<PAGE>


                                                                    EXHIBIT 4.27

                                                               Dr. Martin Barkin
                                                               President and CEO
                                                  Telephone: (905) 677-5500 #236
                                                       FACSIMILE: (905) 677-5494
                                                        CELLULAR: (416) 726-8870
                                                              mbarkin@draxis.com




                                                                    May 14, 2001

                                                         PERSONAL & CONFIDENTIAL
DELIVERED VIA COURIER
---------------------

Mr. Jerry Ormiston 416-364-8558
28 Eagle Road,
Toronto, Ontario
M8Z 4H5

Dear Mr. Ormiston:

         We are pleased to offer you employment with DRAXIS Health Inc.
("DRAXIS") on the terms set out below.

1.       EMPLOYMENT

         Effective May 30, 2001, you shall be employed with DRAXIS as its
Executive Director Communications and Investor Relations on the terms and
conditions contained in this Agreement. You shall report to the Chief Executive
Officer of DRAXIS. Without limiting the scope of your duties and
responsibilities as Executive Director Communications and Investor Relations,
you shall be responsible for developing and overseeing DRAXIS' Communications
and Investor Relations Programs and you shall participate in the Business
Development activities of the Company. You will also be a member of DRAXIS'
executive team with participation on the Corporate Management Committee and
advisory to the Executive Operations Committee. In addition, you will perform
any additional employment responsibilities assigned to you by the Chief
Executive Officer of DRAXIS from time to time, provided that such
responsibilities are consistent with the executive nature of the position.

2.       BASE SALARY

         DRAXIS will pay to you during the term of this Agreement, effective May
30, 2001, a gross salary of $130,000 per annum, payable semi-monthly, in
arrears, in 24 equal installments of $5,416.66 ("Base Salary"). Such salary
shall be subject to annual review in accordance with DRAXIS' regular
administrative practices of salary review applicable to the executive officers
of DRAXIS. Any salary increases shall be determined on merit by the Chief
Executive Officer of DRAXIS. The Chief Executive Officer will inform you of any
increases in your salary in advance of the implementation date.

         As an officer of the company, DRAXIS will provide and pay for
directors' and officers' liability insurance and in any event will indemnify and
save you harmless from any action arising within the scope of your employment
responsibilities for DRAXIS and its affiliates (as such term is defined in the
CANADA BUSINESS CORPORATION ACT) ("Affiliates").


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 2


3.       BENEFITS

         You will be entitled to participate in all benefit plans which DRAXIS
shall from time to time make available to its executive employees, subject to
applicable eligibility rules thereof. The benefits currently offered are:

         o  major medical
         o  dental
         o  group life
         o  long term disability
         o  accidental death and dismemberment

4.       STOCK OPTION PLAN

         You will be eligible to participate in the Stock Option Plan of DRAXIS,
which DRAXIS, from time to time, shall make available to employees, in
accordance with the terms and conditions of that plan.

         DRAXIS will grant you options to purchase 25,000 shares within 30 days
of the commencement of your employment (the "Initial Grant"). These options
shall vest as follows:

          a)   8,333 shares on the first anniversary of the Initial Grant;
          b)   8,333 shares on the second anniversary of the Initial Grant; and
          c)   8,334 shares on the third anniversary of the Initial Grant.

         The price of each option shall be the closing price of the DRAXIS
shares on the Toronto Stock Exchange on the trading date immediately preceding
the date of the Initial Grant. The options may be exercised in whole or in part
at any time within five years after the date of the Initial Grant, subject to
vesting as set out above.

         The CEO agrees to recommend to the Board of Directors, within 90
calendar days after the first Board meeting following the Annual General
Meeting, to be held on June 20, 2001, the granting to you of options to purchase
an additional 75,000 shares. The award of these additional 75,000 options is
totally conditional upon the Board of Directors' approval to make additional
stock options available.

5.       DEFERRED SHARE UNIT PLAN

         You will be eligible to participate in the Deferred Share Unit Plan, in
accordance with the terms and conditions of that plan. The Deferred Share Unit
Plan has been established to provide selected employees of DRAXIS and its
Affiliates with the opportunity to acquire share equivalent units convertible to
cash or common shares of DRAXIS. A plan document is available for review.

