Document:

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                                                                    Exhibit 4.23

                                                               MR. BRIAN M. KING
                                  [DRAXIS LOGO]            CHAIRMAN OF THE BOARD

PRIVATE AND CONFIDENTIAL

HAND DELIVERED

September 24, 2003

Dr. Martin Barkin
54 Old Forest Hill Road
Toronto, ON M5P 2P9

Dear Dr. Barkin:

This letter is further to our agreement that Draxis Health Inc. ("Draxis") will
establish for your benefit a Retirement Compensation Allowance ("RCA").

We confirm that the RCA, which has been attached hereto as Schedule "A", is in
the total amount of $1.4 million and will be paid as follows:

        (1)     Payment of $600,000.00 in August, 2003; and

        (2)     The remaining $800,000.00 to be paid in quarterly instalments
                over the next eight (8) fiscal quarters at the beginning of each
                quarter commencing with the fourth quarter of 2003 (the
                "Commencement Date"), and ending with fourth quarter of 2005
                (the "Completion Date").

        (hereinafter the "RCA Payments")

We are writing to confirm that in consideration for the grant of the RCA, and
the RCA Payments, you agree that your Employment Agreement dated April 15, 1999,
as amended by letter dated June 14, 2000, (the "Agreement") shall be interpreted
in accordance with the following provisions:

TERMINATION BY DRAXIS FOR CAUSE - SECTION 16(a)

All RCA Payments shall cease effective immediately upon termination for cause.

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TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE - SECTION 16(b)

The RCA Payments shall qualify as notice pursuant to Section 16(b) of the
Agreement for the purposes of calculating notice or pay in lieu thereof.

TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE - SECTION 16(c)

(l)     The severance payments set out in Section 16 (c) of the Agreement (the
        "Severance Payments") shall be reduced by the RCA Payments. In the event
        that you are terminated in accordance with Section 16(c) of the
        Agreement prior to the Completion Date, the Severance Payments shall be
        reduced by the amount of the RCA payments made as at the date of
        termination.

(2)     Following the Completion Date all payments pursuant to the RCA shall
        cease and you acknowledge that you shall have no further entitlement for
        RCA Payments or Severance Payments thereafter.

(3)     The Severance Payments and RCA Payments constitute full and final
        payment of all monies payable pursuant to Section 16(c) of the
        Agreement, and are inclusive of all statutory payments which may be
        owing to you upon termination, including but not limited to any monies
        or payments for termination pay and severance under the provisions of
        the Ontario EMPLOYMENT STANDARDS ACT (the "Act"). You agree that upon
        termination in accordance with the Agreement, you shall have no right or
        claim to any further compensation, including but not limited to any
        claim pursuant to the Act for termination pay and severance pay.

(4)     You agree that the RCA Payments constitute appropriate consideration for
        the amendments to the Agreement set out herein, and further, that such
        payments constitute a greater right or benefit than the payments which
        you would have received upon termination for termination pay and
        severance pay pursuant to the Act.

TERMINATION PAYMENT FOLLOWING CHANGE OF CONTROL - SECTION 16(d)

Any payments pursuant to the Change of Control provisions of the Agreement shall
be reduced by the RCA Payments. For clarity, the RCA Payments made as at and/or
subsequent to the date of termination shall be deducted from the lump sum amount
payable pursuant to 16(d)(1)(C).

TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY - 16(3)(e)

In the event that you qualify for payments pursuant to Section 16(3)(e) of the
Agreement, any monies deemed payable shall be reduced by the RCA Payments.

DEATH - 16(3)(f)

In the event that you should die during the term of the Agreement, your estate
shall be entitled to the benefit of any unpaid RCA Payments.

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Except as set out herein, the Agreement shall remain in full force and effect.

Please confirm your agreement with the terms and conditions of this letter by
signing below and returning the original to my attention.

Yours very truly,

DRAXIS HEALTH INC.

/s/ Brian M. King

Per:     Mr. Brian M. King
         Chairman of the Board

cc:      Doug Parker
         Jack Carter

I have read and understand and, having had the opportunity to seek independent
legal advice, I accept the terms outlined above in this letter agreement.

                                        /s/ Martin Barkin
-----------------------------------     ----------------------------------------
Date                                    Dr. Martin Barkin

                                        3
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                       RETIREMENT COMPENSATION ARRANGEMENT
                                 TRUST AGREEMENT

This Agreement made as of this 1st day of July 2003.

Between:  DRAXIS HEALTH INC., a company incorporated under the laws of the
          Province of Ontario, having its head office in the Province of Ontario
          (hereinafter referred to as the "Company")

          -and-

          DR. MARTIN BARKIN, ROBERT BARKIN, and GORDON B. LANG, trustees of the
          Retirement Compensation Arrangement Trust for Dr. Martin Barkin of
          Draxis Health Inc. (the "Trust") in the province of Ontario
          (hereinafter referred to as the "Trustees").

A.      WHEREAS pursuant to the terms of a Retirement Compensation Arrangement
        (hereinafter called the "RCA") dated July 1st, 2003, the parties hereto
        agree to enter into a trust agreement whereby the Trustees agree to act
        as Trustees and to administer a trust in accordance with the terms and
        conditions of this Agreement;

B.      AND WHEREAS the Company has established a trust for the purposes of
        providing retirement benefits for some or all of its employees, known as
        the Retirement Compensation Arrangement Trust for Dr. Martin Barkin of
        Draxis Health Inc. from the Effective Date and has appointed the
        Trustees to administer the Trust as of the Effective Date;

C.      AND WHEREAS the Trustees have agreed to act as Trustees in accordance
        with the terms and conditions contained herein;

D.      AND WHEREAS contributions by the Company are made in connection with
        benefits that are to be or may be received or enjoyed by the Members
        (hereinafter referred to as the "Member") on, after or in contemplation
        of a substantial change in the services rendered by the Member, the
        retirement of the Member, the disability or death of the Member or the
        loss of office or employment of the Member;

E.      The RCA Plan Text requires the Company to pay contributions into trust
        to fund the plan benefits and the Company hereby agrees to transfer to
        the Trustees the sum of $600,000.00 as an initial contribution.

NOW THEREFORE that in consideration of the member continuing to provide faithful
service to the Company and the Company providing the RCA Plan to the Member and
such other good and valuable consideration and the sum of $10.00 now paid by
each party to each of the other

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parties (receipt and sufficiency of which is hereby acknowledged by each of the
parties), the parties hereto agree as follows:

1.      INTERPRETATION

1.1     DEFINITIONS. The following terms have the meanings given:

        "AGREEMENT" means this trust agreement as amended from time to time;

        "BENEFICIARY" means the beneficiaries referred to in Schedule "A";

        "EFFECTIVE DATE" means the date on which the Company provides funds to
        establish the Trust Fund to the Trustee;

        "INCOME TAX ACT" means the Income Tax Act of Canada, as amended from
        time to time;

        "MEMBER" means a person who is enrolled in the Plan by the Company under
        the Terms and Conditions set out in Schedule "A";

        "PLAN" means the Retirement Compensation Arrangement ("RCA") Plan as
        amended from time to time attached hereto as Schedule "A";

        "POWERS" shall be deemed to mean and include those things which the
        Trustees may, in their sole and absolute discretion, do or refrain from
        doing in the management, supervision or carrying out of this Trust and
        the doing or refraining from doing any act shall not violate any duty to
        the Members and any Beneficiaries of the Trust and such powers shall not
        be limited by any statutory limitations set out in the Ontario Trustee
        Act or any other relevant provincial legislation;

        "RCA" means a Retirement Compensation Arrangement within the meaning of
        the INCOME TAX ACT (CANADA);

        "TRUSTEES" means the individuals that from time to time act as the
        Trustees of the Trust Fund;

        "TRUST FUND" means the trust fund established pursuant to this
        Agreement.

1.2     NUMBER AND GENDER. Unless the context requires otherwise, words
        importing the singular include the plural and vice versa, and words
        importing gender include both genders.

1.3     HEADINGS. The headings in this Agreement are included solely for the
        ease of reference and are not to be used to interpret this Agreement.

                                        2
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2.      ESTABLISHMENT AND ACCEPTANCE OF TRUST

2.1     ESTABLISHMENT. In order to establish and settle a trust to fund Plan
        benefits, the Company will contribute $10.00 to the Trustees.

2.2     TRUST FUND. All contributions received by the Trustees in connection
        with the Plan, together with any earnings, profits, increments and
        accruals arising thereon, reduced by authorized payments shall
        constitute a Trust Fund which shall be held by the Trustees pursuant to
        the trust provisions settling the trust set out within this Agreement
        and dealt with in accordance with the enabling powers contained within
        this Agreement.

2.3     ACCEPTANCE. The Trustees hereby accept the trusts created by the terms
        of the Agreement and the powers set out within this Agreement and agree
        to hold, invest, distribute and administer the Trust Fund in accordance
        with this Agreement.

2.4     SUBJECT TO AGREEMENTS. The Trust Fund shall be held by the Trustees in
        trust for the Member subject to the terms and conditions contained
        herein and at no time shall any part of the Trust Fund be used for or
        diverted to purposes other than those consistent with the terms of this
        Agreement and the RCA.

3.      USE OF TRUST FUND

3.1     The Trust Fund shall be used solely for the purposes of paying amounts
        that are payable under the Plan and any taxes, expenses for
        administration and other amounts payable in respect of the Trust Fund.

4.      PAYMENTS FROM THE TRUST FUND

4.1     PAYMENTS OF BENEFITS. The Trustees shall make payments from the Trust
        Fund in accordance with the terms of the Plan.

4.2     WITHHOLDING. The Trustees shall withhold from any plan payments to be
        made to the Member pursuant to this Agreement any amount required by the
        Income Tax Act or any other governing statute to be withheld.

4.3     TAXES. The Trustees shall pay from the Trust Fund all taxes of whatever
        kind that may be levied or assessed under existing or future laws upon
        or in respect of the Trust Fund or any assets forming a part thereof.
        This paragraph also applies to any interest or penalty applicable in
        respect of any taxes.

4.4     SALE OF ASSETS. If the Trustees must sell assets in order to make a
        payment and have not been directed by the Company as to which assets are
        to be sold for this purpose, the Trustees may select the assets to be
        sold in the Trustees' sole discretion.

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5.      INVESTMENT OF TRUST FUND

5.1     INVESTMENT DIRECTIONS. The Company shall direct the Trustees in the
        investment of the Trust Fund and may, from time to time, delegate the
        power to direct the investments to one or more other persons, including
        the Trustees.

5.2     PERMISSIBLE INVESTMENTS. The Trustees may acquire any investments
        whatsoever, notwithstanding that the investments may not be authorized
        by law. For greater certainty, and without in any way limiting the
        foregoing, the Trustees may acquire interests in pooled funds,
        partnerships, life insurance policies, annuity contracts and loans of
        private companies including the Company.

6.      RETIREMENT COMPENSATION ARRANGEMENT

6.1     It is intended that the Plan and the Trust Fund be a retirement
        compensation arrangement for the purposes of the INCOME TAX ACT
        (CANADA).

7.      POWERS OF TRUSTEES

7.1     Without in any way limiting or derogating from the powers and
        authorities otherwise available to the Trustees, the Trustees have the
        following powers and authorities in the administration and investment of
        the Trust Fund, to be exercised in accordance with this Agreement:

        a)      PURCHASE OF PROPERTY. To invest the Trust Fund or any part
                thereof in such manner and in such loans, bonds, securities or
                other property (including securities issued by the Trustees or
                its affiliates or by the Company), and upon such terms as the
                Trustees shall consider advisable, without being restricted to a
                class of investments which the Trustees may be permitted by law
                to make.

        b)      SALE, EXCHANGE, CONVEYANCE AND TRANSFER OF PROPERTY. To sell,
                exchange, convey, transfer or otherwise dispose of any
                securities or other property held by it, upon such terms and for
                such consideration as the Trustees consider suitable.

        c)      EXERCISE OF OWNER'S RIGHTS. To vote upon any stocks, bonds or
                other securities; to give general or special proxies or powers
                of attorney with or without power of substitution; to exercise
                any conversion privileges, subscription rights, or other
                options, and to make any payments incidental thereto; to oppose,
                or consent to, or otherwise participate in corporate
                reorganizations or other changes affecting corporate securities;
                and generally to exercise any of the powers of an owner with
                respect to all stocks, bonds, securities or other property held
                as part of the Trust Fund.

        d)      REGISTRATION OF INVESTMENTS. To cause any securities or other
                property held or forming part of the Trust Fund to be registered
                in their own name as Trustees, or in the name of one or more of
                its nominees as Trustee(s), and to be represented by
                certificates which include securities of the same class and
                nature held for other accounts for which the Trustees act in a
                fiduciary capacity; to hold any securities

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                in bearer form; and to hold securities of an issuer utilizing a
                book-based central depository system for which certificates are
                not being issued, in which case the books and records of the
                Trustees shall at all times show such securities or the
                proportionate interest thereof that are part of the Trust Fund.

        e)      ACQUIRE LIFE INSURANCE. To apply for and purchase as an
                authorized investment of the Trust Fund life insurance on the
                life of any person including the Member.

        f)      INSURANCE. To accept as assignee for consideration or as a
                donation to the Trust Fund any life insurance policy or policies
                on the life of any person and/or benefits under any such policy
                or policies and to use and apply any portion of the Trust Fund
                in the payment or pre-payment of premiums upon or for the
                purpose of maintaining in force any such insurance, whether
                applied for and purchased by the Trustees or accepted by them as
                assignees or donees and any insurance so purchased by or donated
                to or otherwise acquired and held by the Trustees shall be
                deemed to be an authorized investment in a like manner so shall
                any payment or pre-payment of any premium thereon. The Trustees
                are specifically authorized to acquire universal life policies
                with some or all of the contributions to the Trust Fund.

        g)      BORROWING. To borrow or raise money for the purposes of the
                Trust on such terms and conditions as the Trustees consider
                appropriate, and to use the property of the Trust Fund to secure
                the repayment of the amount borrowed or raised with the purpose
                of such borrowing to ultimately benefit the Member and
                Beneficiary.

        h)      RETENTION OF PROPERTY ACQUIRED. To accept and retain any
                securities or other property received or acquired by them as
                Trustees, whether or not such securities or other property would
                normally be purchased as investments for the Trust Fund.

        i)      BANK ACCOUNTS. To open and operate an account with a bank, trust
                company or securities brokerage firm and to retain cash in the
                account. Any cash deposited with the Trustees or an affiliate
                shall be credited with interest at the usual rate for such
                deposits (without any liability to account for any profit
                resulting from the use of the cash while on deposit).

        j)      EXECUTION OF INSTRUMENTS. To make, execute, acknowledge and
                deliver all documents of transfer and conveyance and all other
                instruments that may be necessary or appropriate to carry out
                the Trustees' powers.

        k)      TAX ELECTIONS. To make, or refrain from making, any election,
                determination, designation, allocation or apportionment that is
                required or permitted by any taxing statute. This power shall be
                exercised in accordance with the direction of the Member and, in
                the absence of such direction, in the Trustees' absolute
                discretion.

        l)      SETTLEMENT OF CLAIMS AND DEBTS. To settle, compromise, or submit
                to arbitration any claims, debts or damages due to owing to or
                from the Trust Fund; to

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                commence or defend suits or legal or administrative proceedings;
                and to represent the Trust Fund in all suits and legal and
                administrative proceedings.

        m)      EMPLOYMENT OF AGENTS AND OTHERS. To retain suitable agents,
                lawyers (who may be counsel for the Company), accountants,
                actuaries and other competent and qualified persons for the
                purpose of seeking professional advice of issues and matters
                pertaining to the Trust Fund, the Plan, tax matters and any and
                all other issues that may or will impact upon the Plan, the
                Member or Beneficiary.

        n)      POWER TO COMMINGLE. To consolidate the Trust Fund where there
                are a number of employees covered as Members under the Plan, for
                the purposes of investment, or any part thereof, with any other
                trust funds for which the Trustees are trustee into a single
                common fund, and to divide the common fund into units or
                proportionate interests that are held by the trust funds for
                each respective Member.

        o)      NON-ARM'S LENGTH TRANSACTIONS. To enter into a transaction with
                the Trustees (acting in any other capacity), a Member or
                Beneficiary of the Trust Fund or any other non-arm's length
                person, if the Trustees are permitted to enter into the
                transaction with such a non-arm's length person.

        p)      POWER TO DO ANY NECESSARY ACT. To do all such acts, take all
                such proceedings, and exercise all such rights and privileges,
                not specifically mentioned, as the Trustees consider necessary
                to administer the Trust Fund.

