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POZEN Inc. First-Quarter Results Meet Expectations; Initiates Six-Month Mouse Carcinogenicity Study; Announces Positive Results for Mt 400 Study

CHAPEL HILL, N.C., April 30 /PRNewswire/ -- POZEN Inc. (Nasdaq: POZN), a pharmaceutical development company with a portfolio of product candidates for the treatment of migraine, today announced results for the first quarter ended March 31, 2001. The financial performance met management's expectations.

POZEN is a development-stage company that did not record revenues for the first quarter of 2001 or during 2000.

For the first quarter of 2001, the company had operating expenses of $5.0 million compared with $2.7 million for the 2000 first quarter, excluding the non-cash amortization of deferred compensation. The non-cash amortization of deferred compensation in connection with employee stock options grants was $802,000 and $657,000 for the 2001 and 2000 periods, respectively.

POZEN's net loss attributable to common stockholders was $4.5 million, or $0.16 per common share, for the quarter ended March 31, 2001 compared with $3.3 million, or $0.56 per common share, for the 2000 quarter, excluding a charge related to preferred stock sold in March 2000. The charge related to the preferred stock sales was a non-cash charge of $16.9 million that recognized the difference between the deemed fair value of the preferred stock and the fair value of the common stock.

On a pro forma basis that assumes the conversion of all outstanding stock into common stock as of the date of the original issuance, the loss for the first quarter of 2000 would have been $1.36 per common share. Excluding the charge related to preferred stock sold in March 2000, POZEN's pro forma net loss per share would have been $0.22 for the quarter ended March 31, 2000. POZEN's basic and diluted net loss per common share and pro forma net loss per common share are set forth in the following schedule.

John R. Plachetka, Pharm.D., POZEN's chairman, president and chief executive officer, noted that the company's performance was in line with management's expectations. "As we anticipated, our quarter-over-quarter operating expenses were higher due to increased clinical trial activities. We expected that our operating expenses, excluding the non-cash amortization of deferred compensation, would run between $4.5 million and $5.5 million for the quarter, and they fell within that range."

Company Update

POZEN's initial focus is on developing products for migraine therapy, a global market expected to exceed $2.0 billion this year. The company has four products in development. Its lead product candidate, MT 100, is intended to be a first-line, oral treatment. MT 300 is being developed for relief of severe migraine. MT 400 is designed to provide fast and longer-lasting relief for migraine sufferers, while MT 500 is a product candidate for the prophylactic treatment of migraine.

MT 100 has completed all planned Phase III pivotal clinical trials. MT 300 is expected to enter Phase III clinical testing in the third quarter of 2001. MT 400 has completed one Phase II clinical study and MT 500 is in initial clinical trials.

"We continue to be pleased by the clinical performance of MT 100," Dr. Plachetka said. "Because we see a substantial market opportunity with MT 100, we intend to commence at least one additional study that has the potential to expand labeling regarding MT 100's efficacy relative to other approved migraine treatments."

Dr. Plachetka also announced that the FDA has agreed to accept, and POZEN has just initiated, a six-month P53 transgenic mouse carcinogenicity study with MT 100 in lieu of the standard two-year mouse study. Dr. Plachetka added that the company is continuing discussions with the FDA regarding additional carcinogenicity testing requirements.

With respect to MT 400, Dr. Plachetka stated that the data analyses from the 900-patient Phase II study should be completed soon. However, the initial evaluation indicates that the substantial advantage seen with MT 400 over triptan therapy in a pilot study has been confirmed with a high degree of statistical significance.

Dr. Plachetka confirmed that discussions continue with parties interested in commercializing MT 100 and MT 300 with the goal of finalizing a deal during 2001. Dr. Plachetka also noted that POZEN is continuing to evaluate new product opportunities in other therapeutic areas using its "license back" model and continuing to explore the feasibility of new, self-invented combination products.

