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ADVANCED POLYMER SYSTEMS ANNOUNCES SECOND QUARTER 1993 RESULTS

 REDWOOD CITY, Calif., Aug. 11 /PRNewswire/ -- Advanced Polymer Systems Inc. (APS) (NASDAQ: APOS) announced today record revenues for the quarter ended June 30, 1993. Revenues increased by 8 percent to $5,114,000, compared to revenues of $4,739,000 in the second quarter of 1992. The net loss for the quarter was $2,788,000 or 21 cents per share, compared to a net loss of $850,000 or 7 cents per share in the year-ago quarter.
 These financial statements include, for the first time, the results of Premier Inc., a marketing and distribution company specializing in over-the-counter drug and toiletry products, which was acquired on April 2, 1993. The historical financial statements have been restated to include Premier as the combination was accounted for as a pooling of interests.
 Product sales increased 39 percent over the second quarter of the prior year.
 Revenues for the second quarter consisted of $4,176,000 of product sales and $938,000 of licensing fees and royalties, compared with 2,995,000 of product sales and $1,744,000 of licensing fees in 1992.
 Sales of consumer products increased to $2,609,000, aided by the market acceptance of the Exact(TM) acne treatment product which has quickly achieved a top 25 placing out of all acne treatments after being launched in the second half of 1992.
 A 300-percent increase in Microsponge(R) shipments to Scott Paper Co. for their nationally distributed baby wipe product, Baby Fresh(R) with Ultra Guard(R), and to manufacturers of personal care products through the alliance with Dow Corning Co. were mainly responsible for the company's product sales growth.
 The increased loss was primarily due to reduced licensing fees which were of a one-time nature in the prior year, significant clinical trial costs on two new drugs in the final stages of testing, and new product promotional expenditures particularly with respect to the successful launch of the Exact acne cream.
 Research and development expense of $2,171,000 reflected an increase of 132 percent attributable to the costs of the Phase III clinical testing of Tretinoin entrapped in a Microsponge for the treatment of acne, and of Prozone, APS' Melanosponge(R)-based sunscreen.
 Selling, general and administrative expense increased by 13 percent to $2,368,000 due mainly to increased advertising and promotion expenditures supporting the Exact acne treatment product.
 The company had $8,442,000 in cash and marketable securities at June 30, 1993. This is expected to be sufficient to meet the company's near-term cash needs as it continues to fund research and development costs and clinical trials for products requiring FDA approval, as well as the development, introduction and promotion of new consumer products.
 Advanced Polymer Systems develops, manufactures and sells patented Microsponge delivery systems which allow for the controlled release of active ingredients in a programmed manner in the ethical dermatology, cosmetic and personal care areas. Certain of these projects are conducted under the development and licensing arrangements with large companies, others as part of joint ventures in which APS is a major participant, and a number of projects are exclusive to APS.
 ADVANCED POLYMER SYSTEMS INC.
 HIGHLIGHTS -- INCOME STATEMENT
 (Unaudited; in thousands except per share data)
 Three months ended Six months ended
 June 30: 1993 1992 1993 1992
 Product sales $ 4,176 $ 2,995 $ 9,343 $ 7,574
 Licensing fees 938 1,744 1,681 1,945
 Total revenues $ 5,114 $ 4,739 $11,024 $ 9,519
 Cost of sales $ 3,448 $ 2,713 $ 7,229 $ 6,249
 Research and development 2,171 936 3,777 1,893
 Selling, general and
 administrative 2,368 2,089 4,717 3,904
 Operating loss (2,873) (999) (4,699) (2,527)
 Minority interest 0 0 --- 45
 Interest income 187 225 389 349
 Interest expense (76) (75) (151) (151)
 Other income (expense) (13) 0 195 (1)
 Income taxes (expense)
 credit (13) (1) (18) 38
 Net loss $(2,788) $ (850) $(4,284) $(2,247)
 Weighted shares
 outstanding 13,448 12,802 13,447 12,362
 Loss per share $ (0.21) $ (0.07) $ (0.32) $ (0.18)
 HIGHLIGHTS -- BALANCE SHEET
 (In thousands)
 June 30, Dec. 31,
 1993 1992
 Assets
 Cash and marketable securities $ 8,442 $15,886
 Accounts receivable, net 5,182 1,717
 Inventory 7,967 3,712
 Other current assets 569 413
 Total current assets 22,160 21,728
 Property/plant/equipment, net 6,542 6,289
 Pledged long-term marketable
 securities 1,626 1,558
 Other non-current assets 1,364 1,540
 Total assets $31,692 $31,115
 Liabilities and shareholders'
 equity
 Current liabilities $10,504 $ 4,300
 Deferred revenues and other
 liabilities 1,670 3,000
 Long-term debt 3,591 3,672
 Stockholders' equity 15,927 20,143
 Total liabilities and shareholders'
 equity $31,692 $31,115
 -0- 8/11/93
 /CONTACT: Michael O'Connell, chief financial officer, of Advanced Polymer Systems, 415-366-2626; or Heidi A. Flannery, investor relations counsel, of in.ves'com, 503-221-2087, for Advanced Polymer Systems/
 (APOS)


CO: Advanced Polymer Systems Inc.; Premier Inc. ST: California IN: HOU SU: ERN

SB-TM -- SE003 -- 1487 08/11/93 07:50 EDT
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Date:Aug 11, 1993
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