8.      ACCOUNTS AND RECORDS

8.1     MAINTENANCE OF ACCOUNTS. The Trustees shall prepare and maintain
        accurate and detailed accounts of all investments and transactions in
        respect of the Trust Fund as set out herein. Within ninety (90) days
        following the end of each calendar year and within ninety (90) days
        after the removal, replacement or resignation of a Trustee, the Trustees
        shall file with the Company a statement setting forth all investments
        and cash transactions effected by it during such calendar year or during
        the period from the close of the last calendar year to the date of such
        removal, replacement or resignation, in respect of the Trust Fund.

8.2     INSPECTION OF RECORDS. The accounts and records of the Trust Fund will
        be open for inspection and audit upon written notice to the Trustee by
        any person specified by a Member or Beneficiary. The Trustee shall
        respond to such notice within ninety (90) days of receiving the request
        in writing.

9.      PROVISION OF INFORMATION

9.1     The Company shall provide the Trustees with a copy of the RCA Plan Text
        and of each amendment to that text, and with any other information
        required by the Trustees to fulfill their responsibilities under this
        Agreement.

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10.     RESPONSIBILITIES AND LIMITATIONS

10.1    ADEQUACY OF THE TRUST FUND. The Trustees have no responsibility to
        ensure the adequacy of the Trust Fund to make payments under the Plan.

10.2    LOSS TO THE TRUST FUND. The Trustees shall not be liable for the making,
        retention or sale of any investment nor for any loss to or diminution of
        the Trust Fund, unless due to the Trustees' own bad faith, reckless
        disregard of duties, willful default or misconduct ("Fault").

10.3    RELIANCE ON INFORMATION AND ADVICE. The Trustees shall not be liable for
        any act or omission in reliance on information provided to them or on
        the advice of suitable counsel and advisors except where the liability
        arises because of Fault on the part of the Trustees.

10.4    RELIANCE ON DESIGNATION. The Trustees are hereby empowered to rely upon
        the Member's Beneficiary Designation pursuant to the RCA Plan in
        Schedule "A".

10.5    DIRECTIONS. The Trustees shall not be liable for any act or omission in
        respect of any direction given in accordance with this Agreement except
        where the liability arises because of Fault on the part of the Trustees.

10.6    PROCEEDINGS. The Trustees are not required to institute, prosecute or
        defend any proceedings relating to the Trust Fund, or to exercise any
        other powers referred to in subparagraph 7.1(l), unless they have been
        first indemnified to their satisfaction against any expenses or
        liabilities which may incur as a result thereof.

10.7    COMPLIANCE WITH THE LAW. The Trustees shall comply with any law, order
        or regulation which requires the Trustees to take or refrain from taking
        any action under this Agreement.

10.8    CONFLICT OF INTEREST. The Trustees may do the following:

        a)      On their own behalf or on behalf of other accounts that they
                manage, deal with securities of the same class or nature as are
                held by the Trust Fund;

        b)      Use in other capacities knowledge gained in their capacity as
                Trustees of the Trust Fund; and;

        c)      Hold any office, position or employment with a corporation, and
                receive remuneration therefor.

10.9    PERSONS DEALING WITH TRUSTEES. A person dealing with the Trustees need
        not inquire into the decisions or authority of the Trustees or to see
        the application of any money, securities or any other property paid,
        delivered or lent to the Trustees.

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11.     TRUSTEES' COMPENSATION EXPENSES

11.1    AMOUNT OF COMPENSATION. The remuneration of the Trustees during the
        terms of this Agreement shall be paid by the Company and shall be set
        from time to time by the Company with the agreement of the Trustees and
        payable as set out in the Plan. The said sum shall be a global payment
        in respect of the duties and obligations of the Trustees under this
        Agreement, the Plan and under any other similar agreements between the
        Trustees and the Company.

11.2    PAYMENT FROM THE TRUST FUND. Subject to paragraph 11.3, the Trustees'
        compensation and all expenses incurred by the Trustees in the
        administration of the Trust Fund shall be paid from the Trust Fund.

11.3    PAYMENT BY COMPANY. If the Company and the member agree, the Company
        shall pay the Trustees' compensation and all expenses incurred by the
        Trustees in the administration of the Trust Fund, other than
        compensation and expenses relating to the custody and investment of the
        Trust Fund. The Trustees are entitled to payment from the Trust Fund for
        any compensation or expenses that remain unpaid for thirty (30) days.
        The Company shall reimburse the Trust Fund for any such amounts paid to
        the Trustees.

12.     RESIGNATION, REMOVAL, REPLACEMENT OF TRUSTEES

12.1    RESIGNATION BY A TRUSTEE. A Trustee may, terminate his or her duties and
        obligations by giving sixty (60) days notice in writing to the Company,
        in which event the Company shall immediately use its best efforts to
        appoint a new Trustee (which may be a trust company licensed to carry on
        the business of a trust company in Canada). The Trustees shall forthwith
        transfer the Trust Fund, together with all records, accounts, receipts
        and other documents in respect thereof, to such person and in such
        manner as the Company directs.

12.2    REMOVAL BY COMPANY. The Company may remove a Trustee at any time by
        giving sixty (60) days notice in writing to the Trustee and in such
        event shall appoint a new Trustee (which may be a trust company licensed
        to carry on the business of a trust company in Canada). After receiving
        such notice of removal, a Trustee shall forthwith transfer the Trust
        Fund, together with all records, accounts, receipts and other documents
        in respect thereof to such new Trustee, at the time and in the manner
        directed by the Company.

12.3    SUCCESSOR TRUSTEE. A new Trustee may be appointed by the Company as a
        successor Trustee and upon such appointment being made, the successor
        Trustee shall be bound by the terms of this trust Agreement including
        the same powers and duties in the Plan Text or any amended or similar
        version of this trust Agreement or the Plan Text. In that regard, the
        successor Trustee shall execute all the necessary documents to complete
        its appointment as successor Trustee.

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13.     AMENDMENT

13.1    This Agreement may be amended from time to time by an instrument in
        writing executed by the Company and the Trustees. No amendment may be
        made that conflicts with the terms of the RCA Plan and this Agreement.

14.     GENERAL

14.1    PAYMENTS TO MINORS AND INCOMPETENTS. If any person to whom a payment is
        to be made is a minor or is otherwise incompetent to receive the payment
        or to give a release for it, the payment may be made to the legal
        representative of the person. If there is no legal representative, the
        payment may be made in the manner determined by the Trustees.

14.2    SEVERABILITY. If any provision in this Agreement is found to be invalid
        or unenforceable, the remaining provisions shall not be affected, and
        this Agreement shall be construed as if the invalid or unenforceable
        provision were not in the Agreement.

14.3    DISPUTES. Should any difference of opinion at any time exist between the
        Trustees, the Company, the Member or Beneficiary in relation to the
        commission or omission of any acts, or otherwise, in the execution of
        the Trusts herein, the decision of the person holding the position of
        President of the Company at the time the dispute arose, or should he or
        she be unwilling or unable to render such decision, an arbitrator agreed
        upon by the parties shall be selected and the decision of the arbitrator
        shall be final and binding upon the parties. The Parties shall share
        equally the cost of the arbitrator.

15.     GOVERNING LAW

15.1    This Agreement shall be subject to and construed under the laws of the
        Province of Ontario.

16.     BINDING UPON HEIRS AND SUCCESSORS

16.1    This Agreement shall endure to the benefit of and be binding on the
        parties to this Agreement and their respective legal and personal
        representatives, successors and permitted assigns.

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IN WITNESS WHEREOF the Company and the Trustees have executed this Agreement as
of the date at the top of page 1.

SIGNED IN THE PRESENCE OF

                                        /s/ Douglas M. Parker
------------------------------------    ----------------------------------------
Witness                                 Per:  Douglas M. Parker, General Counsel
                                        I have the authority to bind the Company

                                        /s/ Martin Barkin
------------------------------------    ----------------------------------------
Witness                                 Per: Dr. Martin Barkin
                                        I have the authority to bind the Trust

                                        /s/ Robert Barkin
------------------------------------    ----------------------------------------
Witness                                 Per: Robert Barkin
                                        I have the authority to bind the Trust

                                        /s/ Gordon B. Lang
------------------------------------    ----------------- ----------------------
Witness                                 Per: Gordon B. Lang
                                        I have the authority to bind the Trust

                                       10
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                                   SCHEDULE A

                 RETIREMENT COMPENSATION ARRANGEMENT (RCA) PLAN

                              FOR DR. MARTIN BARKIN

                              OF DRAXIS HEALTH INC.

Effective Date:   July 1, 2003

Signed on August 28th, 2003 at City of Toronto, Canada

/s/ Douglas M. Parker
----------------------------------------
Douglas M. Parker

General Counsel & SECRETARY
----------------------------------------
Title

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TABLE OF CONTENTS

<Table>
<Caption>
                                                                            PAGE
<S>                                                                          <C>
1.   DEFINITIONS..............................................................1

2.   ELIGIBILITY AND ENROLMENT................................................5

3.   CONTRIBUTIONS............................................................6

4.   BENEFIT OPTIONS ON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL........7

5.   PLAN BENEFITS............................................................8

6.   BENEFITS ON DEATH OR DISABILITY PRIOR TO COMMENCEMENT OF ANNUITY.........9

7.   RIGHT TO CEASE CONTRIBUTIONS TO THE PLAN................................10

8.   FUNDING AND ADMINISTRATION OF THE PLAN..................................11

9.   MISCELLANEOUS PROVISIONS................................................12

10.  AMENDMENT OF THE PLAN...................................................13
</Table>

                                       -i-
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1.      DEFINITIONS

ACTUARY

means a Fellow of the Canadian Institute of Actuaries.

ANNIVERSARY DATE

means January 1st of each year following the Effective Date.

BENEFICIARY

means, if there is no Spouse, the person designated by a Member under the Plan
to receive benefits arising from the death of a Member. If the Member fails to
make a designation, any benefits will be paid to the Member's estate.

CHANGE OF CONTROL OF THE COMPANY

means the purchase by a third party of shares of the Company containing in
excess of 50% of the voting rights of shareholders.

COMPANY

means Draxis Health Inc.

CONTINUOUS

means, in relation to employment, membership or service, without regard to
periods of temporary suspension of the employment, membership or service of a
Member and without regard to periods of layoff from employment, not exceeding 26
consecutive weeks during such absence.

DISABILITY

means the continuous and complete inability of the Member to engage in any
gainful occupation or employment, whether with the Company or otherwise, for
which the Member is, or becomes, reasonably qualified by training, education or
experience. The Member must at all times be under the regular care of a legally
qualified doctor.

EARNINGS

means the base salary, bonus and taxable value of benefits of the Member.

INVESTMENT INCOME

means the investment income credited to a Member Account. The value of the
investment income shall be determined by the Company. Investment Income shall be
credited from the day

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a contribution is credited to the date the benefit is to be provided on death,
retirement, disability, withdrawal or the effective date of Canadian
non-residency of a Member or Change of Control or sale of the Company.

MEMBER

means a person who is enrolled in the Plan by the Company.

MEMBER ACCOUNT

means the contributions allocated under this Plan to the Account of a Member.
The Member Account will include accrued investment income.

NORMAL RETIREMENT DATE

means the first day of the month immediately following the Member's 70th
birthday. If the Member's birthday is the first day of a month, the Normal
Retirement Date is the Member's 70th birthday.

PLAN

means the Retirement Compensation Arrangement for Martin Barkin of Draxis Health
Inc. which is governed by subsection 248(1) of the Income Tax Act (Canada).

PLAN YEAR

means for the first Plan Year, the period beginning on the Effective Date to the
Anniversary Date. Subsequent Plan Years shall be 12 months commencing on the
Anniversary Date.

SALE OF COMPANY

means the sale of all voting shares of the Company to a third party.

SPOUSE

means, in relation to the Member, a person of the opposite sex

1.      who at the relevant time was married to the Member and not living
        separate or apart, or

2.      if there is no person to whom subclause 1 applies, a person of the
        opposite sex who is cohabitating with the Member or in a conjugal
        relationship for at least three years immediately preceding the relevant
        time and is presented as the consort of the Member in public.

                                        2
<Page>

TRUSTEES

means either a trust company or an insurance company licensed to transact life
insurance business in Canada, or

three or more individuals, at least three of whom reside in Canada and one of
whom must be independent to the extent that the individual is neither a
shareholder, partner or employee of the Company.

                                        3
<Page>

1.      CONSTRUCTION OF THE PLAN

1.1     GENERAL

        The Plan provides benefits to the Member which are intended to
        supplement his retirement income.

                                        4
<Page>

2.      ELIGIBILITY AND ENROLMENT

2.1     ELIGIBILITY

        Dr. Martin Barkin, a Senior Executive shall join the Plan when
        designated by the Company.

2.2     ENROLMENT

        To enroll as a Member of the Plan, an eligible employee must complete a
        Plan enrolment form.

2.3     INFORMATION

        The Company will provide the Member with a written explanation of the
        Plan.

                                        5
<Page>

3.      CONTRIBUTIONS

3.1     MEMBER CONTRIBUTIONS

        Members may contribute to this Plan on a voluntary basis subject to a
        Certificate signed by an Actuary.

3.2     COMPANY CONTRIBUTIONS

        Each Plan Year, the Company is required to allocate contributions on
        behalf of the Member, in such amounts, at such times, determined by the
        Company, subject to a Certificate signed by an Actuary.

                                        6
<Page>

4.      BENEFIT OPTIONS ON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

4.1     The Member must withdraw from the Plan if employment with the Company
        terminates before Normal Retirement Date.

4.2     The Member may elect to withdraw from the Plan if the Company undergoes
        a Change of Control. The Company will provide a statement of the
        Member's benefits to the Member upon termination of employment or Change
        of Control.

4.3     The Member will provide written confirmation of the benefit option
        chosen within 60 days of the receipt of the benefit statement.

4.4     The Company will provide funds in cash or in kind equal to the Member
        Account.

4.5     The Member may elect any one or a combination of the following options
        for the funds equal to the Member Account:

        1.      payment from the Plan of a single lump sum or equal annual
                installments of equivalent value over a period of up to 20 years

        2.      the purchase of a deferred or immediate annuity from a financial
                carrier licensed to provide life or other annuities.

