financial advisor to Jones.
     A conference call regarding the acquisition is scheduled for 2:00 p.m.,
 E.D.T., on Thursday, July 13, 2000.  Interested parties may listen to the call
 by dialing in the U.S., 1-888-868-9078, or outside the U.S., 973-628-6885, and
 by requesting the King Pharmaceuticals/Jones Pharma conference call.  A replay
 of the call will be available for two (2) weeks by dialing in the U.S.,
 1-888-264-3165 (access code: 7927), or outside the U.S., 402-220-0140 (access
 code: 7927).
     King, headquartered in Bristol, Tennessee, is a vertically integrated
 pharmaceutical company that manufactures, markets, and sells primarily branded
 prescription pharmaceutical products.  King seeks to capitalize on niche
 opportunities in the pharmaceutical industry created by cost containment
 initiatives and consolidation among large global pharmaceutical companies.
 King's strategy is to acquire branded pharmaceutical products and to increase
 their sales by focused promotion and marketing and through product life cycle
 management.
     This release may contain forward-looking statements which reflect
 management's current views of future events and operations.  These forward-
 looking statements involve certain significant risks and uncertainties, and
 actual results may differ materially from the forward-looking statements.
 Some important factors which may cause results to differ include:  the ability
 of King and Jones to consummate the contemplated merger described above,
 including approval by the shareholders of both King and Jones, management of
 King's growth and integration of its acquisitions, specifically including, but
 not limited to, the contemplated merger, the ability of King to realize
 potential synergies from the contemplated merger, significant leverage and
 debt service requirements of King, dependence on King's ability to continue to
 acquire branded products, dependence on sales of King's products, the high
 cost and uncertainty of research, clinical trials, and other development
 activities involving pharmaceutical products, and the unpredictability of the
 duration and results of the U.S. Food and Drug Administration's review of New
 Drug Applications and other filings and/or the review of other regulatory
 agencies worldwide.  Other important factors which may cause results to differ
 materially from the forward-looking statements are discussed in various
 sections of King's and Jones' latest Form 10-K and other filings with the
 Securities and Exchange Commission.  King does not undertake to publicly
 update or revise any of its forward-looking statements even if experience or
 future changes show that the indicated results or events will not be realized.
 
 

SOURCE  King Pharmaceuticals, Inc.