ALZA Announces Second Quarter Financial Results.

PALO ALTO, Calif.--(BUSINESS WIRE)--July 19, 1995--ALZA Corporation (NYSE:AZA) today announced net income of $17.5 million or $.21 per common share for the quarter ended June 30, 1995, compared to net income of $14.7 million or $.18 per share for the quarter ended June 30, 1994. Net income for the six months ended June 30, 1995 was $34.5 million or $.42 per common share, compared to $30.4 million or $.37 per common share for the same six months of 1994.

Royalties and fees for the second quarter of 1995 increased to $34.2 million, compared to $28.0 million for the second quarter of 1994, primarily due to royalties on sales of Adalat CR for which ALZA began receiving royalties in the third quarter of 1994. Royalties and fees in the second quarter of 1995 reflect a reduction of more than $2 million resulting from additions to the reserve established in the third quarter of 1994 to account for a potential reduction in royalty income from Procardia XL royalties due to a U.S. patent issued to Bayer AG.

Research and development revenue increased to $23.5 million for the quarter due to increased product development activities undertaken on behalf of Therapeutic Discovery Corporation (TDC). ALZA and TDC currently have more than 20 products in development, and ALZA has an option to license each product developed by TDC for worldwide commercialization.

Net sales for the second quarter of 1995 were slightly lower compared to the corresponding period in 1994, due largely to shipments of launch quantities of Glucotrol XL in the second quarter of 1994. Costs of products shipped were higher in the current quarter than in the same period in 1994, partially due to increased costs associated with the Company's program to assure compliance with FDA regulations for Good Manufacturing Practices.

Interest and other revenue increased by $2.1 million in the second quarter of 1995 due in large part to higher invested cash balances and higher interest rates. This amount also includes co-promotion revenues for Duragesic and Glucotrol XL. Interest expense increased by $1.5 million compared to the prior period reflecting increased outstanding debt resulting from the July 1994 issuance of zero coupon convertible subordinated debentures.

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 for both human and veterinary applications. -0-

                         ALZA Corporation
                  Summary Financial Information
                           (unaudited)
             (In thousands, except per share amounts)

                             Quarter                Six Months
                          Ended June 30,           Ended June 30,

                         1995        1994         1995         1994
Revenues
Royalties and fees   $ 34,230    $ 27,959     $ 68,192     $ 60,808
Research and
 development           23,485      17,401       45,185       31,584
Net sales              19,180      19,743       38,006       37,636
Interest and other      6,110       4,046       11,862        7,286

Total revenues         83,005      69,149      163,245      137,314

Costs and expenses:
Research and
 development           24,144      19,426       46,386       36,325
Costs of products
 shipped               16,738      14,176       33,160       28,018
G & A and marketing     8,398       7,847       16,900       15,957
Interest and other      5,580       4,088       11,175        7,800

Total costs and
 expenses              54,860      45,537      107,621       88,100

Income before income
 taxes                 28,145      23,612       55,624       49,214

Provision for income
 taxes                 10,695       8,864       21,137       18,849

Net income           $ 17,450    $ 14,748     $ 34,487     $ 30,365

Net income per common
 and common equivalent
  share              $    .21    $    .18     $    .42     $    .37

Weighted average
 common & common
  equivalent shares    82,413      82,313       82,401       82,309

                               ALZA Corporation
                      Condensed Consolidated Balance Sheet
                                 (unaudited)
                                (In thousands)

                                     June 30,      Dec. 31,
                                       1995          1994

Cash, cash equivalents and
 short-term investments           $   382,769   $   344,928
Other current assets                  156,614       147,505
Net property, plant and equipment     256,149       245,450
Other assets                           66,737        68,369

Total assets                      $   862,269   $   806,252

Current liabilities               $    51,701   $    55,988
5 1/4% zero coupon convertible
 subordinated debentures              353,303       344,593
Other long-term liabilities            46,168        41,192
Stockholders' equity                  411,097       364,479

Total liabilities and
 stockholders' equity             $   862,269   $   806,252

CONTACT: ALZA Corporation

Bonnie J. Burdett, 415/494-5222