                                        7
<Page>

5.      PLAN BENEFITS

5.1     RETIREMENT DATES

        1.      NORMAL RETIREMENT DATE

                The Member's lump sum, installment payments or normal retirement
                annuity shall begin on or after the Member's Normal Retirement
                Date.

        2.      EARLY RETIREMENT DATE

                The Member may elect to begin annuity benefits or any other form
                of benefit payment on the first day of any month.

        3.      POSTPONED RETIREMENT DATE

                a)      The Member should he remain in the service of the
                        Company after Normal Retirement Date may elect to
                        continue participation in the Plan.

                b)      The Member may elect to defer the annuity benefits past
                        Normal Retirement Date.

                c)      The Member should he be past Normal Retirement Date and
                        elects to begin payment of benefits must cease
                        participation in the Plan no later than the day
                        preceding the first payment of such benefits.

5.2     AMOUNT OF BENEFITS

        The amount of the Member's lump sum, installment payments or annuity
        will be determined by applying the value of the Vested Member Account to
        installment or annuity rates in effect at the date the benefit commences
        or the annuity is purchased.

5.3     NORMAL FORM OF BENEFIT

        The normal form of benefit is payable annually for 20 years during the
        lifetime of the Member, whom failing the Spouse of the Member. In the
        event neither the Member or Spouse survives the 20 year period, the
        commuted value of the remaining payments shall be payable to the
        Beneficiary of the Member.

5.4     TRANSFER OPTION

        The Member may elect to transfer the value of the Member Account as
        outlined in Section 4.5.

                                        8
<Page>

6.      BENEFITS ON DEATH OR DISABILITY PRIOR TO COMMENCEMENT OF ANNUITY

6.1     If the Member dies or becomes disabled before actual retirement date,
        the Company shall accelerate future Company Contributions to the Plan
        otherwise payable to December 2005 and a benefit equal to the value of
        the Member Account including such accelerated contributions at the date
        of death or disability shall be paid in a lump sum or in accordance with
        Article 6 to the Member or Beneficiary.

        On disability the benefit shall be paid to the Member.

        If the Member has a Spouse at the date of death, the Spouse will receive
        a death benefit representing the Member Account.

        If the Member does not have a Spouse at the date of death, the
        Beneficiary will receive a death benefit representing the Member
        Account.

6.2     If the Spouse is the Beneficiary, the Spouse may elect:

        1.      to receive the death benefit as a lump sum cash payment or in
                installment payments for up to 20 years

        2.      to purchase an immediate or deferred annuity with a financial
                carrier licensed to provide annuities. The annuity may be
                guaranteed for a maximum period equal to 15 years.

6.3     The Member and Spouse may jointly waive the Spouse's entitlement to the
        death benefit by filing the waiver.

6.4     The amount of annuity or installment payments, if applicable, will be
        determined by applying the value of the Member Account to the annuity or
        installment payment rates in effect on the date of the Member's death.

6.5     If the Beneficiary is an individual other than the Spouse, or the
        Member's estate, the Beneficiary shall receive the death benefit in a
        lump sum cash payment.

6.6     The Company shall provide a statement of the Member's death benefit upon
        receiving confirmation of the Member's death or disability.

6.7     THE DEATH OR DISABILITY BENEFIT SHALL be paid upon receipt of the
        Member's, Spouse's or Beneficiary's written direction.

                                        9
<Page>

7.      RIGHT TO CEASE CONTRIBUTIONS TO THE PLAN

7.1     The Company may, on giving written prior notice to the Member,
        permanently cease making contributions to the Plan at any time.

7.2     The Company will make all contributions required by the terms of the
        Plan up to the date of termination of the Plan.

7.3     The Company will provide the Member with a written statement of the
        benefits and options available to the Member.

                                       10
<Page>

8.      FUNDING AND ADMINISTRATION OF THE PLAN

8.1     ADMINISTRATION

        The Company has the final authority for all interpretations of the Plan
        provisions.

        The Company has adopted this Plan for the purpose of providing periodic
        retirement income to the Member, in respect of his service as an
        employee.

        The administrator of the Plan is the Company. The Company may delegate
        specific administrative functions and tasks to the Trustees or other
        parties.

8.2     FUNDING

        The Plan is financed by Company contributions with the exception of
        Member voluntary contributions.

8.3     INVESTMENTS OF THE FUND

        The Company shall establish an RCA Trust and the Trustees appointed by
        the Company to administer this Trust shall invest contributions made to
        the Plan at their sole discretion, subject to such investments being
        permitted under the terms of the Trust Deed.

8.4     ADMINISTRATION FEES

        All fees arising due to the administration of the Plan will be paid by
        the Company.

                                      11
<Page>

9.      MISCELLANEOUS PROVISIONS

9.1     BENEFICIARY

        The Member may appoint a Beneficiary or change the Beneficiary
        previously appointed at any time under the terms and conditions of the
        Plan.

        Beneficiary appointments made under the Plan are revocable unless the
        Member instructs otherwise in writing.

9.2     MARRIAGE BREAKDOWN

        If, as the result of the breakdown of the Member's marriage or other
        conjugal relationship, a benefit will be paid to the Spouse of the
        Member, as ordered by a written agreement, decree, order or judgement,
        the Member will provide a copy to the Company. The Spouse will receive a
        benefit not greater than 50% of the benefit to which the Member is
        entitled under the terms of the Plan. The remaining Member benefit will
        not be adjusted or replaced as a result of the marriage breakdown.

9.3     DISCLOSURE REQUIREMENTS

        1.      Any person entitled to benefits under the Plan, including the
                Member, Spouse or a duly authorized agent, may request to
                examine or receive a copy of any document relating to the Plan.
                The request must be made in writing to the administrator of the
                Plan.

        2.      The Company shall provide the Member with a written statement of
                Plan benefits at least annually. If the Member terminates
                employment with the Company, dies, becomes disabled, becomes a
                Non-Resident or retires, or the Company is sold or undergoes a
                Change of Control the Company shall provide the Member or
                Beneficiary with a written statement of the benefits and options
                available.

        3.      The Company shall provide the Member with a written explanation
                of any amendment to the Plan.

9.4     SURRENDER OR ASSIGNMENT

        Benefits payable under this Plan are not capable of assignment or
        alienation during the lifetime of the Member. Benefits payable under
        this Plan shall not be charged, anticipated or given as security.
        Assignment of benefits may occur to the extent outlined in Section 9.2,
        Marriage Breakdown. No right or interest in the benefits of the Member
        or personal representative, dependent or any other person, is capable of
        being assigned or otherwise alienated during the lifetime of the Member.

                                      12
<Page>

10.     AMENDMENT OF THE PLAN

10.1    The Company reserves the right to amend any provision of the Plan or to
        terminate the Plan. Any amendment will be signed by the Company.

                                       13<Page>

                                                                    Exhibit 4.24

                                                                  April 27, 2004

                                                         PERSONAL & CONFIDENTIAL

Mr. Danny Brazier
316 Lori Avenue
Stouffville, Ontario
L4A 6C2

       Since July 17, 1998, the date you executed your original employment
agreement (the "Original Agreement"), and April 15, 1999 the date you executed
your revised employment agreement (the "Revised Agreement") DRAXIS Health Inc.
("DRAXIS" or the "Corporation") has developed and expanded, commensurate with
the corporate growth and staffing changes, your duties and responsibilities. In
addition, there have been modifications to the terms of the Original Agreement
and Revised Agreement. Accordingly, both parties agree that it is beneficial to
formally confirm the current terms and conditions of your employment with
DRAXIS.

1.     EMPLOYMENT
       Since July 1, 2003, you shall and have been employed with DRAXIS as its
Senior Vice President Corporate Development and Strategic Planning, on the terms
and conditions contained in this Agreement. You will report to the Chief
Executive Officer, of DRAXIS ("CEO"). Without limiting the scope of your duties
and responsibilities as Senior Vice President Corporate Development and
Strategic Planning, your responsibilities will be to work with the CEO of DRAXIS
and the other business unit leaders on developing, reviewing, screening and
negotiating business opportunities at the corporate level and within the
operating divisions. You will seek out new opportunities for the accretive
growth of DRAXIS and its core businesses. In that capacity you will work closely
with the business unit leaders at Draximage Inc. and Draxis Pharma Inc. and/or
other business units DRAXIS may acquire or establish. You will act in all
instances as the CEO's direct representative to and in those divisions. You will
also be a member of DRAXIS's Executive Operations Committee ("EOC") and will be
expected to enter into a cooperative working relationship with the other members
of the EOC. In addition, you will perform any additional employment
responsibilities assigned to you by the CEO 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
January 1, 2004 a gross salary of $250,000.00 per annum ("Base Salary"), payable
semi-monthly, in arrears, in 24 equal installments of $10,416.66. Such salary
shall be subject to review in accordance with DRAXIS's regular administrative
practices of salary review applicable to the executive officers of DRAXIS. Any
salary increases shall be determined on merit on the recommendation of the CEO
of DRAXIS and approval of the Board of Directors of DRAXIS. The CEO of DRAXIS
will inform you of any increases in your salary in advance of the implementation
date.

       As an officer of the Corporation, 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") [hereinafter collectively
referred to as the "DRAXIS Group"].

<Page>

Mr. Danny Brazier                                                 April 27, 2004
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:
       -   major medical
       -   drug
       -   dental
       -   group life
       -   long term disability
       -   accidental death and dismemberment

       You will also be entitled to an amount equivalent to 5% of your Base
Salary in lieu of participation in DRAXIS's Retirement Savings Program.

4.     STOCK OPTION PLAN
       Subject to DRAXIS Board of Directors' approval, you will be eligible to
participate in the DRAXIS Stock Option Plan, copy thereof provided herewith as
Schedule "A", which DRAXIS shall, from time to time, make available to
employees, in accordance with the terms and conditions of said plan. As at the
date hereof, the following grants of stock options to you remain outstanding and
may be exercised by you in accordance with the terms and conditions pursuant to
which each grant was made and the terms of this Agreement:

<Table>
<Caption>
           NO. OF OPTIONS                PRICE                EXPIRY DATE
           --------------                -----                -----------
               <S>                      <C>                    <C>
                20,000                  $  2.50                Oct. 31/07
                30,000                  $  2.32                Dec. 31/07
               100,000                  $  2.36                July 14/13
</Table>

5.     DEFERRED SHARE UNIT PLAN
       You will be eligible to participate in DRAXIS's Deferred Share Unit Plan,
in accordance with the terms and conditions of that plan, a copy thereof
provided herewith as Schedule "B". 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.

6.     DISCRETIONARY BONUS
       The Board of Directors of DRAXIS, in its sole discretion, and upon
recommendation of the CEO of DRAXIS, based on the Bonus and Objectives Plan that
is in force for all senior executives of DRAXIS, 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 40% of your Base Salary or such
other amount as may be determined by the CEO of DRAXIS and the Board of
Directors of DRAXIS, in their sole discretion.

7.     MEMBERSHIPS AND PUBLICATIONS
       DRAXIS will pay all professional memberships, dues and levies deemed
necessary to the conduct of your position.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 3

8.     VACATION
       You shall be entitled to four weeks vacation per annum to be taken at a
time or times acceptable to the CEO of 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 CEO of DRAXIS.

9.     EXPENSES
       DRAXIS agrees that it shall reimburse you for Automobile mileage
allowance as permitted by Canada Customs and Revenue Agency, all other
reasonable traveling and other out-of-pocket expenses actually and properly
incurred in connection with your duties with DRAXIS and within the policies that
are enacted from time to time by DRAXIS with respect to executive expenses. For
all such expenses you agree you will furnish statements and vouchers as and when
required by DRAXIS.

       DRAXIS agrees to provide you with a mobile phone, a BlackBerry and a
portable laptop that will remain at all time the property of Draxis.

       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.

10.    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.

11.    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.

       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 also 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, save and except your involvement with Carr Brazier Group Inc. and
"Ultimate Essentials", which DHI hereby agrees you can continue.

       Furthermore, you specifically agree that you shall respect and comply
with by the DRAXIS's Disclosure and Insider Trading Policy, as amended from time
to time copy thereof provided herewith as Schedule "C" to form an integral part
of this Agreement, the DRAXIS's Code of Ethics and Business Conduct as amended
from time to time, copy thereof provided herewith as Schedule "D" to form an
integral part of this Agreement, and all and any relevant rules and legislation,
such as, without limiting the generality of the foregoing, the rules on Insider
Trading in the TSX COMPANY MANUAL, the ONTARIO SECURITIES ACT, the CANADIAN
BUSINESS CORPORATIONS ACT and QUEBEC SECURITIES ACT. You acknowledge that your
senior position with DRAXIS will deem you an insider of DRAXIS and therefore
subject to applicable mandated insider regulatory and company share trading
policies and restrictions.

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

       (a)     NON-DISCLOSURE OF CONFIDENTIAL INFORMATION

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 4

       As DRAXIS's Senior Vice President Corporate Development and Strategic
Planning, you acknowledge that you are creating, having access to, and require
knowledge of confidential and commercially valuable information of the DRAXIS
Group, the unauthorized use or disclosure of which could cause the DRAXIS Group
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 DRAXIS Group, 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 DRAXIS Group:

                 (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 DRAXIS
                         Group regards as proprietary or confidential; and
               (xiv)     any legal advice provided to the DRAXIS Group, its
                         officers, directors, employees or agents during the
                         course of your employment and any details involving the
                         DRAXIS Group's 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
DRAXIS Group in furtherance of the business of the DRAXIS Group. You shall not,
except where the DRAXIS Group 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 DRAXIS Group or otherwise has become known to Competitors
without any breach of this Section by you.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
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 DRAXIS Group 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 DRAXIS Group's business and the
pharmaceutical and over-the-counter drug industries in which the DRAXIS Group
operates. You further acknowledge that the DRAXIS Group develops and markets its
products on a North American basis, more particularly in Canada and in the
eastern part of the United States comprising the states of Connecticut, Florida,
Delaware, Georgia, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New
Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South
Carolina, Vermont, Virginia, and West Virginia [hereinafter referred to as the
"Territory"]. 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 CEO 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 DRAXIS Group in the Territory 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 DRAXIS Group;

                   (ii)  seek to employ or encourage others to employ or
                         otherwise engage employees, agents or subcontractors of
                         the DRAXIS Group (who are employees, agents or
                         subcontractors on the date this Agreement terminated)
                         or seek to in any way disrupt their business
                         relationship with the DRAXIS Group;

                  (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 DRAXIS Group, if to obtain such business may
                         result in a reduction of that Person's business with
                         the DRAXIS Group;

                   (iv)  approach any Person who at the time of the termination
                         of this Agreement and your employment hereunder was a
                         customer of the DRAXIS Group with the intention of
                         soliciting or enticing the business of that Person away
                         from the DRAXIS Group.

       (c)    REASONABLENESS
       You agree that the obligations set out in Sections 12(a) and (b) together
with your other obligations under this Agreement are reasonably necessary for
the protection of the DRAXIS Group's proprietary and business interests and you
expressly agree that:

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 6

                    (i)  the scope of each of the covenants set out in Sections
                         12(a) and (b) above are in all respects, and in
                         particular, in respect of Territory, time and subject
                         matter, necessary and reasonable because the DRAXIS
                         Group is marketing its products on a North American
                         basis;
                   (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 12(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 DRAXIS Group, although it
may be difficult for the DRAXIS Group to establish the monetary value of such
damage. You therefore agree that the DRAXIS Group 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.

