Kobayashi Pharmaceutical Co., Ltd. (TSE: 4967), and US based Combe International, Ltd., have agreed that Kobayashi will acquire the entire Combe-owned 50% of shares in Kobayashi-Combe, Ltd., a Japanese corporation jointly owned by the two companies. As a result, Kobayashi will hold 100% of the common stock in Kobayashi-Combe. As a result of the agreement, Kobayashi will also announce acquire the trademarks owned by Combe in Japan, including Lanacane.

Kobayashi and Combe formed the Kobayashi-Combe joint-venture in 1991 to establish a number of Combe's anti-itch brands, including Lanacane, in Japan. Since then, Kobayashi-Combe has imported products manufactured by Combe, while Kobayashi developed the market for these anti-itch brands in Japan as the Kobayashi-Combe distributor.

The Kobayashi Consumer Product Operation considers the development, marketing and sales of OTC products as top priority. The ownership of 100% of Kobayashi-Combe, and the acquisition of Lanacane and other anti-itch trademarks fits well with the Company's focus on OTC brand development and will allow Kobayashi to further expand in this area.

This share acquisition will have slight effect on Kobayashi's business performance. As such, there will be no change in the business forecast for the fiscal year ending March 2005.

Overview of Kobayashi-Combe, Ltd.

1) Location of head office: 3-6, 4-chome, Doshomachi, Chuo-ku, 
                  Osaka, Japan
2) Date of establishment:        December 13, 1991
3) Representative:               Kazumasa Kobayashi 
4) Capital:                      JPY 40 million (as of March 8, 2005) 
5) Major lines of business:      Import/sales of OTC drugs 
6) Results of financial year
end for the recent 2 years: 
                                (millions of yen) 
Financial Year Ended:  December 2003    December 2004
Sales                     1,241          1,347
Net Income                   39             58
Total Assets                660            766
Shareholders' Equity        234            243

General outline of this share acquisition

					
1) Date of acquisition:             March 8, 2005
2) Total number of shares acquired: 400 shares 
3) Changes in quantities of shares
   and shareholding ratio:

Shareholder    Before acquisition   After acquisition
               Quantity     Ratio   Quantity    Ratio
Kobayashi      400 shares    50.0% 800 shares   100.0%
Combe          400 shares    50.0%    ---        ---