6.       DRAXIS RETIREMENT PROGRAM  (Under Development)

         You will be eligible to participate in the DRAXIS Retirement Program
which DRAXIS is currently developing to make available to employees, subject to
applicable eligibility rules thereof and in accordance with the terms and
conditions of that plan and approval of the plan by the Board of Directors.

7.       EMPLOYEE PARTICIPATION SHARE PURCHASE PLAN

         You will be eligible to participate in the Employee Participation Share
Purchase Plan which DRAXIS shall from time to time make available to its
employees, subject to applicable eligibility rules thereof and in accordance
with the terms and conditions of that plan.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 3


8.       DISCRETIONARY BONUS

         The Chief Executive Officer and the Compensation Committee, in their
sole discretion, may declare a bonus payable. Such bonus payment is not
guaranteed and payment of a discretionary bonus in any prior year is not a
promise or guarantee of payment in subsequent years. Further, to receive any
discretionary bonus payment, should one be declared, you must be employed on
December 31st of the calendar year for which the bonus is declared. Should a
discretionary bonus be declared, you may be eligible to receive an amount up to
a maximum equivalent to 30% of your Base Salary, or such other amount as may be
determined by the Chief Executive Officer of DRAXIS and the Compensation
Committee of the Board of Directors, in their sole discretion. For the calendar
year 2001 the above mentioned 30% bonus eligibility will be pro-rated to January
1, 2001.

9.       SIGNING BONUS

         DRAXIS will pay to you a signing bonus consisting of the gross amount
of $10,000 which shall be paid to you within 10 business days of your
commencement of employment.

10.      MEMBERSHIPS AND PUBLICATIONS

         DRAXIS will pay all professional memberships, dues and levies required
for membership in the Canadian Investor Relations Institute and other approved
memberships or publications deemed necessary to the conduct of your position.

11.      VACATION

         Commencing in 2001, you shall be entitled to four weeks vacation per
annum to be taken at a time or times acceptable to DRAXIS, having regard to its
operations. There shall be no vacation time carried over from one calendar year
into the following calendar year, unless previous authorization has been
received from the Chief Executive Officer of DRAXIS.

12.      LEGAL FEES

         DRAXIS will reimburse you for independent legal counsel with respect to
the review of this agreement to a maximum of $1,000 upon presentation of
appropriate receipts.

13.      EXPENSES

         DRAXIS agrees that it shall reimburse you for all reasonable traveling
and other out-of-pocket expenses actually and properly incurred in connection
with your duties with DRAXIS and its Affiliates (the "Company"). For all such
expenses you agree you will furnish statements and vouchers as and when required
by DRAXIS.

14.      DEDUCTIONS

         All salary and other payments and allowances outlined in this Agreement
are subject to such withholding and deduction at source as may be required by
law.

15.      EMPLOYEE'S COVENANTS

         You agree that you shall devote the whole of your working time,
attention and ability to the business of DRAXIS and shall use reasonable best
efforts to promote the interests of DRAXIS.

         Further, you agree that you shall duly and diligently perform all the
duties assigned to you while in our employ and shall well and faithfully serve
DRAXIS. You agree that while employed with DRAXIS you shall not, without the
prior written consent of DRAXIS, engage or otherwise be concerned in any other
business or occupation, or become a director, officer, agent or employee of any
other entity.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 4


16.      CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION

(a)      NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

         As DRAXIS' Executive Director Communications and Investor Relations,
you acknowledge that you are creating, having access to, and require knowledge
of confidential and commercially valuable information of the Company, the
unauthorized use or disclosure of which could cause the Company serious and
irreparable damage.

         (1) "Confidential Information" means all information, and all documents
and other tangible things recording any such information, relating to or useful
in connection with the business of the Company, whether or not a trade secret
within the meaning of the applicable law, which at the time or times concerned
is not generally known to Competitors (as defined below) and which has been or
is from time to time disclosed to or developed by you as a result of your
employment with DRAXIS. Confidential Information includes, but is not limited
to, the following information of the Company:

                (i) new products;
               (ii) marketing strategies and plans;
              (iii) development strategies and plans;
               (iv) manufacturing processes and technologies;
                (v) research in progress and unpublished manuals or know how;
               (vi) regulatory filings;
              (vii) identity of and relationship with licensees, licensors or
                    suppliers;
             (viii) finances, financial information, financial management
                    systems;
               (ix) market research;
                (x) market experience with products;
               (xi) customer lists;
              (xii) compensation and benefits provided to employees;
             (xiii) any other research, information or documents which you are
                    told or reasonably ought to know that the Company regards as
                    proprietary or confidential; and
              (xiv) any legal advice provided to DRAXIS, its offcers,
                    directors, employees or agents during the course or your
                    employment and any details involving the DRAXIS position
                    with respect to any litigation matter or prospective
                    litigation matter which exists at the time of termination.