13.    TERMINATION OF EMPLOYMENT

       If at the end of two years of service (which period shall commence as of
July 1, 2003), you determine, solely at your discretion, that the position of
Senior Vice President Corporate Development and Strategic Planning is not
satisfactory for you, during that window (which shall be deemed to be the period
between June 1, 2005 to June 30, 2005) it is agreed between the parties that
your termination payment shall be the sum of $390,000, less any required
deductions, which sum represents the termination payment DRAXIS would have paid
to you following the Shire Transaction.

       In addition, if your employment is terminated without cause during the
period commencing July 21, 2003 and ending July 21, 2005, your termination
payment shall be equal to two times your Base Salary at that date, less any
required deductions. In addition to said salary payment, DRAXIS shall pay you
the following amounts: (i) 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; (ii) 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; and (iii) ensure it has complied with all statutory
obligations imposed by the ONTARIO EMPLOYMENT STANDARDS ACT. This payment 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. In all other instances,
the following Termination Provisions shall prevail:

       (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. The amount of the
notice shall consist solely of Base Salary for the actual year. 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 13(c) shall be applicable,
but such payments as may be required by Sections 13(c) (1) and (4) shall be
reduced by the notice provided, so that the total notice and

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 7

payments 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 13(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 ONTARIO 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, 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 13(c), you shall return to DRAXIS all stock options, 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 section 13(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 Base 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 ONTARIO
                  EMPLOYMENT STANDARDS ACT;
           E.     the right to exercise all stock options and other securities
                  including those not

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 8

                then otherwise exercisable as provided for below.

       The payments referred to in paragraph 13(d), 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 paragraph 13(d) (1) (D)
above, the payment referred to in paragraph 13(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.

       For the purposes of this Agreement, a Change of Control shall be deemed
to occur in the following circumstances.

       In the event that at any date following the date of signature hereof:

           (i)    any change in the ownership as of the date hereof, direct or
                  indirect, of the outstanding shares of the Corporation as a
                  result of which an individual, partnership, association,
                  trust, unincorporated organization, ("Person") or group of
                  Persons, hold shares and/or other securities in excessive of
                  the number which, directly or following conversion or exercise
                  thereof, will entitle the holders thereof to cast 20% or more
                  of the votes attaching to all such shares and/or other
                  securities of the Corporation which may be cast to elect the
                  directors of the Corporation; or

           (ii)   the sale, transfer or any manner of disposition of 50% or more
                  of the assets of the Corporation to an arm's length Person;

       and the Board of Directors of the Corporation (the "Board of Directors")
recommends acceptance of such offer to the Shareholders of the Corporation (the
"Shareholders") or, if the Board of Directors has made no recommendation, the
Shareholders have approved or accepted the proposed transaction, then any
option, including options not then otherwise exercisable held by the you, shall
become immediately exercisable upon the issuance of the recommendation of the
Board of Directors or the approval or acceptance of the Shareholders, as the
case may be.

       For greater clarity, no provision in this employment agreement shall be
deemed to supersede any provision of the Stock Option Plan of DRAXIS, as amended
from time to time, with respect to the right to exercise options held by the
employee in certain circumstances.

       (2)    Except for the ability to exercise all stock options upon a Change
of Control as provided in paragraph 13(d)(1)(E), the payments and entitlements
outlined in paragraph 13(d) (1) shall become due and payable if, and only if:

           A.            there has been a Change of Control; and

           B.            within 24 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:
                                   -    relocating without just cause the
                                        position and/or location of

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                   Page 9

                                        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
                                   -    materially reducing without just cause
                                        your title, reporting relationship,
                                        responsibilities or authority without
                                        your consent; or
                                   -    reducing without just cause the salary
                                        paid to you by the successor employer or
                                        terminating without just cause or
                                        materially reducing without just cause
                                        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 and dental benefits, which are
                                        referred to in Section 3 above;

           C.     and, you elect in writing to receive the payments outlined in
Section 13(d)(1)

       (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, within a period of 6 months following
the Notice of Cessation, all stock options which have vested or accrued during
your employment with DRAXIS.

       (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 13(h) shall be
applicable.

       (g)    RESIGNATION AND RETIREMENT

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                  Page 10

       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
granted to you during your employment with DRAXIS which become exercisable after
the date you cease to be an employee of DRAXIS and/ or the DRAXIS Group.

       (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 nor shall you be entitled to
any further participation in any other incentive plan of the DRAXIS Group other
than as specifically set forth in this Agreement. 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 13(c) (1) or 13(d) (1) (C).

14.    FAIR AND REASONABLE
       The parties confirm that the notice requirements and pay in lieu of
notice provisions set out above in Section 13 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 the DRAXIS
Group or any other Person as a consequence of such termination.

15.    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.

16.    PROVISIONS OPERATING FOLLOWING TERMINATION
       Notwithstanding any termination of your employment with or without cause,
Sections 11, 12, 13, 14 and 17 and any provision of this Agreement necessary to
give it efficacy shall continue in full force and effect following such
termination.

17.    ACKNOWLEDGEMENT
       You acknowledge that the DRAXIS Group 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.

18.    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.

19.    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:    Danny Brazier
              316 Lori Avenue
              Stouffville, Ontario

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                  Page 11

              L4A 6C2

       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.

20.    GOVERNING LAW
       This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and Canada applicable thereto.

21.    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.

22.    ENTIRE AGREEMENT
       This Agreement and its Schedules 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, including, without limitation the Original 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 its Schedules. You waive any right to
assert a claim in tort based on any pre-contractual representations, negligent,
or otherwise, made by the DRAXIS Group.

       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 PHARMA INC.

                           Per:    /s/ Martin Barkin
                                   Martin Barkin, M.D., F.R.C.S.C.
                                   President and Chief Executive Officer of
                                   Draxis Health Inc.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL                                                  Page 12

       I accept the above-noted terms of employment with Draxis Health Inc. as
Senior Vice President Corporate Development and Strategic Planning, I agree to
comply with and be bound by the terms of employment outlined in this Agreement.

       Dated at          , the          day of             , 2004.

                                                /s/ Danny Brazier
-------------------------                       --------------------------------
Witness                                         Danny Brazier

<Page>

                                   SCHEDULE A

                     STOCK OPTION PLAN OF DRAXIS HEALTH INC.

                       AS AMENDED AND SUBMITTED TO THE TSE
                                  JUNE 27, 2001

                                STOCK OPTION PLAN

                                       OF

                               DRAXIS HEALTH INC.

1.            PURPOSE OF THE PLAN

              The Draxis Health Inc. Stock Option Plan (the "Plan) is intended
to attract and retain highly qualified officers, directors and employees who
will be motivated towards the success of Draxis Health Inc. (the "Corporation")
or any of its subsidiaries.

2.            ADMINISTRATION

              This Plan shall be administered by the Board of Directors of
the Corporation (the "Board"). Subject to the terms of the Plan, the Board is
authorized to approve persons to whom options may be granted, to construe and
interpret the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, and to make all determinations and take all actions
necessary or advisable for the Plan's administration.

3.            GRANTING OF OPTIONS

              The Board may from time to time in the manner herein provided
grant options ("Options") to purchase common shares ("Shares") of the
Corporation to directors, officers, employees or area managers or arm's length
consultants of the Corporation and may provide for the number of Shares to be
optioned to each such director, officer, employee, area manager or arm's length
consultant.. Options shall be exercised on or prior to a date determined by the
Board of Directors at the date of the grant, which shall be no later than ten
years from the date of the grant and shall be subject to the terms, conditions,
limitations and prohibitions as are herein contained or as may be in effect at
the date of the grant.

4.            SHARES SUBJECT TO PLAN

              The aggregate number of Shares that may be issued pursuant to
the Plan shall be 7,500,000 Shares. The number of Shares reserved for issuance
to any one person pursuant to options granted pursuant to this Plan or otherwise
shall not exceed 5% of the outstanding Shares.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

5.            PARTICIPANTS

              The individuals who are eligible to receive Options hereunder
shall be directors, officers or employees of the Corporation or a subsidiary of
the Corporation or arm's length consultants of the Corporation or a subsidiary
of the Corporation (the "Eligible Optionees"). The Board shall from time to
time, in its sole discretion, determine which of those Eligible Optionees will
be granted Options under the Plan (the "Optionees") and the number of Shares to
be optioned to such Eligible Optionees. The Board shall not be precluded from
granting an Option to an Eligible Optionee solely because such Eligible Optionee
may previously have been granted an Option under the plan.

6.            OPTION PRICE

              The exercise price for an Option shall be fixed by the Board
when such Option is granted. Under no circumstances shall the exercise price for
any Option be less than the closing price of the Shares on The Toronto Stock
Exchange on the trading day immediately preceding the date of the grant.

7.            OPTION TERMS

              (a)    Subject to paragraph 3 hereof, the period during which any
                     Option may be exercised, in whole or in part, shall be such
                     period as the Board may determine (the "Option Period").

              (b)    In the event that any Option has not been exercised in
                     respect of all Shares covered by the Option at the expiry
                     of the Option Period, the Option shall thereupon expire.

              (c)    In the event of the death of an Optionee on or prior to the
                     expiry of an Option, while in office and at a time when
                     such Optionee has not fully exercised any outstanding
                     Options, such Options, to the extent then exercisable but
                     unexercised, shall be exercisable by such Optionee's
                     executors or personal representatives within six (6) months
                     after such Optionee's death notwithstanding the expiration
                     date of the Option. In the event such Options are not
                     exercised at the expiry of such six-month period, such
                     Options shall expire.

              (d)    In the event of the total and permanent disability of an
                     Optionee (as determined by the Board of Directors), such
                     Optionee may, within six months after the date of such
                     determination of disability or such other longer period as
                     the Board of Directors may approve, notwithstanding the
                     expiration date of the Option, exercise such part of the
                     Option as is then exercisable. Unless the Board of
                     Directors otherwise determines, in the event the Optionee
                     has not exercised such Option at the expiry of such
                     six-month period, the Option shall expire.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

              (e)    Except as provided in subparagraphs 7(c) and (d) above, if
                     an Optionee ceases to hold office as a director, officer,
                     employee or area manager of the Corporation during the
                     Option Period, such part of the Option as is then
                     exercisable may be exercised by such Optionee for a period
                     of thirty (30) days after such Optionee ceases to hold such
                     office or position or for such longer period as the Board
                     of Directors may approve, after which time the Option shall
                     terminate; provided, however, that in no event may any
                     option be exercised outside the Option Period.

8.            NON-ASSIGNABILITY

              Each Option shall be non-assignable and non-transferable and
shall, subject to the terms hereof, be exercisable only by the Optionee to whom
it is granted.

9.            RIGHTS OF OPTIONEES BEFORE EXERCISE OF OPTION

              The Optionees shall not have any rights whatsoever as
shareholders in respect of the Shares covered by such Options until such Options
are exercised and payment for such Shares has been made.

10.           EXERCISE OF OPTION

              Subject to the provisions of the Plan, an Option may be
exercised from time to time by delivery to the Corporation at its registered
office of a written notice of exercise in the form attached hereto as Schedule A
specifying the number of Shares with respect to which the Option is being
exercised, and accompanied by payment in full of the purchase price for the
Shares then being purchased and a duly executed Stock Option Agreement.

11.           SHARE CAPITAL ADJUSTMENTS

              If the outstanding Shares subject to this Plan are changed
into or exchanged for a different number or kind of shares or securities, as a
result of one or more amalgamations, reorganizations, re-capitalization, stock
splits, consolidations, stock dividends in the nature of stock splits or the
like, appropriate adjustments shall be made in the number and/or kind of shares
or securities for which the Options may thereafter be granted under this Plan
and for which Options then outstanding under this Plan may thereafter be
exercised. Any such adjustment in outstanding Options shall be made without
changing the aggregate exercise price applicable to the unexercised portions of
such Option.

              No fractional securities shall be issued upon the exercise of
an Option. Accordingly, if as a result of any adjustment under this paragraph,
an Optionee would be entitled to a fractional security, the Optionee shall have
the right to acquire only the adjusted number of whole securities and no payment
or other adjustment will be made with respect to fractional securities so
disregarded.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

12.           LIQUIDATION, DISSOLUTION OR WINDING-UP

              In the event that the Corporation proposes to liquidate,
dissolve or wind-up, the Corporation shall give written notice thereof to each
Optionee and such Optionee shall be entitled to exercise all then exercisable
Options within thirty (30) days of the giving of such notice, provided, however,
that in no event may such Option be exercised outside of the Option Period. Upon
the expiration of such thirty (30) day period, all rights of Optionees to such
Options or to exercise the same shall terminate and cease to have any further
force or effect, unless otherwise determined by the Board of Directors.

13.           CHANGE OF CONTROL

              Notwithstanding the foregoing, in the event that at any date
following the date hereof:

              (a)    any change in the ownership as of the date hereof, direct
                     or indirect, of the outstanding shares of the Corporation
                     as a result of which an individual, partnership,
                     association, trust, unincorporated organization, ("person")
                     or group of Persons, hold shares and/or other securities in
                     excessive of the number which, directly or following
                     conversion or exercise thereof, will entitle the holders
                     thereof to cast 20% or more of the votes attaching all such
                     shares and/or other securities of the Corporation which may
                     be cast to elect the directors of the Corporation; or

              (b)    the sale, transfer or any manner of disposition of 50% or
                     more of the assets of the Corporation to an arm's length
                     Person;

and the Board of Directors recommends acceptance of such offer to the
Shareholders of the Corporation or, if the Board of Directors has made no
recommendation, the Shareholders have approved or accepted the proposed
transaction, then any Option outstanding hereunder, including Options not then
otherwise exercisable, shall become immediately exercisable upon the issuance of
the recommendation of the Board of Directors or the approval or acceptance of
the Shareholders, as the case may be.

14.           AMENDMENT OR TERMINATION

              The Board of Directors may terminate the Plan any time or,
with the consent of The Toronto Stock Exchange, amend the Plan at any time
provided, however, that except as permitted herein, the Board may not, without
the approval of the Optionee to whom Options have been granted, alter or impair
such Option.

              The Board may from time to time make, amend and repeal such
regulations under the Plan as they deem expedient for the purpose of carrying
out the Plan and such regulations from time to time in force shall, together
with the Plan, be binding and conclusive on the Corporation and on all holders
of Options granted under the Plan and their legal personal representatives.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

                                  SCHEDULE "A"

                                STOCK OPTION PLAN

                               DRAXIS HEALTH INC.

                              ELECTION TO PURCHASE

TO:           The Secretary of
              Draxis Health Inc.

              Pursuant to the terms of the stock option granted to me on
(the "Date of the Grant"), I hereby elect to purchase                   common
shares of Draxis Health Inc. which were the subject of such stock option. I
understand that such purchase is subject to all the terms and conditions of such
stock option and of the Draxis Health Inc. Stock Option Plan.

              Enclosed is a certified cheque, bank draft or money order payable
to Draxis Health Inc. in the amount of $             , the full amount of the
exercise price for the number of common shares indicated above.

-------------------------------      ------------------------------------
DATE                                 (PRINT NAME)

                                     ------------------------------------
                                     (SIGNATURE)

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

                                   SCHEDULE B

                            DEFERRED SHARE UNIT PLAN

                               DRAXIS HEALTH INC.
                            DEFERRED SHARE UNIT PLAN
                                  FOR EMPLOYEES

1.     INTRODUCTION

1.1    PURPOSE

       The Draxis Health Inc. Deferred Share Unit Plan for senior management
employees has been established to provide such employees of Draxis Health Inc.
and its subsidiaries with the opportunity to acquire share equivalent units
convertible to cash or Common Shares of Draxis Health Inc. upon the termination
of employment of an employee. Acquiring such units will allow these employees to
participate in the long-term success of Draxis Health Inc. and will promote a
greater alignment of interests between such employees and the shareholders.

