Stiefel Laboratories, Inc. provides pharmaceutical products of the highest quality worldwide. In this role, we are keenly aware of our position of trust within the healthcare community. Inasmuch as our employees, products and services directly reflect the Stiefel company, we pledge the following:

To operate our company, its laboratories, manufacturing facilities and distribution centers as well as its sales and marketing organization in a manner consistent with the highest principles of business ethics.

Stiefel Laboratories will always endeavour to market products that strictly conform to the highest possible standards of safety, purity and quality.

We will comply with all regulatory, medical and societal regulations, guidelines and standards as a responsible, conscientious corporate citizen.

Educational programs will always project fair balance. We consistently encourage speakers to communicate their true beliefs. In programs sponsored by Stiefel Laboratories, the global perspective will always be presented.

Other programs will be straightforward and open in intent. Programs which are promotionally oriented will be described as such at the onset. Programs intended to enhance professional rapport in a social setting will be likewise open and honest. There is no place at Stiefel for deception of intent under the guise of market research or educational events.

Programs sponsored by Stiefel that involve compensation or amenities to participants will always be consistent with the time and effort required of the participant(s). We earn our business through professionalism, honesty and effort; we will not buy it.

We shall always honestly represent the qualities of our company and our products. We have the confidence in Stiefel Laboratories and its products to demand truth in advertising, both from ourselves and from others.

Everyone at Stiefel Laboratories is expected to pursue this philosophy and these guidelines. As a world-wide marketer of pharmaceutical products, this is our commitment to the dermatology profession, healthcare providers, the pharmaceutical industry and to the patients they serve.

The above guidelines, and each of the elements set forth below, shall be in compliance with the Pharmaceutical Research and Manufacturers of America's Code on Interactions with Health Care Professionals the ("PhRMA Code") as well as the principles set forth by the International Federation of Pharmaceutical Manufacturers and Associations. Consistent with the PhRMA Code, Stiefel shall not provide promotional materials, items or access to activities to an individual medical or health care professional in California in excess of $1,750 in any year, consistent with the restrictions and subject to the exclusions of Section 119402 of the California Health and Safety Code. Stiefel observes the guidance of the American Medical Association so that we do not put physicians in the position of being encouraged to violate their professional standards. We apply our ethical principles not only to the health care professional relationships that are the focus of the PhRMA Code and government scrutiny, but to all of our business relationships.

Compliance is not new to us; Stiefel Laboratories has consistently conducted its business according to this philosophy. We believe that rules, regulations and systems for monitoring can never be as effective or as important as each individual employee's commitment to ethical conduct. However, we provide our employees with specific rules and procedures so that they may have clear guidance in situations where general principles may not be specific enough to guide their conduct. As a large and growing organization that regularly welcomes new employees, we have systems for monitoring to ensure that our compliant employees, and our company as a whole, are not tainted by those who may be inclined to break the rules. Our Compliance Program therefore includes each of the following elements:

1. Written Standards of Conduct

Stiefel Laboratories, Inc. has, or is in the process of developing, specific policies, procedures and other instructions to guide our employees in each of the following areas:

1. The conduct of research, to ensure fair treatment of research subjects, scientific and practical importance of the data, accuracy and applicability of the results to the needs of our customers;
2. Design of our products, to ensure that we are providing quality products that effectively address the needs of our customers;
3. Manufacturing of our products, to ensure that our customers consistently receive the highest quality products;
4. Marketing of our products, to ensure that medical practitioners and customers are provided with accurate information that does not misrepresent the effectiveness or appropriateness of their use; and
5. Financial reporting, including procedures for determining and paying Medicaid rebates and reporting financial data for each government pharmaceutical program in which the company participates.

2. Establishment of a Compliance Committee and Compliance Office

Stiefel Laboratories, Inc. has established a Compliance Committee comprised of senior managers with both domestic and global responsibilities to oversee our compliance efforts. We included key senior managers from our Executive Committee on the Compliance Committee because it is our commitment to have legal and ethical conduct as an integral part of our operations, not as an after thought. We have established a Compliance Officer position with an initial charge of focusing on our U.S. sales and marketing activities, and the financial accounting associated with our participation in U.S. government programs. Our Compliance Officer and the office she leads are creating an extra level of monitoring and review with regard to these programs to ensure that our business functions in these areas are proper.

3. The development and implementation of regular, effective education and training programs for all affected employees.

We train our sales people to effectively communicate the benefits of our products. By training our people to focus on that accurate, ethical message, we have built a team of employees that naturally conduct themselves according to the rules and the company's ethical principles. Our sales people receive classroom training on sales techniques that includes training on the regulatory guidance and company policies relevant to the situations they face. In addition, we have established a support system of District Managers, Regional Managers as well as District Training Managers that are available to guide our sales people with regard to particular situations. We are in the process of assessing and revising our compliance training programs, and will be increasing the amount of resources committed to ensuring that all employees understand the legal and regulatory requirements, as well as company's policies, applicable to their jobs.

4. Creation and maintenance of effective lines of communication between the Compliance Officer and all employees.

Stiefel Laboratories has introduced the Compliance Officer to the company's employees through presentations at the company's annual national sales meeting, management meetings and training sessions, and e-mail distributions to employees. The Compliance Officer's name, address, e-mail and phone number are all readily available to all employees, and employees were instructed on their option of bringing concerns to the Compliance Officer. The Compliance Officer's office is located in the company's sales and marketing department, conveniently located amidst the sales and marketing, customer service, and contracting management employees. The presentations to employees have included explanations of the company's policy of protecting employees bringing forth concerns regarding the legality or ethics of any company activities. Formal written policies are being developed to further ensure that employees are aware of the ability to report concerns, and of their protections if they do so.