         (2) You agree that you shall hold all Confidential Information in the
strictest confidence, as a fiduciary. Without limiting such obligation, you
shall use Confidential Information only at times and places designated by the
Company in furtherance of the business of the Company. You shall not, except
where the Company otherwise provides its prior written consent or where required
by law, directly or indirectly disclose to any Person any Confidential
Information, directly or indirectly sell, give, loan or otherwise transfer any
Confidential Information or copy thereof to any Person, publish, lecture on or
display any Confidential Information to any Person or use Confidential
Information for your own benefit or the benefit of any other Person.

         (3) Your obligations under this Section shall remain in effect with
respect to each item of Confidential Information until the date upon which such
Confidential Information has been publicly disclosed in a manner properly
authorized by the Company or otherwise has become known to Competitors without
any breach of this Section by you.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 5


         (4) For purposes of this Agreement, "Competitor" shall mean any Person
which engages or is preparing to engage, in whole or in part, in the design,
development, manufacture, marketing or sale of any products or services which
compete directly with a product or service which, during the 12 months prior to
the termination of this Agreement and your employment hereunder for any reason,
the Company marketed or at the time of termination of this Agreement and your
employment hereunder, is then preparing to market.

         (5) For purpose of this Agreement, "Person" shall include individuals,
partnerships, associations, trusts, unincorporated organizations and
corporations.

(b)      NON-SOLICITATION AND NON-COMPETITION

         (1) You acknowledge that the pharmaceutical and over-the-counter drug
industries are highly competitive businesses. You are a key executive of DRAXIS,
and as a result of your senior position, you confirm that you have acquired
extensive background in and knowledge of the Company's business and the
pharmaceutical and over-the-counter drug industries in which the Company
operates. You further acknowledge that the Company develops and markets its
products on a North American basis. Accordingly, you agree that in the course of
your employment with DRAXIS, and thereafter for a period of one year (or if such
period is held to be excessive by a court of competent jurisdiction then for a
period of six months) you shall not, without the prior written authorization of
the Chief Executive Officer of DRAXIS whether as principal, as agent, or as an
employee of, or in partnership, or association with any other Person, in any
manner whatsoever directly or indirectly:

              (i)               become employed by or associated or affiliated
                                with any Competitor of the Company in North
                                America in a function dealing with a product or
                                service, which during the twelve-month period
                                immediately prior to the termination of this
                                Agreement and your employment hereunder, for any
                                reason, competed directly with a product or
                                service of the Company;
              (ii)              seek to employ or encourage others to employ or
                                otherwise engage employees, agents or
                                subcontractors of the Company (who are
                                employees, agents or subcontractors on the date
                                this Agreement terminated) or seek to in any way
                                disrupt their business relationship with the
                                Company;
              (iii)             obtain by any means whatsoever the business of
                                any Person who at the time of the termination of
                                this Agreement and your employment hereunder,
                                was a customer of the Company, if to obtain such
                                business may result in a reduction of that
                                Person's business with the Company;
              (iv)              approach any Person who at the time of the
                                termination of this Agreement and your
                                employment hereunder was a customer of the
                                Company with the intention of soliciting or
                                enticing the business of that Person away from
                                the Company.
(c)      REASONABLENESS

         You agree that the obligations set out in Sections 16(a) and (b)
together with your other obligations under this Agreement are reasonably
necessary for the protection of the Company's proprietary and business interests
and you expressly agree that:

              (i)               the scope of each of the covenants set out in
                                Sections 16(a) and (b) above are in all
                                respects, and in particular, in respect of area,
                                time and subject matter, necessary and
                                reasonable because the Company is marketing its
                                products on a North American basis;