Dr. Plachetka stated that POZEN believes it has sufficient cash to fund the development of its current product portfolio. "At March 31, 2001 we had $87.7 million in cash and equivalents. For the second quarter, we expect our cash operating expenses will be in the range of $4.5 to $5.5 million. We continue to expect that our cash operating expenses during 2001 will exceed $25 million for the year."

First-Quarter Conference Call

POZEN will hold a conference call to discuss first-quarter results and management's outlook for the year at 11:00 a.m. EDT on Monday, April 30, 2001. The call can be accessed live and will be available for replay over the Internet via www.streetevents.com . A replay will also be available on the company's website, www.pozen.com .

North Carolina-based POZEN Inc. is a pharmaceutical development company committed to building a portfolio of products with significant commercial potential in select therapeutic areas. The company's initial focus is migraine, where it has built a robust portfolio of four product candidates through a combination of innovation and in-licensing. The company's common stock is traded on The Nasdaq Stock Market under the symbol "POZN."

Statements included in this press release that are not historical in nature are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. You should be aware that our actual results could differ materially from those contained in the forward-looking statements, which are based on management's current expectations and are subject to a number of risks and uncertainties, including, but not limited to, our failure to successfully commercialize MT 100 and our other products; costs and delays in the development of MT 100 and our other products; our inability to enter into or maintain, and the risks resulting from our dependence upon, collaboration or contractual arrangements necessary for the development, manufacture, commercialization, marketing, sales and distribution of our products; competitive factors; our inability to protect our patents or proprietary rights and obtain necessary rights to third party patents and intellectual property to operate our business; our inability to operate our business without infringing the patents and proprietary rights of others; general economic conditions; the failure of our products to gain market acceptance; our inability to obtain any additional required financing; technological changes; government regulation; changes in industry practice; and one-time events, including those discussed herein and in our Annual Report on Form 10-K/A under "Management's Discussion and Analysis of Financial Condition and Results of Operations." We do not intend to update any of these factors or to publicly announce the results of any revisions to these forward- looking statements.

                  POZEN is on the Internet at www.pozen.com


                                  POZEN Inc.
                           Statements of Operations
                                 (Unaudited)

                                                     Three Months Ended
                                                           March 31,
                                                    2001            2000
    Operating expenses:
      General and administrative                  $1,502,518       $897,497
      Research and development                     4,256,634      2,415,277
    Total operating expenses                       5,759,152      3,312,774
    Interest income, net                           1,225,692         49,075
    Net loss                                      (4,533,460)    (3,263,699)

    Non-cash preferred stock charge                       --     16,875,115

    Net loss attributable to
      common stockholders                        $(4,533,460)  $(20,138,814)

    Basic and diluted net loss
      per common share                               $(0.16)         $(3.44)

    Shares used in computing basic and
      diluted net loss per common share           27,838,577      5,856,422

    Pro forma net loss per common shares --
      basic and diluted                                $  --        $(1.36)

    Pro forma weighted average common
      shares outstanding--basic and diluted               --     14,822,456


                                  POZEN Inc.
                                Balance Sheet
                                 (Unaudited)

                                                  March 31,     December 31,
                                                     2001           2000
                                      ASSETS
    Current assets:
      Cash and cash equivalents                 $ 87,701,155   $ 92,350,583
      Prepaid expenses                               317,289        198,144
      Accrued interest receivable                      5,764        113,160
      Other current assets                             9,091          9,091
       Total current assets                       88,033,299     92,670,978
    Equipment, net of
      accumulated depreciation                       174,555        158,780
        Total assets                            $ 88,207,854   $ 92,829,758



        LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable                              $449,604       $128,329
      Accrued expenses                             2,337,598      3,633,531
        Total current liabilities                  2,787,202      3,761,860
    Total stockholders' equity                    85,420,652     89,067,898
      Total liabilities and
        shareholders' equity                    $ 88,207,854   $ 92,829,758


CONTACT:
Matt Czajkowski
Chief Financial Officer, of POZEN
+1-919-913-1040
or
General Inquiries
Kathy Brunson of FRB Weber Shandwick
+1-312-640-6696