1.2    DEFINITIONS

       For purposes of the Plan:

       (a)    "Annual Remuneration" means the Base Salary and Bonus payable to
              an Eligible Employee by the Company in or in respect of each
              financial year;

       (b)    "Applicable Withholding Taxes" means any and all taxes and other
              source deductions or other amounts which the Company is required
              by law to withhold from any amounts to be paid or credited
              hereunder;

       (c)    "Award Date" means each date on which Deferred Share Units are
              credited to an Eligible Employee in accordance with Section 3.1,
              which shall be, unless otherwise determined by the Committee,
              January 1st of each financial year in which the Eligible Employee
              is eligible to participate in the Plan, except 2000 the first year
              of the Plan in which case the Award Date shall be February 1,
              2000;

       (d)    "Award Market Value" means the average of the daily high and low
              board lot trading prices of Common Shares on The Toronto or Nasdaq
              Stock Exchanges on each of the five trading days prior to the
              Award Date on which there was a trade of a board lot of Common
              Shares. Should Common Shares no longer be publicly traded at the
              relevant time such that the Award Market Value cannot be
              determined in accordance with the formula set out herein, such
              value shall be determined by the Committee in good faith and shall
              depend upon the fair market value of the Common Shares within the
              period that commences one year before the Award Date and ends at
              the time of the Award Date;

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

       (e)    "Base Salary" means the regular base salary received by an
              Eligible Employee from the Company during the relevant financial
              year as determined by the Company from time to time excluding
              vacation pay in lieu of time off, Bonuses, service awards or any
              special compensation;

       (f)    "Bonus" means an amount in addition to Base Remuneration
              calculated and awarded by the Board to an Eligible Employee
              following completion of a financial year in respect of such
              Employee's contribution to the operations of the Company for such
              financial year, excluding for greater certainty, any payments
              under the Stock Ownership Plan or, its predecessor, the Stock
              Purchases and Bonus Plan;

       (g)    "Board" means the board of directors of the Company;

       (h)    "Committee" means the committee of the Board responsible for
              recommending to the Board the eligibility of an employee to
              participate in this Plan;

       (i)    "Common Shares" means the common shares of the Company;

       (j)    "Company" means Draxis Health Inc. or any of its subsidiaries or
              affiliates as defined in paragraph 3 of the Canada Customs and
              Revenue Agency Interpretation Bulletin IT-337R3 that may adopt the
              Plan pursuant to its terms;

       (k)    "Deferred Share Unit" means a unit equivalent in value to a Common
              Share, credited by means of a bookkeeping entry in the books of
              the Company in accordance with an election made by an Eligible
              Employee pursuant to Section 3;

       (l)    "Deferred Share Units outstanding under the Plan" or "Deferred
              Share Units credited to an Employee's Account" at a particular
              time for the purposes of Articles 4 and 5 shall be deemed to mean
              and include at any particular time in any particular financial
              year Deferred Share Units subsequently granted in respect of a
              Bonus determined in respect of a completed financial year and in
              respect of which an Eligible Employee has made an election
              pursuant to Section 3.2;

       (m)    "Deferred Share Unit Amount" has the meaning given thereto in
              Section 4.1;

       (n)    "Dividend Equivalents" means a bookkeeping entry whereby each
              Deferred Share Unit is credited with the equivalent amount of the
              dividend or other distribution paid on a Common Share in
              accordance with Section 3.3;

       (o)    "Dividend Market Value" means the average of the daily high and
              low board lot trading prices of Common Shares on The Toronto or
              Nasdaq Stock Exchanges on each of the five trading days prior to
              the Award Date on which there was a trade of a board lot of Common
              Shares;

<Page>

       (p)    "Election Form" means a document substantially in the form of
              Schedule "A" to this Plan;

       (q)    "Eligible Employee" means a person who is, at the relevant time,
              an employee of the Company or any of its subsidiaries and is
              designated by the Committee as eligible to participate in the
              Plan;

       (r)    "Plan" means this Draxis Health Inc. Deferred Share Unit Plan for
              Employees, as amended from time to time;

       (s)    "Redemption Date" means the date upon which an Eligible Employee
              ceases to be employed by the Company or any of its subsidiaries or
              affiliates as defined in paragraph 3 of the Canada Customs and
              Revenue Agency's Interpretation Bulletin IT 337R3; and

       (t)    "Redemption Value" means the average of the daily high and low
              board lot trading prices of Common Shares on The Toronto or Nasdaq
              Stock Exchanges on each of the five trading days prior to the
              Redemption Date on which there was a trade of a board lot of
              Common Shares. Should Common Shares no longer be publicly traded
              at the relevant time such that the Redemption Value cannot be
              determined in accordance with the formula set out herein the
              provisions in this regard described in the definition of Award
              Value shall apply mutatis mutandis.

1.3    EFFECTIVE DATE OF PLAN

       The effective date of the Plan shall be February 1, 2000 or such other
later date as the Board may determine.

2.     ADMINISTRATION

2.1    ADMINISTRATION OF THE PLAN

       The Plan shall be administered by the Board of Directors which shall,
without limitation, have full and final authority in its discretion, but subject
to the express provisions of the Plan, to interpret the Plan, to prescribe,
amend and rescind rules and regulations relating to it and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Board of Directors may delegate any or all of its authority with respect to
the administration of the Plan and any or all of the rights, powers and
discretions with respect to the Plan granted to it hereunder to the Committee or
such other committee of directors of the Company as the Board of Directors may
designate and upon such delegation the Committee or other committee of
directors, as the case may be, as well as the Board of Directors, shall be
entitled to exercise any or all of such authority, rights, powers and
discretions with respect to the Plan. The directors of the Company may fully
participate in voting and in other deliberations or proceedings of the Board of
Directors in respect of the Plan, notwithstanding: (i) the eligibility of any of
the directors to participate in the Plan; and (ii) that any of the directors may
hold Deferred Share Units granted pursuant to the Plan.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

2.2    TAXES AND OTHER SOURCE DEDUCTIONS

       The Company shall be authorized to deduct from any amount to be paid or
credited hereunder any Applicable Withholding Taxes in such manner as the
Company determines.

3.     DEFERRED SHARE UNITS

3.1    AWARD OF DEFERRED SHARE UNITS

(a)    Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Base Salary which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account on each
Award Date in respect of the portion of his or her base Salary to be credited in
Deferred Share Units to be earned in the financial year commencing on the Award
Date. The number of Deferred Share Units (including fractional Deferred Share
Units) to be credited on each Award Date shall be determined by dividing (a) the
amount of the applicable portion of the Base Salary to be credited in Deferred
Share Units on that Award Date by (b) the Award Market Value.

(b)    Each Eligible Employee shall be credited with Deferred Share Units in
respect of that part of an Eligible Employee's Bonus which such Eligible
Employee has elected to receive in the form of Deferred Share Units as provided
in Section 3.2, in the manner set forth in this Plan. All Deferred Share Units
to be credited to an Eligible Employee will be credited to an account maintained
for the Eligible Employee on the books of the Company. The Deferred Share Units
to be credited to an Eligible Employee will be credited to such account as of
the Award Date for a relevant financial year upon determination of the Bonus
earned following completion of such financial year. The number of Deferred Share
Units (including fractional Deferred Share Units) to be credited effective each
Award Date shall be determined by dividing (a) the amount of the applicable
portion of the Bonus to be credited in Deferred Share Units effective that Award
Date by (b) the Award Market Value determined in respect of that Award Date.

3.2    ELECTION

       Each Eligible Employee shall have the right to elect on December 1
of each financial year (except 2000 the first year of the Plan in which case the
date shall be February 1, 2000) whether such Employee wishes to receive some of
such Employee's Annual Remuneration for the immediately succeeding financial
year (or for that part of the year remaining in the case of 2000) in the form of
Deferred Share Units. This election shall be made by completing, signing and
delivering to the Secretary of the Company the Election Form: (a) in the case of
an existing employee, by December of the financial year preceding the financial
year to which such election is to apply; or (b) in the case of 2000 by February
1, 2000. In each case, the election, when made, shall only apply prospectively
with respect to the Eligible Employee's Annual Remuneration yet to be earned.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

3.3    CREDITS FOR DIVIDENDS

(a)    An Eligible Employee's account shall be credited with Dividend
Equivalents in the form of additional Deferred Share Units on each dividend
payment date in respect of which ordinary course cash dividends are paid on
Common Shares. Such Dividend Equivalents shall be computed by dividing: (a) the
amount obtained by multiplying the amount of the dividend declared and paid per
Common Share by the number of Deferred Share Units recorded in the Eligible
Employee's account on the record date for the payment of such dividend, by (b)
the Dividend Market Value, with fractions computed to three decimal places.

(b)    All Dividend Equivalents credited hereunder at any particular time in a
year to an Eligible Employee in the form of Deferred Share Units shall be
adjusted as of the particular dividend payment date to reflect the determination
at the end of a year of additional Deferred Share Units in respect of a Bonus
concerning which an Eligible Employee has made an election pursuant to the
provisions of 3.1 and 3.2.

3.4    REPORTING OF DEFERRED SHARE UNITS

       Statements of the Deferred Share Unit accounts will be provided to the
Eligible Employees at least annually.

4.     REDEMPTION OF DEFERRED SHARE UNITS

4.1    REDEMPTION OF DEFERRED SHARE UNITS

(a)    An Eligible Employee shall be entitled on the Redemption Date to redeem
the Deferred Share Units credited to the Eligible Employee's account for an
amount (the "Deferred Share Unit Amount") equal to the product that results from
multiplying (i) the number of Deferred Share Units recorded in the Eligible
Employee's account on the Redemption Date by (ii) the Redemption Value of the
Common Shares. Upon payment in full by the Company to the Eligible Employee of
the value of the Deferred Share Unit Amount, the Deferred Share Units shall be
cancelled.

(b)    The Deferred Share Unit Amount payable to an Eligible Employee, less any
Applicable Withholding Taxes, may be used to acquire Common Shares on the open
market through an independent broker designated by the Company (the "Designated
Broker") or may be paid in cash less Applicable Withholding Taxes to the
Eligible Employee, at the discretion of the Company. The Company will also make
a cash payment, less any Applicable Withholding Taxes, to the Eligible Employee
with respect to the value of fractional Deferred Share Units standing to the
Eligible Employee's credit.

(c)    If the Company has determined, that payment of the Deferred Share Unit
Amount be made in the form of Common Shares purchased on the open market through
a Designated Broker, as described in Section 4.1 (b) above, the Company will
calculate the number of whole Common Shares to be purchased by the Designated
Broker on the open market on behalf and for

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

the benefit of the Eligible Employee. The number of Common Shares will be
determined by dividing (i) the Deferred Share Unit Amount payable, less any
Applicable Withholdings Taxes, by (ii) the Redemption Value of a Common Share as
determined on the Redemption Date or, if the Redemption Date is not a trading
date for shares on the Toronto and Nasdaq Stock Exchanges, on the next such
trading date and the Company shall advise the Designated Broker of the specified
number of whole Common Shares to be purchased on behalf of the Eligible
Employee. The Designated Broker will purchase the specified number of whole
Common Shares as soon practicable after being notified by the Company. On or
before the date of settlement with respect to the purchase of the Common Shares
by the Designated Broker, the Company, acting as agent for the Eligible
Employee, will pay the purchase price of the specified number of Common Shares
to the Designated Broker, together with any reasonable brokerage fees or
commissions related thereto. The Company will also make a cash payment, less any
Applicable Withholdings Taxes, to the Eligible Employee with respect to the
value of fractional Deferred Share Units still standing to the Eligible
Employee's credit after the maximum number of whole Common Shares has been
purchased as described above.

(d)    Deferred Share Unit Amounts paid by the Company in accordance with (a)
through (c) above will be paid to or on behalf of the Eligible Employee no later
than the end of the first calendar year after the Redemption Date.

4.2    DEATH OF ELIGIBLE EMPLOYEE PRIOR TO REDEMPTION

       Upon the death of an Eligible Employee prior to the redemption of the
Deferred Share Units credited to the account of such Eligible Employee under the
Plan, a dependant relation or legal representative, shall be entitled to redeem
the Deferred Share Units in accordance with Section 4.1. For greater certainty,
the Deferred Share Unit Amount payable shall be equivalent to the amount which
would have been paid to the Eligible Employee pursuant to and subject to Section
4.1, calculated as if the Eligible Employee had previously ceased to be an
employee of the Company on the day prior to his or her death.

4.3    In the event a Redemption Date occurs prior to the end of a financial
year, the number of Deferred Share Units awarded to an Eligible Employee in
respect of his Annual Remuneration for that particular year shall, for the
purposes of calculating the Redemption Value, be reduced proportionately to
reflect that the Eligible Employee was employed by the Company for less than
that particular full financial year.

5.     GENERAL

5.1    ADJUSTMENTS TO DEFERRED SHARE UNITS

       In the event of the declaration of any stock dividend, a subdivision,
consolidation, reclassification, exchange, or other change with respect to the
Common Shares, or a merger, consolidation, spin-off, or other distribution
(other than ordinary course cash dividends) of the Company's assets to its
shareholders, the account of each Eligible Employee and the Deferred Share Units
outstanding under the Plan shall be adjusted to appropriately reflect the event.
However, no amount will be paid to, or in respect of, an Eligible Employee under
the Plan or

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

pursuant to any other arrangement, and no Deferred Share Units will
be granted to such Eligible Employee to compensate for a downward fluctuation in
the price of Common Shares, nor will any other form of benefit be conferred
upon, or in respect of, an Eligible Employee for such purpose.

5.2    DESIGNATION OF BENEFICIARY

       An Eligible Employee may, by written notice to the Secretary of the
Company, designate a person to receive the benefits payable under the Plan on
the Eligible Employee's death, and may also by written notice to the Secretary
of the Company alter or revoke such designation from time to time, subject
always to the provisions of any applicable law. Such written notice shall be in
such form and shall be executed in such manner as the Committee in its
discretion may from time to time determine.

5.3    AMENDMENT, SUSPENSION, OR TERMINATION OF PLAN

(a)    The Board may from time to time amend or suspend the Plan in whole or in
part and may at any time terminate the Plan. However, any such amendment,
suspension, or termination shall not adversely affect the right of any Eligible
Employee with respect to Deferred Share Units credited to such Eligible Employee
at the time of such amendment, suspension or termination, without the consent of
the affected Eligible Employee.

(b)    If the Board terminates the Plan, no new Deferred Share Units will be
credited to the account of an Eligible Employee, but previously credited
Deferred Share Units and Deferred Share Units to be credited to the end of a
financial year with respect to any Bonus pursuant to Section 3.1 shall remain
outstanding and shall be entitled to Dividend Equivalents as provided under
section 3.3, and be paid in accordance with the terms and conditions of the Plan
existing at the time of termination. The Plan will finally cease to operate for
all purposes when the last remaining Eligible Employee receives payment, in cash
or Common Shares, in satisfaction of all Deferred Share Units recorded in the
Eligible Employee's account.

5.4    COMPLIANCE WITH LAWS

       The administration of the Plan shall be subject to and performed in
conformity with all applicable laws and any applicable regulations of a duly
constituted authority. Should the Committee, in its sole discretion, determine
that it is not feasible or desirable to honour an election in favour of Deferred
Share Units due to such laws or regulations, its obligation shall be satisfied
by means of an equivalent cash payment (equivalence being determined on a
before-tax basis).