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 6


              (ii)              given your general knowledge and experience, the
                                obligations contained in this Agreement will not
                                preclude you from becoming gainfully employed
                                with other employers who are not Competitors
                                following termination of this Agreement and your
                                employment hereunder for any reason;
              (iii)             your agreement to Sections 16(a) and (b) is a
                                key incentive to DRAXIS formalizing the current
                                terms and conditions of your employment.
(d)      BREACH OF AGREEMENT

         You also recognize that any breach of the terms and conditions of this
Agreement by you will result in material damage to the Company, although it may
be difficult for DRAXIS to establish the monetary value of such damage. You
therefore agree that DRAXIS shall be entitled to injunctive relief, in addition
to any other remedies available to it, in a court of appropriate jurisdiction in
the event of any breach or threatened breach by you of any of the provisions of
this Agreement.

17.      TERMINATION OF EMPLOYMENT

(a)      TERMINATION BY DRAXIS FOR CAUSE

         DRAXIS may terminate this Agreement and your employment hereunder at
any time for cause without notice and without payment of any kind of
compensation either by way of anticipated earnings or damages of any kind.

(b)      TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE

         DRAXIS may terminate this Agreement and your employment hereunder by
providing to you one year's actual notice of termination. At its sole
discretion, DRAXIS may provide to you a shorter period of notice of termination,
in which case, the payments referred to in Section 17(c) shall be applicable,
but such payments as may be required by Sections 17(c)(1) and (4) shall be
reduced by the notice provided, so that the total notice and compensation in
lieu of notice provided to you shall be equivalent to one year from the date you
are advised of the termination.

(c)      TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE

         DRAXIS may terminate this Agreement and your employment hereunder, in
its sole discretion, without notice and without cause, effective immediately
upon the date you are advised of the termination.

         Except as outlined in Section 17(b), if your employment is terminated
without cause pursuant to this Section, DRAXIS shall:

               1)   Pay to you a severance allowance equivalent to one year of
                    your then current Base Salary; in a lump sum within two
                    weeks following the date of such termination.
               2)   Pay to you all outstanding vacation pay and any earned but
                    unpaid salary up to the date of such termination within two
                    weeks of the date of termination.
               3)   Reimburse you for any business expenses incurred by you up
                    to and including the date of such termination following
                    provision by you of applicable receipts.
               4)   Ensure it has complied with all statutory obligations
                    imposed by the EMPLOYMENT STANDARDS ACT.

         The payment referred to in paragraph 1, above, shall be guaranteed and
shall not be subject to set off or deduction as a result of your obtaining
alternate employment following such termination or otherwise mitigating any
damages arising from such termination. Further, the payment referred to in
paragraph 1,


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 7


above, is inclusive of all statutory payments, including statutory termination
and severance, which may be owed to you.

         The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.

         Upon termination of your employment in accordance with this Section
17(c), you shall return to DRAXIS all stock options, Employee Participation
Shares and other securities which have not vested or accrued during your
employment with DRAXIS.

(d)      TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL

         (1) In accordance with paragraph 17(d)(2) below, if there is a Change
of Control (as hereinafter defined) you shall be entitled to the following:

               A.   the amounts of any unpaid salary earned up to and including
                    date of termination;

               B.   any unpaid vacation pay earned up to and including date of
                    termination;

               C.   a lump sum amount, equal to: (A) two times your then current
                    Base Salary in effect immediately prior to the date of the
                    Change of Control; and (B) two times the amount paid to you,
                    for the preceding calendar year immediately prior to the
                    date of the Change of Control, as a discretionary bonus;

               D.   any additional statutory obligations imposed by the
                    EMPLOYMENT STANDARDS ACT;

               E.   the right to retain and exercise all stock options, Employee
                    Participation Shares and other securities which have vested
                    or accrued during your employment with DRAXIS and which will
                    accrue or vest during the two year period immediately
                    following the Change of Control, as if you were employed by
                    the successor employer for that two year period.

         The payment referred to in paragraph 17(d)(1)(C), above, shall be
guaranteed and shall not be subject to set off or deduction as a result of your
obtaining alternate employment following termination or otherwise mitigating any
damages arising from termination. Further, notwithstanding 17(d)(1)(D) above,
the payment referred to in 17(d)(1)(C) above, is inclusive of all statutory
payments, including statutory termination and severance, which may be owed to
you following termination.

