Albany Molecular Research, Inc. Announces New Relationship with Bristol-Myers Squibb Company.

Business/Medical Editors

ALBANY, N.Y.--(BUSINESS WIRE)--Feb. 19, 2002

Albany Molecular Research, Inc. (NASDAQ: AMRI) today announced it has signed a letter-of-intent with Bristol-Myers Squibb Company (NYSE: BMY) to replace its contract with the former DuPont Pharmaceuticals Company, which was acquired by Bristol-Myers Squibb in October 2001. Negotiations on a final agreement are at an advanced stage and should be completed soon.

Highlights of the new relationship will include:

- A new three-year multi-million dollar agreement between AMRI and
Bristol-Myers Squibb, which continues the drug discovery collaboration first
initiated with DuPont Pharmaceuticals. The final agreement will provide for a
minimum number of FTEs during the three-year period, with the potential to
expand. Under the terms of the letter-of-intent, AMRI will provide
fee-for-service chemistry-based drug discovery and development services in
support of Bristol-Myers Squibb's pharmaceutical R&D programs.

- Termination of the existing contract between AMRI and DuPont Pharmaceuticals,
including the waiver by AMRI of a termination wind-down provision or financial
penalty. Bristol-Myers Squibb will make an up-front payment of $1 million to
AMRI.

- A transfer of intellectual property from Bristol-Myers Squibb to AMRI,
providing AMRI with ownership of one of Bristol-Myers Squibb's late-stage
pre-clinical drug candidates, along with a patent estate in Attention Deficit
Hyperactivity Disorder (ADHD) and central nervous system (CNS) indications
related both to this candidate and patented analogs. Bristol-Myers Squibb will
assign three patent applications to AMRI, which will be free to license the
patent applications to a third-party or to develop the compounds covered by the
patent applications on its own. AMRI intends seek a licensee to develop this
technology.

- AMRI may provide Bristol-Myers Squibb with warrants to acquire common stock
valued at $3 million. AMRI would immediately grant warrants to Bristol-Myers
Squibb valued at $500,000. Thereafter, the additional issuance of warrants
valued at $2.5 million is dependent upon certain conditions being met, such as
AMRI's entering into a contract within eighteen months to license the patent
applications to a third party or a decision by AMRI to continue development on
its own of the compounds covered by the patent applications. Under certain
conditions, AMRI can return the intellectual property to Bristol-Myers Squibb
in lieu of issuing additional warrants.

"The new agreement with Bristol-Myers Squibb consolidates and replaces our former contract with DuPont Pharmaceuticals. This supercedes our November 2001 announcement in which Bristol-Myers Squibb had elected to begin a phased wind-down and termination of our relationship under that contract over a twelve-month period," said Albany Molecular Research, Inc. Chairman and Chief Executive Officer Thomas E. D'Ambra, Ph.D. "We are excited about the potential for longer-term upside from the intellectual property transferred to us from Bristol-Myers Squibb. The addition of this late stage pre-clinical drug candidate and associated patent estate provides further opportunities for AMRI to receive milestone and royalty payments from a third party licensee."

D'Ambra continued, "Although the new relationship significantly reduces from 2001 levels our support of Bristol-Myers Squibb projects, AMRI will receive a take-or-pay minimum level of FTEs through 2004, with the possibility for expansion to greater levels. The new staffing levels commenced on January 16th. We continue to see strong demand in the industry and anticipate being able to rapidly move resources previously committed to DuPont Pharmaceuticals to new projects and relationships. At the same time, and most importantly, we are able to preserve and extend our relationship with Bristol-Myers Squibb, one of the world's leading pharmaceutical companies with a very strong pipeline and R&D enterprise."

Natural Products Discovery Collaboration

In addition, AMRI announced today a new collaborative research and licensing agreement with Bristol-Myers Squibb. The agreement provides Bristol-Myers Squibb with access to Albany Molecular's proprietary lead-seeking natural products extracts and selected chemical libraries, as well as related discovery, analytical, natural products and chemistry technologies.

Under the terms of the agreement, AMRI will provide Bristol-Myers Squibb with up to 80,000 extracts from its Diversity Library and 1,000 compounds from its ChemoFocus Library. Both libraries are components of AMRI's extensive natural products-based collection. Bristol-Myers Squibb will conduct biological testing of these extracts in its proprietary assays and may select extracts for dereplication, purification, isolation and structure elucidation, based on results in its screening assays. For each pure compound further selected by Bristol-Myers Squibb as a development candidate, AMRI may perform hit-to-lead optimization using medicinal chemistry, as well as its proprietary combinatorial biocatalysis technology, microbiology and/or computational chemistry. The research collaboration under the agreement will continue for three years and there is an option for Bristol-Myers Squibb to extend the research collaboration for up to two additional one-year periods.

Specific financial terms were not disclosed, but the contract includes a fee-for-service arrangement and an upfront technology access fee, along with milestones and royalty payments on identified development compounds. Milestone payments to AMRI, if realized, could range anywhere from $500,000 up to $7 million per compound. Royalties, if realized, would be based on annual net sales of each product.

"We are pleased to build on our relationship with Bristol-Myers Squibb," said D'Ambra. "Given the history of the many drugs on the market today developed from natural products, and AMRI's broad collection of microorganisms from around the world, our natural product libraries are an excellent source of chemical diversity for potential new drug leads. We look forward to working with Bristol-Myers Squibb to discover and advance drugs that can be successfully developed and marketed."

AMRI's Diversity Library includes extracts from microorganisms gathered in terrestrial and marine environments around the world. The ChemoFocus Library includes pure biologically derived compounds and natural products modified through combinatorial chemistry.

Albany Molecular Research, Inc. is a chemistry-based drug discovery and development company, focusing on applications for new small molecule prescription drugs. The company conducts R&D projects and collaborates with many leading pharmaceutical, biotechnology and genomics companies, and is developing new chemistry technology for potential prescription drug applications.

Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements may be identified by forward-looking words such as "may," "could," "should," "would," "will," "intend," "expect," "anticipate," "believe" and "continue" or similar words. Readers should not place undue reliance on our forward-looking statements. The company's actual results may differ materially from such forward-looking statements as a result of numerous factors, some of which the company may not be able to predict and may not be within the company's control. Factors that could cause such differences include, but are not limited to (a) the company's ability to attract and retain experienced scientists, (b) trends in pharmaceutical and biotechnology companies outsourcing chemical research and development, (c) the company's ability to take advantage of proprietary technology and expand the scientific tools available to it, (d) the company's performance under the natural products discovery contract, including its ability to achieve success fees, identify development compounds and receive milestone and royalty payments, (e) Bristol-Myers Squibb's continuous utilization of the company's services at levels set forth in the contract and its decision to extend the research collaboration under the natural products discovery contract for up to two additional one-year periods, (f) Bristol-Myers Squibb's continued pursuit of programs under which the company provides services, (g) the company's ability to license to a third party intellectual property acquired from Bristol-Myers Squibb or success in developing the intellectual property itself, (h) the company's ability to timely reallocate resources from the former DuPont Pharmaceuticals contract to other revenue generating contracts, and (i) the company's ability to discover and advance drugs that can be further developed and marketed, as well as those factors discussed in the company's Annual Report on Form 10-K for the year ended December 31, 2000 as filed with the Securities and Exchange Commission on April 2, 2001 and the company's other SEC filings. The company does not undertake any duty to and does not intend to update any forward-looking statements contained in this press release after the date of this press release.