5.5    REORGANIZATION OF THE COMPANY

       The existence of any Deferred Share Units shall not affect in any way the
right or power of the Company or its shareholders to make or authorize any
adjustment, recapitalization, reorganization or other change in the Company's
capital structure or its business, or any amalgamation, combination, merger or
consolidation involving the Company or to create or issue

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

any bonds, debentures, shares or other securities of the Company or the rights
and conditions attaching thereto or to effect the dissolution or liquidation of
the Company or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar nature
or otherwise.

5.6    GENERAL RESTRICTIONS AND ASSIGNMENT

(a)    Except as required by law, the rights of an Eligible Employee under the
Plan are not capable of being anticipated, assigned, transferred, alienated,
sold, encumbered, pledged, mortgaged or charged and are not capable of being
subject to attachment or legal process for the payment of any debts or
obligations of the Eligible Employee.

(b)    Rights and obligations under the Plan may be assigned by the Company to a
successor in the business of the Company.

5.7    NO RIGHT TO SERVICE

       Neither participation in the Plan nor any action taken under the Plan
shall give or be deemed to give any Eligible Employee a right to continued
employment with the Company or any of its subsidiaries and shall not interfere
with any right of the Company to terminate the employment of any Eligible
Employee at any time.

5.8    NO SHAREHOLDER RIGHTS

       Under no circumstances shall Deferred Share Units be considered Common
Shares or shares of any other class of the Company, nor entitle any Eligible
Employee to exercise voting rights or any other rights attaching to the
ownership of Common Shares, nor shall any Eligible Employee be considered the
owner of the Common Shares by virtue of the award of Deferred Share Units.

5.9    GOVERNING LAW

       The Plan shall be governed by, and interpreted in accordance with, the
laws of the Province of Ontario and the laws of Canada applicable therein.

5.10   INTERPRETATION

       In this text words importing the singular meaning shall include the
plural and VICE VERSA, and words importing the masculine shall include the
feminine and neuter genders.

5.11   SEVERABILITY

       The invalidity or unenforceability of any provision of this Plan shall
not affect the validity or enforceability of any other provision and any invalid
or unenforceable provision shall be severed from this Plan.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

                                  SCHEDULE "A"

                   DRAXIS HEALTH INC. DEFERRED SHARE UNIT PLAN
                           FOR DIRECTORS (THE "PLAN")

                              ANNUAL ELECTION FORM

1.     ANNUAL REMUNERATION

(a)    I elect to receive my Base Remuneration as follows (please check either
       Box "A" or Box "B"):

              A.     _______% in Deferred Share Units (not to exceed 20%)

                     and

              B.     ________% in cash.

(b)    I elect to receive my Bonus, if any, as follows: (Please check either Box
       "C" or Box "D"

              C.     ________% in Deferred Share Units (not to exceed 100%)

              D.     ________% in cash.

2.     DESIGNATION OF BENEFICIARY

       In accordance with the terms of the Plan, I appoint as designated
       beneficiary, or if previously done, I hereby revoke any designation of
       beneficiary heretofore made by me under the Plan, and hereby appoint as
       designated beneficiary to receive any payment in accordance with the Plan
       that may fall due after my death:
       ______________________________________ [INSERT FULL NAME]; provided,
       however, that if the above named beneficiary predeceases me such payment
       shall be made to my estate.

3.     I UNDERSTAND THAT:

   -   All capitalized terms shall have the meanings attributed to them under
       the Plan.
   -   All payments will be net of any Applicable Withholding Taxes.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

                                   )     --------------------------------------
     Witness Signature             )     Eligible Employee's  Signature
                                   )
                                   )     --------------------------------------)
     Witness Name (please print)   )     Eligible Employee's Name (please print)
                                   )
                                   )     --------------------------------------
                                   )     Date

UNTIL THIS ELECTION FORM IS RETURNED TO THE SECRETARY OF THE COMPANY, 100% OF
THE ANNUAL REMUNERATION WILL BE RECEIVED IN THE FORM OF CASH.

<Page>

                                   SCHEDULE C

               DRAXIS HEALTH DISCLOSURE AND INSIDER TRADING POLICY

OBJECTIVE AND SCOPE

Draxis Health Inc. ("Draxis" or the "Company") is committed to providing timely,
factual, accurate and balanced disclosure of material information about the
Company, consistent with legal and regulatory requirements. The Company will
disseminate news regarding developments which could have a material impact on
the Company's operations and financial results on a timely basis, except where
confidentiality issues require a delay. It is imperative that the general public
has timely access to material information.

This Policy confirms in writing our existing disclosure policies and practices.
Its goal is to raise awareness of the Company's approach to disclosure among the
Board of Directors, senior management and employees of the Company and its
subsidiaries. This Policy extends to all employees of the Company and its
subsidiaries, its Board of Directors and those authorized to speak on its
behalf. It covers disclosures in documents filed with the securities regulators
and written statements made in the Company's annual and quarterly reports, news
releases, letters to shareholders, and information contained on the Company's
website and other electronic communications. It also extends to oral statements
and in particular presentations and speeches by senior management and oral
statements in meetings and telephone conversations with analysts and investors,
interviews with the media as well as press conferences and conference calls.
This Policy has been approved by the Board of Directors of the Company.

DISCLOSURE AND INSIDER TRADING POLICY COMMITTEE

The President and Chief Executive Officer, upon consultation with the Board of
Directors' Nominating and Corporate Governance Committee, has established a
Disclosure and Insider Trading Policy Committee consisting of the President and
Chief Executive Officer (CEO), the Chief Financial Officer (CFO), the Investor
Relations Officer (IRO), and the General Counsel and Secretary

The Disclosure and Insider Trading Policy Committee will determine when
developments not specifically addressed by this Policy require public disclosure
or require the imposition of trading restrictions or a blackout period and will
determine who specifically is affected by such restrictions. The Committee will
meet as conditions dictate. If appropriate, the Committee will review any
situation not specifically addressed by this Policy with the Nominating and
Corporation Governance Committee or the Board of Directors of the Company. A
written record of decisions will be maintained by the General Counsel and
Secretary.

IT IS ESSENTIAL THAT THE DISCLOSURE AND INSIDER TRADING POLICY COMMITTEE BE
FULLY APPRISED BY ALL OFFICERS AND EMPLOYEES OF THE COMPANY OF ALL MATERIAL
COMPANY DEVELOPMENTS IN ORDER TO EVALUATE AND DISCUSS THOSE EVENTS TO DETERMINE
THE APPROPRIATENESS AND TIMING FOR PUBLIC RELEASE OF MATERIAL INFORMATION OR
WHETHER THE INFORMATION SHOULD REMAIN CONFIDENTIAL (IN KEEPING WITH SECURITIES
REGULATIONS AND STOCK EXCHANGE RULES), AND IF SO, HOW THAT UNDISCLOSED
CONFIDENTIAL INFORMATION WILL BE CONTROLLED AND FOR WHAT TIME PERIOD.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

The Disclosure and Insider Trading Policy Committee will be chaired by a
designated member of the Committee.

The Disclosure and Insider Trading Policy Committee will review and update this
Policy, if necessary, on an annual basis or as needed to ensure compliance with
changing securities regulations and guidelines. All modifications to this Policy
shall be approved by the Board of Directors of the Company.

DESIGNATED SPOKESPERSONS

The Company designates a limited number of spokespersons responsible for
communication with the investment community, investors, analysts, regulators and
the media. The CEO, the CFO and the IRO shall be the official spokespersons for
the Company. Individuals holding these offices may, from time to time, designate
others within the Company to speak on behalf of the Company as back-ups or to
respond to specific inquiries from the investment community or the media.

Employees who are not authorized spokespersons must not respond under any
circumstances to inquiries from the investment community or the media unless
specifically asked to do so by an authorized spokesperson. All such inquiries
shall be referred to the IRO.

Except for discussions with business partners by senior management, employees
should refrain from discussing confidential and potentially material affairs of
the Company with third parties, unless expressly authorized to do so.

RESPONSIBILITY FOR ELECTRONIC COMMUNICATIONS

This Policy also applies to electronic communications. Accordingly, officers and
personnel responsible for written public disclosures shall also be responsible
for electronic communications. The IRO is responsible for updating and
maintaining the investor relations section of the Company's website and is
responsible, along with the General Counsel, for monitoring all Company
information placed on the website to ensure that it is accurate, complete and up
to date. Any material changes in information must be updated immediately.
Although the Company views electronic communications as an extension of its
formal disclosure record, it recognizes that disclosure on its website does not
necessarily constitute adequate disclosure of information that is considered
material non-public information. Any disclosures of material information on its
website will be coordinated with full disclosure, which generally includes
appropriate dissemination of a news release.

Policies and practices relating to the construction and use of the Company
website shall be reviewed periodically by the Disclosure and Insider Trading
Policy Committee, using in part the guidelines set out in Appendix A, Guidelines
for the Company Website and the recommendation of any reports from external
website audits/reviews.
The IRO shall also be responsible for responses to electronic inquiries. Only
previously disclosed public information or information which could otherwise be
disclosed in accordance with this Policy shall be utilized in responding to
electronic inquiries.

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

Employees are prohibited from participating in Internet chat room or newsgroup
discussions on matters pertaining to the Company's activities or its shares or
other securities. Employees who encounter a discussion pertaining to the Company
should advise the IRO immediately, so the discussion may be monitored.

MATERIAL INFORMATION

Material information is any information relating to the business and affairs of
the Company that results in, or would reasonably be expected to result in, a
significant change in the market price or value of the Company's securities or
that would reasonably be expected to have a significant influence on a
reasonable investor's investment decisions. To qualify as material information,
the United States Securities and Exchange Commission (SEC) states that there
must be a substantial likelihood that a fact would be viewed by a reasonable
investor as significantly altering the total mix of information available about
the Company. Material information consists of both material facts and material
changes relating to the business and affairs of the Company. Examples of
developments that may give rise to material information include, but are not
limited to, the following:

  -    Development of new products and developments affecting the Company's
       resources, technologies, products or market
  -    Entering into or loss of significant contracts
  -    A significant acquisition, disposition or merger involving the Company
  -    A new issue of securities or a significant change in the Company's
       capital structure
  -    Significant changes in senior management
  -    Significant litigation
  -    A significant change in the Company's lending arrangements
  -    A significant change in previously disclosed near-term expected revenues
       or earnings
  -    Any other developments relating to the business and affairs of the
       Company that would reasonably be expected to significantly affect the
       market price or value of any of the Company's securities or that would
       reasonably be expected to have a significant influence on a reasonable
       investor's investment decisions.

PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATION

In complying with the requirement to disclose forthwith all material information
under applicable laws and stock exchange rules, the Company will adhere to the
following basic disclosure rules:

  1.   Material information will be publicly disclosed immediately, unless the
       Disclosure and Insider Trading Policy Committee determines that such
       disclosure would be unduly detrimental to the Company (in which case the
       information will be kept confidential for a limited period of time until
       the Committee determines it is appropriate to publicly disclose). In
       appropriate circumstances, the Disclosure and Insider Trading Policy
       Committee will cause a confidential material change report to be filed
       with the applicable securities regulators, will periodically (at least
       every 10 days) review its decision to keep the information confidential
       and will promptly

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

       disclose any material change that is the subject of the confidential
       material change report if required by applicable securities legislation.

  2.   Disclosure must include any information the omission of which would make
       the rest of the disclosure misleading (half truths are misleading).

  3.   Unfavourable material information must be disclosed as promptly and
       completely as favourable information.

  4.   No selective disclosure. Previously undisclosed material information must
       not be disclosed to selected individuals or organizations (for example,
       in an interview with an analyst or in a telephone conversation with a
       major shareholder). If previously undisclosed material information has
       been inadvertently disclosed to an analyst or any other person, such
       information must be disclosed promptly via news release in compliance
       with applicable SEC and Canadian regulatory and legal requirements. The
       Company will always file documents containing material information
       concurrently on all appropriate public files, including SEDAR and EDGAR.

  5.   Disclosure of material information must be updated if earlier disclosure
       has become misleading as a result of intervening events.

CONFIDENTIAL INFORMATION

The withholding of confidential material information on the basis that
disclosure would be unduly detrimental to the Company's interest must be
infrequent and can only be justified where the potential harm to the Company or
to shareholders caused by immediate disclosure may reasonably be considered to
significantly outweigh the undesirable consequences of delaying disclosure.
Stock exchanges, specifically NASDAQ and the TSX, discourage delaying disclosure
for a lengthy period of time, since it is unlikely that confidentiality can be
maintained beyond the short term.

Examples of instances where disclosure might be unduly detrimental to the
Company include:

  1. Release of the information would prejudice the ability of the Company to
     pursue specific and limited near-term objectives or to complete a
     transaction or series of transactions that are underway.

  2. Disclosure of the information would provide competitors with confidential
     corporate information that would be of significant benefit to them. A
     decision to release a new product for example, or the details of the
     features of a new product, may be withheld for competitive reasons.

  3. Disclosure of information concerning the status of ongoing negotiations
     would prejudice the successful completion of those negotiations.

NON GAAP FINANCIAL MEASURES

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

Whenever the Company publicly discloses material information that includes a
non-GAAP financial measure, the disclosure must comply with applicable SEC and
Canadian legal requirements and guidelines. The non-GAAP financial measure must
be accompanied by a presentation of the most directly comparable financial
measure calculated and presented in accordance with GAAP and a reconciliation of
the differences between the non-GAAP financial measure and the most comparable
GAAP financial measure or measures. If the non-GAAP financial measure is made
public orally, telephonically, by webcast, by broadcast or by similar means, the
required reconciliation must be posted on the Company's website and the location
of the website must be made public in the same presentation in which the
non-GAAP financial measure is made public.

NEWS RELEASES

Once the Disclosure and Insider Trading Policy Committee determines that a
development is material, it will authorize the prompt issuance of a news
release, unless the Disclosure and Insider Trading Policy Committee determines
that such developments must remain confidential for the time being, in which
case any confidential filings required by applicable securities legislation will
be made and appropriate control of that inside information will be instituted.

Should a material statement inadvertently be made in a selective forum, the
Company will promptly issue a news release in order to fully and publicly
disclose that information in accordance with applicable SEC and Canadian
regulatory and legal requirements. The Disclosure and Insider Trading Policy
Committee shall determine at its discretion if the text of the news release
should be reviewed prior to publication by the Audit Committee (for financial
matters) and the Board of Directors (for financial and all other matters), the
Company's external auditors and outside counsel.

News releases will be disseminated through an approved news wire service that
provides simultaneous national and/or international distribution. News releases
will be transmitted to all stock exchange members, relevant regulatory bodies,
major national financial media and the local media in areas where the Company
has its headquarters and operations.

All press releases must be sent to the TSX for their review prior to their
release, giving the TSX reasonable time to provide any comments thereon. If a
stock exchange upon which shares of the Company are listed is open for trading
at the time of a proposed announcement, prior notice of a news release
announcing material information must be provided to the market surveillance
agency associated with the exchange to enable a trading halt, if deemed
necessary by the exchange. If a news release announcing material information is
issued outside of trading hours, market surveillance agencies must be notified
promptly and before the market reopens.