         The amounts paid to you pursuant to this paragraph shall be subject to
all required deductions.

         Upon termination of your employment in accordance with this Section
17(d), you shall return to DRAXIS all stock options, Employee Participation
Shares and other securities which have not vested or accrued during your
employment with DRAXIS, and will not vest or accrue during the two year period
following termination of this Agreement.

         (2) These payments and entitlements outlined in 17(d)(1) shall become
due and payable if, and only if:

               A.   there has been a Change of Control; and

               B.   within 12 months following any Change of Control:

                    (i)  your employment is terminated without cause by DRAXIS
                         or by any successor employer to DRAXIS, as the case may
                         be; or

                    (ii) by its conduct as described below, DRAXIS or any
                         successor employer to DRAXIS, as the case may be,
                         constructively terminates your employment by:


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 8


                         o    relocating the position and/or location of your
                              principal office more than 20 kilometers from the
                              location of your office on the date immediately
                              prior to the Change of Control, without your
                              consent; or

                         o    materially reducing your title, reporting
                              relationship, responsibilities or authority
                              without your consent; or

                         o    reducing the salary paid to you by the successor
                              employer or terminating or materially reducing the
                              value of your benefit programs, including, but not
                              limited to, life insurance benefits, accidental
                              death and dismemberment benefits, long term
                              disability benefits, extended health coverage,
                              dental benefit, which are referred to in Section 3
                              above;

               C.   and, you elect in writing to receive the payments outlined
                    in Section 17(d)(1).

         (3) For purposes of this Agreement "Change in Control" means a
transaction or series of transactions whereby directly or indirectly;

               A.   any Person or combination of Persons acting jointly and in
                    concert (other than you or a corporation controlled directly
                    or indirectly by you) acquires a sufficient number of
                    securities of DRAXIS to materially affect the control of
                    DRAXIS as defined below. For the purposes of this Agreement,
                    a Person or combination of Persons acting jointly and in
                    concert, holding shares or other securities in excess of the
                    number which, directly or following the conversion or
                    exercise thereof, would entitle the holders thereof to cast
                    20% or more of the votes attached to all shares of DRAXIS
                    which may be cast to elect directors of DRAXIS, shall be
                    deemed to affect materially the control of DRAXIS, in which
                    case the Change in Control shall be deemed to occur on the
                    date that is the later of the date that the security
                    representing one more than that required to cast 20% of the
                    votes attached to all shares of DRAXIS which may be cast to
                    elect directors of DRAXIS is acquired or the date on which
                    the Persons acting jointly and in concert agree to so act;

               B.   DRAXIS shall consolidate or merge with or into, amalgamate
                    with, or enter into a statutory arrangement or business
                    combination with, any other Person (other than a corporation
                    controlled directly or indirectly by you) and, in connection
                    therewith, all or part of the outstanding shares of DRAXIS
                    which have voting rights attached thereto shall be changed
                    in any way, reclassified or converted into, exchanged or
                    otherwise acquired for shares or other securities of DRAXIS
                    or any other Person or for cash or any other property and
                    control of DRAXIS is thereby materially affected, as defined
                    above, in which case the Change in Control shall be deemed
                    to occur on the date of closing of the consolidation,
                    merger, amalgamation, statutory arrangement or business
                    combination, as the case may be; or

               C.   DRAXIS shall sell or otherwise transfer, including by way of
                    the grant of a leasehold interest (or one or more Affiliates
                    of DRAXIS shall sell or otherwise transfer, including
                    without limitation by way of the grant of a leasehold
                    interest) property or assets aggregating more than 50% of
                    the consolidated assets (measured by either book value or
                    fair market value based on the most recent audited financial
                    statements) of DRAXIS and its Affiliates as at the end of
                    the most recently completed financial year to any