5. Development of auditing and monitoring techniques

We achieve compliance not only through discouraging unethical behavior, but through actively ensuring that our financial reporting is accurate and complete. Stiefel Laboratories utilizes a variety of methods to monitor the activities of its employees with regard to possible improper actions which we have determined an employee might be either tempted to take, or might inadvertently take. We track employee expenditures as well as the distribution of our products. We also have an extensive system for monitoring our manufacturing processes. The company is in the process of assessing areas of risk of non-compliance, and bolstering programs to ensure that such risks are reduced.

6. Screening of employment candidates and business partners to ensure that they have not been excluded from participation in federal health care programs

Stiefel Laboratories screens employees and potential business partners to ensure that they have not been excluded from participating in federal health care programs through the use of the List of Excluded Individuals/Entities of the Office of Inspector General, U.S. Department of Health and Human Services.

7.The development of policies and procedures for the investigation of identified instances of non-compliance and misconduct

Stiefel Laboratories has always taken any allegation of wrongdoing made against the company or any of its employees very seriously, and has always had a policy of thoroughly investigating any such allegation. Stiefel Laboratories is in the process of revising and documenting its policies and procedures for the review of allegations of illegal or unethical behavior.

ETHICAL CODE OF CONDUCT

Stiefel Laboratories will develop, manufacture, market, promote, advertise and sell products in the United States of America (the "U.S.") in full compliance with all U.S. Food and Drug Administration ("FDA") requirements and all U.S. federal health care program requirements, including but not limited to all government contracting and price reporting requirements. All references in this Code to "Stiefel" include Stiefel Laboratories, Inc. and all its U.S. subsidiaries, including but not limited to Glades Pharmaceuticals and.

This Ethical Code of Conduct is intended to describe the principles that ensure the safe use of our products and protect the best interests of patients, families, doctors, nurses and other health care providers. Stiefel's officers, directors, employees, independent dealers, distributors, contractors and agents are expected to comply with this Ethical Code of Conduct and follow the laws and regulations of the countries in which Stiefel conducts its business. In this Code, the term "Stiefel associates" describes all those persons and companies. This Ethical Code of Conduct supplements the Stiefel Mission Statement, the Stiefel Employee Handbook, and all other policies and procedures applicable to Stiefel's officers, directors and employees.

All Stiefel associates must promptly report suspected violations of this Ethical Code of Conduct to the Compliance Department. When reporting an issue, Stiefel associates can choose to remain anonymous. No action will be taken against any individual who reports conduct which he or she honestly believes violates this policy. Stiefel expects honest and ethical conduct from all of its associates in all aspects of its business. Compliance with this Code is a condition of employment and any violations of this Code may result in disciplinary action, up to and including terminations of employment. Violation of this Code by a dealer, distributor, contractor or agent may result in termination of the relationship.

Stiefel Laboratories and the Board of Directors are committed to conduct that is in conformance with ethical standards and applicable laws and regulations. That commitment is evidenced by the following:

1. Stiefel promotes honest and ethical conduct, including fair dealing and the ethical handling of conflicts of interest. Each Stiefel employee should avoid placing himself or herself in a situation in which an employee's actions or personal interest may be in conflict (or may appear to be in conflict) with the Company's interest, and as needed, report the situation and remove him or herself from it.
   
   
2. Stiefel promotes compliance with applicable laws, rules and regulations, including the OIG Guidelines, PhRMA Code, PDMA and generally accepted accounting principles.
   
   
3. Stiefel encourages prompt reporting of violations of this Code.
   
   
4. Stiefel deters wrongdoing and creates accountability for the adherence to this Code.
   
   
5. Stiefel is committed to conducting its business affairs in a fair, ethical and legal manner, and expects its employees to do the same. Each employee should strive to deal fairly with Stiefel's customers, suppliers, service provides, competitors and other employees. No employee should take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice. In this regard, Stiefel employees must be mindful of their duty to preserve the confidentiality of the Company's proprietary information and are urged to seek the advice of the Legal Department.
   
   
6. Stiefel requires that all information provided on its behalf to any governmental agency be true and accurate (to the Company's best knowledge) in all material respects at the time provided.
   
   
7. Stiefel's products are reimbursed under federal and state healthcare programs such as, but not limited to Medicaid, Medicare, TriCare, and/or state pharmaceutical assistance programs. Stiefel is committed to conducting the sales and marketing of its products in compliance with the health care fraud and abuse laws.
   
   

Ethical Code of Conduct:

Stiefel and its associates will comply with all laws and regulations applicable to Stiefel, including for example those that govern interactions between Stiefel and healthcare providers and payors. Stiefel and its associates will also place the well-being and best interest of the patient first while appropriately balancing risks and benefits of Stiefel's products.

Stiefel and its associates will adhere to the principles of good clinical practices, good laboratory practices, and good manufacturing practices, as applicable to Stiefel's business.

Stiefel and its associates responsibility will ensure that all Company-based, medically relevant product information is fairly balanced, accurate and sufficiently comprehensive.

Stiefel and its associates will be fully familiar with the laws and regulations that relate to their responsibilities.

Declaration of Compliance:

Stiefel Laboratories, Inc., and its affiliated companies, Glades Pharmaceuticals and , hereby declare that, to the best of our knowledge, and based upon our good faith understanding of the requirements of California law, each of them are in compliance with the Stiefel Laboratories, Inc. Comprehensive Compliance Program and Chapter 8 of Part 15 of Division 104 of the California Health and Safety Code.

/s/ Charles W. Stiefel
Charles W. Stiefel
Chairman of the Board, President and Chief Executive Officer
June 30, 2006

If you would like to have a written copy of Stiefel Laboratories, Inc.'s Comprehensive Compliance Program mailed to you, please call 1-866-283-6146.