RUMOURS

So long as it is clear that the Company is not the source of the market rumour,
the Company does not comment, affirmatively or negatively, on rumours. This also
applies to rumours on the Internet. The Company's spokespersons will respond
consistently to those rumours, saying, "IT IS

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

OUR POLICY NOT TO COMMENT ON MARKET RUMOURS OR SPECULATION." Should the stock
exchange request that the Company make a definitive statement in response to a
market rumour that is causing significant volatility in the stock, the
Disclosure and Insider Trading Policy Committee will consider the matter and
decide whether to make a policy exception. If the rumour is true in whole or in
part, the Company will immediately issue a news release disclosing the relevant
material information.

FORWARD LOOKING INFORMATION

The Company will not release earnings projections other than in a prospectus
grade offering document (and only in compliance with applicable securities
laws), will not confirm analysts' earnings estimates and will not attempt to
influence an analyst's opinions or conclusions. The Company may continue to
publicly disseminate non-material, forward-looking information to enable the
investment community to better evaluate the Company and its prospects. To the
extent that forward looking information is provided in a disclosure document,
the document is to be accompanied by meaningful cautionary language that warns
investors that there is a risk that the statement could change materially. In
the case of oral or electronically presented forward-looking statements, the
statement will be identified as such and the spokesperson will refer to a
readily available written document (news release, annual report) for the
cautionary language.

CONTACTS WITH ANALYSTS, INVESTORS AND THE MEDIA

The Company recognizes that analysts and the media are important conduits for
disseminating corporate information to the investing public and that analysts
play a key role in interpreting and clarifying existing public data and in
providing investors with context, industry trends, comparisons and background
information and details that cannot practically be put in public documents. The
Company will meet with analysts, investors and reporters on an individual or
small group basis as needed and will initiate contacts or respond to analyst,
investor and media calls in a timely, consistent and accurate fashion in
accordance with this disclosure policy. The Company will provide only
non-material information through individual and group meetings, in addition to
publicly disclosed information, recognizing that this information may be
constructed into a mosaic that could result in material information. The Company
cannot alter the materiality of information by breaking down the information
into smaller, non-material components. The Company will not engage in selective
disclosure of material non-public information to analysts, however it will
provide, through its website or otherwise, the same sort of detailed,
non-material information to individual investors or reporters that has been
provided to analysts. Any slides used in meetings with analysts or investors may
be posted on the website. It is highly desirable that where practicable more
than one Company representative be present at all individual and group meetings
with analysts, investors, media representatives.

The Company recognizes that analyst disclosure does not constitute adequate
disclosure of information that is considered material non-public information. If
material information is to be announced at an analyst or shareholder meeting or
a press conference, its announcement must be disseminated concurrently to the
general public via a full disclosure news release.

QUIET PERIODS

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

In order to avoid the potential for selective disclosure or even the perception
or appearance of selective disclosure, the Company will observe a quiet period
prior to quarterly earnings announcements. Regular quiet periods commence 30
days before the issuance of a news release disclosing quarterly results and end
upon the issuance of said release. During the quiet period, no meetings or
telephone contacts with analysts and investors will be initiated and no guidance
will be provided, however the Company will respond to unsolicited inquiries
concerning factual matters.

If the Company is invited to participate, during a quiet period, in investment
meetings or conferences organized by others, the Disclosure and Insider Trading
Policy Committee will determine, on a case-by-case basis, if it is advisable to
accept the invitation. If accepted, the Company will exercise extreme caution to
avoid selective disclosure of any material, non-public information.

REVIEWING ANALYST DRAFT REPORTS AND MODELS

It is the Company's policy that upon request it may review draft research
reports or financial models solely for factual accuracy based on publicly
disclosed information and that it will provide no guidance. The Company will not
confirm, or attempt to influence, an analyst's opinions or conclusions. If
requested, the Company will review the sections of a draft research report or
model for the purpose of identifying factual errors consistent with NASD Rule
2711.

Analyst reports are proprietary products of the analysts' firms. Re-circulating
a report by an analyst may be viewed as an endorsement by the Company of the
report. For these reasons, the Company will not provide analyst reports through
any means to persons outside of the Company, including posting such information
on its website. The Company may post on its website a complete list, regardless
of the recommendation, of all the investment firms and analysts of which it is
aware who provide research coverage on the Company. If provided, such lists will
not include links to the analysts' or any other third parties' websites or
publications.

CONFERENCE CALLS

A conference call may be held with members of the investment community to
discuss quarterly or annual financial and operating results or major material
corporate developments. The Company will announce the date and time of the
conference call in advance on its website and in a news release containing all
relevant details for participating in or listening to the call. The conference
call may be broadcast simultaneously via webcast over the Internet. The media
and individual investors may call a toll-free number (or access the webcast over
the Internet) and listen to the call on a real-time basis.

At the beginning of the call, a Company spokesperson will provide appropriate
cautionary language with respect to any forward-looking information and will
direct participants to publicly available documents containing the assumptions,
sensitivities and a full discussion of the risks and uncertainties. A tape
recording of the conference call will be made available for a period of

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

at least one month following the call on either a toll-free number or an
archived audio webcast on the Internet, for anyone interested in listening to a
replay.

After the conference call, the CFO, the IRO, the CEO (if he participated in the
conference call) and the General Counsel and Secretary will meet in a debriefing
session. If such debriefing identifies selective disclosure of previously
undisclosed material information, the Company will promptly disclose such
information, generally via news release. Any non-material supplemental
information provided to participants in the conference call will also be posted
on the website for others to view.

DISCLOSURE RECORD

The Company will maintain a file containing all public information about the
Company, including continuous disclosure documents, news releases, analysts'
reports, transcripts or tape recordings of conference calls and newspaper
articles.

The minimum retention period for material corporate information posted on the
website shall be one year. Specifically, news releases shall be kept for a
period of two years, quarterly and annual reports for five years.

TRADING RESTRICTIONS AND BLACKOUT PERIODS

It is illegal for anyone to purchase or sell securities of any public company
with knowledge of material non-public information affecting that company that
has not been publicly disclosed. Except in the necessary course of business, it
is also illegal for anyone to inform any other person of material non-public
information.

INSIDERS, EMPLOYEES, SERVICE PROVIDERS OR THOSE IN A "SPECIAL RELATIONSHIP" (AS
SUCH TERM IS DEFINED IN APPLICABLE SECURITIES LEGISLATION) WITH KNOWLEDGE OF
CONFIDENTIAL OR MATERIAL NON-PUBLIC INFORMATION ABOUT THE COMPANY ARE PROHIBITED
FROM TRADING UNTIL THE INFORMATION HAS BEEN FULLY DISCLOSED AND A REASONABLE
PERIOD OF TIME HAS PASSED FOR THE INFORMATION TO BE WIDELY DISSEMINATED.

QUARTERLY TRADING BLACKOUT PERIODS WILL APPLY TO ALL EMPLOYEES DESIGNATED AS
INSIDERS WHEN FINANCIAL STATEMENTS ARE BEING PREPARED BUT RESULTS HAVE NOT YET
BEEN PUBLICLY DISCLOSED. QUARTERLY BLACKOUT PERIODS FOR INSIDERS WILL COMMENCE
ON THE 15TH DAY FOLLOWING THE END OF A QUARTER (IF SUCH 15TH DAY IS NOT A
WORKING DAY, THE PERIOD WILL COMMENCE ON THE WORKING DAY IMMEDIATELY PRECEDING
THIS 15TH DAY) AND END TWO FULL BUSINESS DAYS FOLLOWING THE ISSUANCE OF A NEWS
RELEASE DISCLOSING QUARTERLY RESULTS.

QUARTERLY BLACKOUT PERIODS WILL ALSO APPLY TO ALL EMPLOYEES DURING PERIODS WHEN
FINANCIAL STATEMENTS HAVE BEEN PREPARED FOR REVIEW BY THE AUDIT COMMITTEE OF THE
BOARD OF DIRECTORS BUT RESULTS HAVE NOT YET BEEN PUBLICLY DISCLOSED. THE
BLACKOUT PERIOD FOR ALL EMPLOYEES COMMENCES THE FIFTH BUSINESS DAY PRIOR TO THE
RELEASE OF THE COMPANY'S QUARTERLY OR ANNUAL FINANCIAL RESULTS AND ENDS TWO FULL
BUSINESS DAYS FOLLOWING THE ISSUANCE OF A NEWS RELEASE DISCLOSING QUARTERLY
RESULTS.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

During a blackout period, an employee or an Insider may, after informing the
General Counsel and Secretary, exercise any options that are due to expire
during the blackout period in question. However, the employee or Insider must
hold the shares received upon the exercise of such options during the remainder
of the blackout period.

Blackout periods may be prescribed from time to time as a result of special
circumstances relating to the Company pursuant to which Insiders of the Company
would be precluded from trading in securities of the Company.

Insiders shall not sell, directly or indirectly, securities of the Company or
its affiliates if the Insider does not own or has not fully paid for the
securities to be sold. An Insider shall not, directly or indirectly, sell a call
or buy a put in respect of a security of the Company or its affiliates.

TO PROTECT THE REPUTATION OF THE COMPANY AND AVOID THE APPEARANCE OF
IMPROPRIETY, ALL DIRECTORS, OFFICERS AND OTHER INSIDERS ARE REQUIRED TO
PRE-CLEAR ALL PROPOSED TRADES IN THE COMPANY'S SECURITIES (INCLUDING THE
EXERCISE OF STOCK OPTIONS) WITH THE GENERAL COUNSEL AND SECRETARY OR OTHER
DESIGNATED OFFICER OF THE COMPANY.

Insiders are personally responsible for filing accurate and timely insider
trading reports.

MAINTAINING CONFIDENTIALITY

Any employee privy to confidential information is prohibited from communicating
such information to anyone else, unless it is necessary to do so in the course
of business. Efforts will be made to limit access to such confidential
information to only those who need to know the information and such persons will
be advised that the information is to be kept confidential.

Communication by e-mail leaves a physical track of its passage that may be
subject to later decryption attempts. All confidential information being
transmitted over the Internet must be secured by the strongest encryption and
validation methods practically available. Where possible, employees should avoid
using e-mail to transmit confidential information.

Outside parties privy to undisclosed material information concerning the Company
will be told that they must not divulge such information to anyone else, other
than in the necessary course of business and that they may not trade in the
Company's securities until the information is generally disclosed. The obtaining
of a signed confidentiality agreement is desirable in these situations.

In order to prevent the misuse or inadvertent disclosure of material
information, the procedures set forth below should be observed at all times:

  1.   Confidential matters should not be discussed in places where the
       discussion may be overheard, such as elevators, hallways, restaurants,
       airplanes or taxis.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

  2.   Confidential documents should not be read in public places and should not
       be discarded where others can retrieve them. Similarly, employees should
       not leave confidential information at their homes or other locations
       outside of their work location.

  3.   Transmission of documents by electronic means, such as by fax or directly
       from one computer to another, should be made only where it is reasonable
       to believe that the transmission can be made and received under secure
       conditions.

  4.   Unnecessary copying of confidential documents should be avoided and
       documents containing confidential information should be promptly removed
       from conference rooms and work areas after meetings have concluded. Extra
       copies of confidential documents should be shredded or otherwise
       destroyed.

  5.   Access to confidential electronic data should be restricted through the
       use of passwords.

  6.   Documents and files containing confidential information should be kept in
       a safe place to which access is restricted to individuals who "need to
       know" that information in the necessary course of business.

  7.   All proprietary information, including computer programs and other
       records, remain the property of the Company and may not be removed,
       disclosed, copied or otherwise used except in the normal course of
       employment or with the prior permission.

INSIDER TRADING

Insider trading is strictly regulated by Part XXI of the TSX Company Manual,
applicable provincial securities legislation such as Section 76 and 134 of the
Ontario Securities Act and the Regulations under the Act and Part XI of the
Canadian Business Corporations Act.

An "insider" is defined in the Ontario Securities Act as every director or
senior officer of a reporting issuer (i.e. the Company), every director or
senior officer of a company that is itself an insider or subsidiary of a
reporting issuer (i.e. Draximage and Draxis Pharma) and any person or company
who beneficially owns, directly or indirectly, voting securities of a reporting
issuer or who exercises control or direction over voting securities of a
reporting issuer or a combination of both carrying more than 10% of the voting
rights attached to all voting securities of that reporting issuer. Similar
definitions apply in other provincial legislation.

Section 76 of the Ontario Securities Act prohibits any person or company in a
"special relationship" with a listed company from trading on the basis of
undisclosed material information on the affairs of that company. Those
considered to be in a "special relationship" with a listed company include those
that are insiders, affiliates or associates of the listed company, a person or
company proposing to make a take over bid of the listed company and a person or
company proposing to become a party to a reorganization, amalgamation, merger or
similar business relationship with the listed company. A person or company in a
"special

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

relationship" also includes those involved, or which were involved, in
the provision of business or professional services for the listed company,
including employees.

The contravention of applicable insider trading regulations and laws is a
serious civil offence and may lead to civil and/or criminal sanction.

Employees are encouraged to discuss any questions or concerns they might have
about insider trading activities with the General Counsel and Secretary of the
Company.

The Company designates all its officers, directors, and certain employees as
insiders or designated insiders for the purpose of compliance with applicable
securities laws. This designation will be reviewed on an annual basis by the
Disclosure and Insider Trading Policy Committee. Such individuals have strict
controls on their ability to trade shares of the Company and have stringent
insider reporting obligations to various Canadian securities commissions. Such
trading restrictions may even continue for a reasonable period of time after an
individual ceases to be an officer, director or employee because of his/her
continued possession of insider information. There may also be times when other
individuals employed by the Company or its affiliates will be deemed by the
Disclosure and Insider Trading Policy Committee insiders for a period of time
(i.e. because of close involvement in a transaction, in-licensing or access to
confidential information not yet publicly disseminated). Those individuals will
be advised of their status at that time by the General Counsel and Secretary of
the Company.

COMMUNICATION AND ENFORCEMENT

All current and new directors, officers, authorized spokespersons and employees
will be advised of this Policy and educated about its importance. This Policy
will be brought to the attention of all employees and directors on an annual
basis.

An employee who violates this Policy may face disciplinary action up to and
including termination of his or her employment with the Company. The violation
of this Policy may also violate certain securities laws. If the Company
discovers that an employee has violated such securities laws, it may refer the
matter to the appropriate regulatory authorities, which could lead to penalties,
fines or imprisonment.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

APPENDIX A - GUIDELINES FOR THE COMPANY WEBSITE

Points to be considered in the evaluation and review of the Company website may
include, but are not limited to the following:

1.     Investor relations material will be contained within a separate section
       of the website and shall include a notice that advises the reader that
       the information posted was accurate at the time of posting, but may be
       superseded by subsequent disclosures. The investor relations portion of
       the Company website should be sufficiently distinct in graphic style
       and/or colours and/or page labelling to ensure users are aware they are
       in the investor relations section.

2.     All factual or material information and data posted to the website,
       including text and audio-visual material, should show the date such
       material was issued and/or posted to the website.

3.     News releases will be posted on the Company's website immediately or as
       soon as possible after notification by the wire service provider of
       dissemination over the news wires.

4.     The Company may post on the investor relations section of its website a
       complete list, regardless of the recommendation, of all the investment
       firms and analysts who provide formal research coverage on the Company.
       The Company may request the approval of analysts to be included on such a
       list. This list, if provided on the website, will not include links to
       the analysts' or any other third party websites or publications.

5.     Links from the Company website to a third party website will include a
       notice that advises the reader that he or she is leaving the Company's
       website and that the Company is not responsible for the contents of the
       other site. The Company will be sensitive to any concerns about the
       endorsement of information on third party websites (over which it has no
       control).