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                   Page 9


                    other Person or Persons, in which case the Change in Control
                    shall be deemed to occur on the date of transfer of the
                    assets representing one dollar more than 50% of the
                    consolidated assets;

         other than a transaction or series of transactions which involves a
         sale of securities or assets of DRAXIS with which you are involved as a
         purchaser in any manner, whether directly or indirectly, and whether by
         way of participation in a corporation or partnership that is a
         purchaser or by provision of debt, equity or purchase leaseback
         financing (but excluding where your sole involvement with such a
         purchase is the ownership of an equity interest of less than 5% of the
         acquirer where the acquirer is a public company) and you and persons
         acting jointly and in concert with you hold securities of the acquirer
         which, directly, or following the conversion or exercise thereof, would
         entitle the holders thereof to cast 5% or more of the votes attached to
         all shares or other interests of the acquirer which may be cast to
         elect directors or the management of the acquirer

         DRAXIS shall use its reasonable best efforts to require any successor
(whether direct or indirect) to all or substantially all of its shares and/or
assets to expressly agree in writing to assume and to perform this Agreement in
the same manner that DRAXIS would have been required to perform it if no such
succession had occurred. If DRAXIS fails to obtain any such successor's express
written agreement prior to the effective date of such succession, such failure
shall be deemed to be a termination of your employment by DRAXIS and such
termination shall be deemed to have occurred on the date immediately prior to
the Change of Control date. In such event, at the discretion of DRAXIS, Section
17(b) or (c) will not be applicable, and DRAXIS shall pay to you those amounts
outlined in Section 17(d)(1) above and Section 17(h) shall be applicable.

(e)      TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY

         If, as a result of incapacity due to physical or mental illness, you
are unable to render services of substantially the kind and nature, and
substantially to the extent required to be rendered in accordance with this
Agreement, and if such incapacity is expected to continue for a period of at
least twelve consecutive months from the date such incapacity commenced
("Absence Date") this Agreement may be deemed to be frustrated. Your employment
hereunder shall cease to be effective on the tenth day after written notice of
cessation of employment ("Notice of Cessation") to you, provided that prior to
such cessation DRAXIS has been furnished with the written certification of a
qualified medical doctor designated by DRAXIS and you jointly which states that
you are and are expected to continue to be for at least twelve consecutive
months from the Absence Date, unable to render such services by reason of such
incapacity and the date upon which such incapacity commenced. If DRAXIS and you
are unable to agree on the designation of a qualified medical doctor to make
such determination, then each party shall designate a medical doctor who,
together, shall agree upon a third qualified medical doctor to make such
determination. The decision of the third medical doctor shall be binding on
DRAXIS and you. You consent to submit to such examination as may be required by
any such medical doctor or doctors.

         If your employment ceases pursuant to this Section, you shall be
entitled to receive a total amount equivalent to one year of your then current
Base Salary, commencing on the date upon which the Notice of Cessation is
delivered and payable in 24 regular payments equivalent to your regular
semi-monthly Base Salary on the regular DRAXIS pay days. If you are in receipt
of disability benefits payable pursuant to the benefit plans described above,
then each semi-monthly payment payable by DRAXIS shall be reduced by an amount
equivalent to the disability benefits payment received during that pay period.
Notwithstanding the cessation of your employment pursuant to this Section, you
shall be entitled to retain and exercise all stock options and Employee
Participation Shares granted to you during your employment with DRAXIS.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                  Page 10


(f)      DEATH

         In the event that you should die during the term of this Agreement,
your employment shall automatically terminate. All salary, vacation pay and any
bonus payments earned to date of death but unpaid will be paid to your estate,
however, no other payment of any compensation either by way of anticipated
earnings or damages of any kind shall be paid and Section 17(h) shall be
applicable.

(g)      RESIGNATION AND RETIREMENT

         You shall provide DRAXIS with three months' notice, in writing, of your
resignation or your retirement from DRAXIS. Unless the Board of Directors of
DRAXIS otherwise determines, you shall return to DRAXIS all stock options and
Employee Participation Shares granted to you during your employment with DRAXIS
which become exercisable after the date you cease to be an employee of DRAXIS or
any of its Affiliates.

