Advanced Magnetics reports first fiscal quarter results.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Jan. 17, 1996--Advanced Magnetics Inc. (AMEX:AVM) today reported a net loss for the first fiscal quarter of 1996 ended Dec. 31, 1995, of $1,925,000 or $(0.28) per share compared to a net loss of $690,000 or $(0.10) per share for the same period in fiscal 1995.

Revenues for the quarter were $527,000 compared to $737,000 for the first quarter in fiscal 1995. Research and development expenses increased 35 percent to $2,161,000 for the first fiscal quarter ended Dec. 31, 1995 compared to $1,598,000 for the same period in fiscal 1995. This increase reflects cost associated with the Phase III human clinical trials for the company's Combidex(TM) contrast agent for use in imaging lymph nodes, liver, spleen and blood vessels. The first fiscal quarter of 1995 reflected a $380,000 credit for the reversal of the purchase of in-process research and development expenses that were expensed in the 1994 fiscal year as part of the company's Combidex transaction with Squibb Diagnostics, a division of Bristol-Myers Squibb Co.

Jerome Goldstein, president and CEO, stated, "the company anticipates improving product revenues and profits as sales of our Feridex I.V.(TM) and GastroMARK(R) contrast agent products expand in the European market and hopefully begin in the United States and Japan after government review. The completion of the first Phase III liver trials for Combidex, in the current quarter, should ameliorate some of the research and development cost pressure in operations."

Advanced Magnetics Inc. is a pharmaceutical company involved in the development and manufacture of magnetic resonance imaging (MRI) contrast agents for diagnosis of cancer and other diseases and antiviral therapeutics for treatment of hepatitis. -0-

                      ADVANCED MAGNETICS INC.
                    CONDENSED INCOME STATEMENT
                    QUARTER ENDED DEC. 31, 1995
                            (UNAUDITED)

                          1995                   1994

Revenues:
 Royalties              $ 75,000                 $ --
 Product sales               ---               55,259
 Interest, dividends
  and net gains on
  sales of securities    451,859              681,986
   Total revenues        526,859              737,245

Cost and expenses:
 Cost of product
  sales                       --               11,050
 Research and
 development expenses  2,160,560            1,597,847
 Credit for purchase of
 in-process research
 and development              --             (380,000)
 Selling, general and
  administrative
  expenses               290,984              315,890
  Total costs
   and expenses        2,451,544            1,544,787

Cumulative effect of
 accounting change           ---              117,540

Net income (loss)    ($ 1,924,685)          ($690,002)

Income (loss) per
 share:                    $(0.28)             $(0.10)

Weighted average number
 of common and common
 equivalent shares      6,756,072            6,717,520

    -0-

                          BALANCE SHEET DATA

                                          12/31/95     09/30/95

Working capital                        $40,386,155  $41,985,100
Total assets                           $48,714,833  $50,843,222
Stockholder's equity                   $47,390,095  $49,071,072

CONTACT: Advanced Magnetics Inc., Cambridge

Jerome Goldstein/Anthony Annese, 617/354-3929