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                                   SCHEDULE D

                               DRAXIS HEALTH INC.

                       CODE OF ETHICS AND BUSINESS CONDUCT

1.     PURPOSE AND SCOPE
It is the policy of Draxis Health Inc. (the "Corporation") to conduct its
business affairs honestly, ethically and in full accordance with the law.
Conduct that may raise questions as to the Corporation's, or any of its
employee's, director's or representative's honesty, integrity, impartiality, or
reputation, or activities that could cause embarrassment to the Corporation or
damage its reputation is prohibited. Any activity, conduct, or transaction that
is or may appear to be unethical, illegal, or improper business conduct must be
avoided.

In this Code, "Corporation" shall also include the subsidiaries of the
Corporation and "Representative" shall mean the Corporation's President and
Chief Executive Officer ("CEO"), Chief Financial Officer ("CFO") or any person
performing similar functions, and any other employee, director, officer or
consultant engaged by the Corporation or its subsidiaries. All Representatives
are subject to this Code. Compliance with this Code is essential to preserving
and enhancing the Corporation's reputation as a responsible corporate citizen
and ultimately in maximizing shareholder value.

Violation of the Code is a serious matter that could subject Representatives or
the Corporation to legal liability and furthermore, in the case of
Representatives who are employees, disciplinary sanctions including termination.
This Code is not meant to be a complete code of ethics and business conduct
covering every eventuality. Consequently, should a Representative be confronted
with a situation where further guidance is required, the matter should be
discussed with designated persons as set forth in section 6 of this Code.

2.     CONDUCT AND BEHAVIOUR
       2.1    Each Representative is accountable for observing rules of conduct
              that are normally accepted as standard in a business enterprise.

       2.2    Representatives shall give precedence to ethical principles and
              obligations in their decisions and actions. They shall respect all
              ethical obligations deriving from applicable laws, acts and
              regulations. Representatives shall not condone unethical conduct.

3.     CONFLICT OF INTEREST
       3.1    It is the policy of the Corporation that transactions with other
              business entities, universities or other organizations and
              individuals shall not be influenced or affected by the personal
              interests or activities of any Representative. Activities or
              personal interests of the Representatives or their immediate
              family members which are actually or potentially harmful or
              detrimental to the best interests of the

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

              Corporation or which create the appearance of a conflict of
              interest should be avoided so as not to reflect negatively on the
              reputation of the Corporation or its Representatives. All
              transactions between the Corporation and its affiliates shall be
              completed on a fair market basis by reference to terms and
              conditions available from arm's length third parties. Any actual
              or apparent conflicts of interest between the Corporation and its
              affiliates shall be resolved on the basis that the Corporation's
              Representatives must act in the best interests of the Corporation.

       3.2    Activities or personal interests of Representatives, including
              those of their immediate family members, which may or could appear
              to influence the objective decisions required in the performance
              of their Corporation responsibilities are considered to be a
              conflict of interest and are prohibited unless a waiver is granted
              by the Corporation's Board of Directors or designated committee in
              accordance with this Code. Such conflicts may create a presumption
              of favouritism or damage the reputation of the Corporation or its
              Representatives in the eyes of others with whom the Corporation
              may transact business, including shareholders and the investment
              community.

       3.3    All Representatives have a responsibility to protect the
              Corporation's assets against loss, theft, abuse and unauthorized
              use or disposal. No Representative of the Corporation may use
              Corporation assets, facilities or positions to promote personal
              interests.

4.     INTEGRITY OF BOOKS AND RECORDS AND COMPLIANCE WITH SOUND ACCOUNTING
       PRACTICES

       4.1    PREPARATION OF BOOKS AND RECORDS

              Accuracy and reliability in the preparation of all business
              records is a critical importance to the decision making process
              and to the proper discharge of financial, legal and reporting
              obligations by the Corporation. All business records, expense
              accounts, invoices, bills, payroll, corporate records and other
              reports are to be prepared with care and honesty. False or
              misleading entries are not permitted in the Corporation's books
              and records.

       4.2    FINANCIAL TRANSACTIONS

              All financial transactions are to be properly recorded in the
              books of account and accounting procedures are to be supported by
              the necessary internal controls. All books and records of the
              Corporation must be available for audit purposes.

              All Representatives responsible for establishing and managing the
              Corporation's financial reporting systems must ensure that:

              (i)    all business transactions are properly authorized;
              (ii)   all records fairly and accurately reflect the transactions
                     or occurrences to which they relate;

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

              (iii)  all records fairly and accurately reflect in reasonable
                     detail the Corporation's assets, liabilities, revenues and
                     expenses;
              (iv)   the Corporation's accounting records do not contain any
                     false or intentionally misleading entries;
              (v)    no transactions are intentionally misclassified as to
                     accounts, departments or accounting periods;
              (vi)   all transactions are supported by accurate documentation in
                     reasonable detail and recorded in the proper account and in
                     the proper accounting period; and
              (vii)  no information is concealed from the CFO or controller, the
                     independent auditors, the Audit Committee or the Board of
                     Directors.

       4.3    RESPONSIBILITIES OF REPRESENTATIVES

              Full, fair, accurate, timely and understandable disclosure in the
              reports and other documents that the Corporation files with, or
              submits to, its regulators and in the Corporation's other public
              communications must comply fully with the Corporation's
              obligations under securities laws and other applicable laws and
              meet expectations of the Corporation's shareholders and other
              members of the investment community.

              The highest standard of care must be exercised in preparing such
              reports, documents and other public communications. In accordance
              with the guidances set forth below, a Representative must:

              (i)    not intentionally cause Corporation documents to be
                     incorrect in any way;
              (ii)   not create or participate in the creation of any records
                     that are intended to conceal anything that is improper;
              (iii)  properly and promptly record or cause to be recorded all
                     disbursements of funds;
              (iv)   co-operate with the CFO, controller and external auditors;
              (v)    report, in accordance with section 6 of this Code, any
                     knowledge of any untruthful or inaccurate statements or
                     records or transactions that do not appear to serve a
                     legitimate commercial purpose;
              (vi)   not make any unusual financial arrangements with a client
                     or a supplier (such as over-invoicing or under-invoicing)
                     for payments on their behalf to a third party;
              (vii)  comply with generally accepted accounting principles at all
                     times. However, technical compliance with GAAP may not be
                     sufficient and, to the extent that technical compliance
                     with GAAP would render financial information that the
                     Corporation reports misleading, additional disclosure will
                     be required;
              (viii) comply with the Corporation's system of internal accounting
                     controls at all times. No action designed to circumvent
                     such controls and procedures will be tolerated; and
              (ix)   comply with the Corporation's disclosure controls and
                     procedures at all times. No action designed to circumvent
                     such controls and procedures will be tolerated.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

5.     COMPLIANCE WITH LAWS, RULES AND REGULATIONS
       5.1    All Representatives are expected to act in full accordance with
              all domestic and foreign laws, rules and regulations applicable to
              the business of the Corporation. Violation of laws, rules or
              regulations or compromise of the Corporation's ethical
              expectations could result in written reprimands or other
              disciplinary action, including termination and criminal or civil
              legal proceedings where applicable.

       5.2    The Corporation is involved, from time to time, in matters which
              are sensitive in nature and important to the Corporation, its
              Representatives and its shareholders. Securities laws impose
              certain obligations on the Corporation regarding the disclosure of
              information to the investing public. To comply with these laws and
              the regulations promulgated thereunder, the Corporation has
              established a Disclosure and Insider Trading Policy which is
              applicable to all Representatives. In addition, the following
              policies and procedures are applicable to all Representatives:

              5.2.1  CONFIDENTIALITY: The Corporation's ability to effectively
                     discharge its disclosure obligations under the securities
                     laws can be adversely affected by the premature or
                     otherwise unauthorized disclosure of internal information
                     relating to the Corporation. All Representatives,
                     therefore, must make every effort to maintain the
                     confidentiality of the Corporation's internal information.
                     These efforts include securely handling and storing all
                     sensitive documents. Representatives should not communicate
                     internal information to friends, family or other third
                     parties, except as may be required in the ordinary course
                     of business.

              5.2.2  DESIGNATED SPOKESPERSON: The Corporation designates a
                     limited number of spokespersons responsible for
                     communication with the media, investors and analysts. The
                     President and CEO, the CFO and the Investor Relations
                     Officer ("IRO") shall be the official spokespersons for the
                     Corporation. Individuals holding these offices may, from
                     time to time, designate others within the Corporation to
                     speak on behalf of the Corporation as back-ups or to
                     respond to specific inquiries from the investment community
                     or the media.

                     Employees who are not authorized spokespersons must NOT
                     respond under any circumstances to inquiries from the
                     investment community or the media unless specifically asked
                     to do so by an authorized spokesperson. All such inquiries
                     shall be referred to the IRO.

                     Except for discussions with business partners by senior
                     management, employees should refrain from discussing
                     confidential and potentially material affairs of the
                     Corporation with third parties, unless expressly authorized
                     to do so.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

              5.2.3  TRADING OF SECURITIES: The Disclosure and Insider Trading
                     Policy of the Corporation sets forth the prohibitions
                     concerning unauthorized trades of the Corporation's
                     securities and other guidelines that must be respected by
                     Representatives with respect to trades of the Corporation's
                     securities.

6.     REPORTING OF CODE VIOLATIONS (WHISTLEBLOWING)
       6.1    Representatives have a responsibility to promptly report any
              conduct or proposed conduct that they reasonably believe to be a
              violation of this Code.

              6.1.1  If a Representative reasonably believes that a violation of
                     the Code has or may occur, they should speak to either:

              (i)    to the Director or Vice President of Human Resources; or
              (ii)   if the Representative is uncomfortable in talking to the
                     Director or Vice President of Human Resources, and only in
                     the case of financial and internal controls and accounting
                     matters, to the Chairman of the Audit Committee of the
                     Board of Directors; or
              (iii)  if the Representative is uncomfortable in talking to the
                     Director or Vice President of Human Resources, and in the
                     case of non-financial matters, to the General Counsel and
                     Secretary;

              In either case, the contacted individual will work with the
              Representative to investigate the concern. In the case of
              financial and internal controls and accounting matters, if the
              alleged violation is reported to the Director or Vice President of
              Human Resources, then that individual will follow the procedures
              stated in Section 6.2.

              Reported violations of this Code will be handled promptly,
              professionally, and with as much confidentiality as possible. All
              reports will be investigated and forwarded to appropriate members
              of management or the Board of Directors for follow up.

              6.1.2  A Representative accused of violating this Code will be
                     given an opportunity to present his or her version of the
                     events at issue. If it has been determined that a
                     Representative has violated this Code, disciplinary
                     measures may be taken against the Representative. Depending
                     on the nature and severity of the violation, disciplinary
                     action may include termination. Certain violations also may
                     require the Corporation to refer the matter to criminal or
                     civil authorities for investigation or prosecution.

              6.1.3  Any supervisor who directs or approves of conduct in
                     violation of this Code, or who has knowledge of such
                     conduct and does not immediately report it, will be subject
                     to disciplinary action, up to and including termination.

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Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

              6.1.4  In the case of an alleged violation by an executive officer
                     or director, the Chairman of the Board of Directors, the
                     CEO and/or the Audit Committee of the Board of Directors,
                     as applicable, are responsible for determining whether a
                     violation has occurred and, if so, what disciplinary
                     measures are appropriate.

       6.2    If a Representative with concerns about questionable accounting,
              or auditing matters chooses to report such concerns to the
              Director or Vice President of Human Resources, then the Director
              or Vice President of Human Resources will forward all concerns to
              the Audit Committee unless the Director or Vice President of Human
              Resources first determines that the allegations are without merit.
              In any event, the Director or Vice President of Human Resources
              will maintain a comprehensive list of all concerns received
              regarding accounting, internal accounting controls, and auditing
              matters and provide it to the Audit Committee each fiscal quarter.

       6.3    The Corporation does not consider reporting a known or suspected
              violation of the Code to be an act of "disloyalty" and it is
              against Corporation policy to retaliate against any Representative
              who reports what he reasonably believes to be a violation or
              suspected violation of this Code. This means that Representatives
              will not be disciplined, fired, or discriminated against in any
              way for voicing concern about a violation or potential violation
              so long as the Representative acts honestly and in good faith. Any
              reprisal or retaliation against a Representative who has in good
              faith reported a known or suspected violation of this Code is
              itself cause for disciplinary action, including termination.

7.     DISCLOSURE & REVIEW

       Compliance with this Code will be monitored by the Board of Directors of
       the Corporation. Where appropriate, either the Nominating and Corporate
       Governance Committee or the Audit Committee of the Board of Directors is
       responsible for granting any waivers of this policy. Any waivers granted
       hereunder to Representatives will be disclosed in a news release
       containing the information prescribed by law.

I have read, understand and agree to comply with the letter and intent of this
Code of Ethics and Business Conduct.

-------------------------------     ------------------------------------
Witness                                        [NAME OF EMPLOYEE]

                                    ------------------------------------
                                                Date

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

TABLE OF CONTENTS

<Table>
<S>                                                                          <C>
1.     EMPLOYMENT.............................................................1

2.     BASE SALARY............................................................1

3.     BENEFITS...............................................................2

4.     STOCK OPTION PLAN......................................................2

5.     DEFERRED SHARE UNIT PLAN...............................................2

6.     DISCRETIONARY BONUS....................................................2

7.     MEMBERSHIPS AND PUBLICATIONS...........................................2

8.     VACATION...............................................................3

9.     EXPENSES...............................................................3

10.    DEDUCTIONS.............................................................3

11.    EMPLOYEE'S COVENANTS...................................................3

12.    CONFIDENTIAL INFORMATION, NON-SOLICITATION AND NON-COMPETITION.........3

              (a)    NON-DISCLOSURE OF CONFIDENTIAL INFORMATION...............3
              (b)    NON-SOLICITATION AND NON-COMPETITION.....................5
              (c)    REASONABLENESS...........................................5
              (d)    BREACH OF AGREEMENT......................................6

13.    TERMINATION OF EMPLOYMENT..............................................6

       (a)    TERMINATION BY DRAXIS FOR CAUSE.................................6
       (b)    TERMINATION BY DRAXIS WITHOUT CAUSE BUT WITH NOTICE.............6
       (c)    TERMINATION BY DRAXIS WITHOUT CAUSE AND WITHOUT NOTICE..........7
       (d)    TERMINATION PAYMENT FOLLOWING A CHANGE OF CONTROL...............7
       (e)    TERMINATION BY DRAXIS WITHOUT CAUSE UPON DISABILITY.............9
       (f)    DEATH...........................................................9
       (g)    RESIGNATION AND RETIREMENT......................................9
       (h)    NO FURTHER NOTICE OR COMPENSATION..............................10

14.    FAIR AND REASONABLE...................................................10

15.    RETURN OF PROPERTY....................................................10

16.    PROVISIONS OPERATING FOLLOWING TERMINATION............................10

17.    ACKNOWLEDGEMENT.......................................................10

18.    SEVERABILITY..........................................................10

19.    NOTICE................................................................10
</Table>

<Page>

Mr. Danny Brazier                                                 April 27, 2004
PERSONAL & CONFIDENTIAL

<Table>
<S>                                                                          <C>
20.    GOVERNING LAW.........................................................11

21.    BENEFIT OF AGREEMENT..................................................11

22.    ENTIRE AGREEMENT......................................................11
</Table>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00066-of-00352.parquet"}]]