(h)      NO FURTHER NOTICE OR COMPENSATION

         Upon termination of your employment under this Agreement, you shall not
be entitled to any further grants of stock options or Employee Participation
Shares nor shall you be entitled to any further participation in any other
incentive plan of DRAXIS other than as specifically set forth in Sections
17(d)(E), 17(e) and this 17(h). For further clarity, in the event of termination
of this Agreement and your employment hereunder for any reason, the provisions
of Section 17(d)(E) and 17(e), and the terms provided in the event of
termination under the DRAXIS Stock Option Plan, and Employee Participation Share
Purchase Plan shall apply. For all purposes, "termination of your employment"
and "termination date" shall be the final day of employment with DRAXIS, and
shall not be deemed to include any period during which you may be entitled to
statutory notice, statutory termination pay or any contractual or common law
notice period and in particular, shall not be deemed to include the notice
period identified in Sections 17(c) (1) or 17(d) (1) (C).

18.      FAIR AND REASONABLE

         The parties confirm that the notice requirements and pay in lieu of
notice provisions set out above in Section 17 are fair and reasonable and that
no further notice or payments of any kind are owed or required. The parties
agree that upon any termination of this Agreement by DRAXIS or upon any
termination of this Agreement by you, that you shall have no action, cause of
action, claim or demand, either statutory or at common law, against DRAXIS or
any other Person as a consequence of such termination.

19.      RETURN OF PROPERTY

         In the event your employment with DRAXIS is terminated for any reason,
including resignation or retirement, you will immediately return all DRAXIS
property in your possession or under your control.

20.      PROVISIONS OPERATING FOLLOWING TERMINATION

         Notwithstanding any termination of your employment with or without
cause, Sections 16, 17, 18, 21 and any provision of this Agreement necessary to
give it efficacy shall continue in full force and effect following such
termination.

21.      ACKNOWLEDGEMENT

         You acknowledge that DRAXIS shall not, for any purpose, including in
the event of a subsequent termination, be required to recognize or take into
account any prior service with your previous employers.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                  Page 11


22.      SEVERABILITY

         If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof shall continue in full force and
effect.

23.      NOTICE

         Any notice to be given in connection with this Agreement shall be given
in writing and may be given by personal delivery or by registered mail addressed
to the recipient as follows:

         To:      Jerry Ormiston
                  28 Eagle Road
                  Toronto, Ontario
                  M8Z 4H5

         To:      DRAXIS Health Inc.
                  6870 Goreway Drive, 2nd Floor
                  Mississauga, Ontario
                  L4V 1P1
                  Attention:  President and Chief Executive Officer

or such other address or individual as may be designated by notice by either
party to the other. Any notice given by personal delivery or by fax shall be
deemed to have been given on the day of actual delivery and, if made or given by
registered mail on the third day, other than a Saturday, Sunday or a statutory
holiday in Ontario, following the deposit thereof in the mail.

24.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario.

25.      BENEFIT OF AGREEMENT

         This Agreement shall enure to the benefit of and be binding upon your
heirs, executors, administrators and legal personal representatives and the
successors and assigns of DRAXIS respectively.

26.      ENTIRE AGREEMENT

         This Agreement and the DRAXIS Code of Ethics constitute the entire
agreement between the parties with respect to your terms and conditions of
employment and cancel and supersede any prior understandings and agreements
between the parties to this Agreement. There are no representations, warranties,
forms, conditions, undertakings or collateral agreements expressed, implied or
statutory between the parties other than as expressly set forth in this
Agreement and the DRAXIS Code of Ethics. You waive any right to assert a claim
in tort based on any pre-contractual representations, negligent, or otherwise,
made by DRAXIS.


<PAGE>


Mr. Jerry Ormiston                                                  May 14, 2001
PERSONAL & CONFIDENTIAL                                                  Page 12


         To acknowledge that the terms of employment as expressed in this
Agreement are acceptable to you, please execute the enclosed copy of this letter
as indicated below and return it to me at your earliest opportunity.

                                       Yours truly,

                                       DRAXIS Health Inc.


                                       /s/ Martin Barkin


                            Per:
                                       Martin Barkin, M.D., F.R.C.S.C.
                                       President and Chief Executive Officer



         I accept the above-noted terms of employment with DRAXIS as Executive
Director Communications and Investor Relations, and in consideration of my
continued employment with DRAXIS and the payment of $5.00, the sufficiency and
receipt of which is acknowledged, I agree to comply with and be bound by the
terms of employment outlined in this Agreement.

         Dated at Mississauga, the 22nd day of May, 2001.



/s/ A. Joyce                              /s/  Jerry Ormiston
------------------------------------      -----------------------------------
Witness                                   Jerry Ormiston