ALZA 1994 Annual Report Discloses New Products in Development, Cites Progress Toward Commercializing Products.

PALO ALTO, Calif.--(BUSINESS WIRE)--March 21, 1995--ALZA Corporation (NYSE:AZA) identified four new products in development and cited progress toward commercializing its own products in the Company's 1994 annual report mailed to stockholders today.

Development of the four new products is funded by Therapeutic Discovery Corporation (TDC), an independent company ALZA founded in 1993 to select and develop, for marketing by ALZA, human pharmaceutical products utilizing proprietary drug delivery technologies. These products include:

-- an OROS (oral controlled-release) product for the treatment of severe, chronic pain;

-- a transdermal system to treat urinary urge incontinence;

-- an Electrotransport Therapeutic System (ETS) to deliver a polypeptide (a biotechnology-based drug that is not effective if administered orally); and

-- a pulmonary system (inhalant) for the treatment of osteoporosis.

As discussed in the annual report, the discovery and development of new human pharmaceutical products funded by TDC using ALZA's proprietary technology is the cornerstone of one of the Company's primary objectives: to generate future revenues by building and commercializing an ALZA-developed product pipeline, thereby increasing ALZA's independence with a source of income that complements the royalties ALZA receives from its client companies. By the end of 1994, more than 20 TDC-funded projects were at various stages of development.

During 1994, ALZA made significant progress commercializing three new products based on its proprietary technologies. In the United States, ALZA's new 50-person sales force launched the Testoderm testosterone transdermal system for use in treating testosterone-deficient men, and ALZA's marketing organization supported Procter & Gamble in launching the Actisite (tetracycline hydrochloride) periodontal fiber, the first site-specific sustained release drug therapy for adult periodontitis. Actisite has been cleared for marketing in 11 countries in addition to the United States; it was recently launched in the U.K. and is marketed in Italy.

ALZA's sales and marketing efforts in the United States were expanded in late 1994 when an agreement was reached with Pfizer Inc for ALZA's sales force to co-promote Glucotrol XL (glipizide), a new controlled-release tablet utilizing ALZA's proprietary OROS technology for the 24-hour control of glucose levels in Type II diabetes patients. ALZA is also co-promoting in the United States the Duragesic fentanyl transdermal system (a long-acting passive transdermal system for the relief of severe, chronic pain in patients requiring opioids) with Johnson & Johnson's subsidiary Janssen Pharmaceutica Inc.

As stated in the report, ALZA expects near-term revenues to be positively affected by sales of, and royalties on, products that were introduced in 1994 or are expected to be introduced by clients in 1995. Longer-term growth is expected to result from successful development and marketing of a number of products now in the TDC product pipeline. In 1994, ALZA signed eight new product development agreements with clients and three agreements that in-licensed technology or patents for product development funded by TDC.

The annual report notes that ALZA technologies have the capability of delivering agents ranging from the oldest traditional drugs to the newest products of biotechnology. The Company therefore is "ideally positioned to match promising molecules of all kinds with the delivery systems that can optimize their pharmacoeconomic values" and thus make an important contribution in the increasingly cost-conscious health care environment.

The annual report also recaps ALZA's 1994 financial performance. As previously reported, net income for the year ended December 31, 1994, was $58.1 million, or $.71 per share, compared to $45.6 million or $.57 per share in 1993. Certain charges and allowances reduced 1993 results. Royalties and fees for products developed by ALZA for client companies increased 9 percent in 1994 to a record $123.7 million.

A copy of the annual report is available from ALZA Corporate and Investor Relations at 1-800-233-5222.

ALZA Corporation is a leading drug delivery systems company that develops, manufactures and markets a broad range of therapeutic systems that improve the medical and economic value of drugs. ALZA's therapeutic systems provide rate-controlled administration of medication.

CONTACT: ALZA Corporation

Dawn Guthart, 415/494-5222 (Media Relations)

Michael Boennighausen, 415/494-5222 (Investor Relations)