Albany Molecular Research, Inc. Posts 58% Increase in Contract Revenue, 76% Increase in Net Income in First Quarter.

Business Editors

ALBANY, N.Y.--(BUSINESS WIRE)--May 15, 2001

Albany Molecular Research, Inc. (NASDAQ: AMRI) today reported increases in revenue and net income during the quarter ended March 31, 2001.

Total revenue for the first quarter 2001 increased by $7.7 million, or 57%, to $21.2 million. Net contract revenue for the first quarter of 2001 increased by 58% to $12.4 million compared to net contract revenue of $7.8 million during the first quarter of 2000. The quarter ended March 31, 2001 is the 17th consecutive quarter in which the company's contract revenue has increased.

Recurring royalties for the first quarter of 2001 were $8.8 million, a 54% increase over recurring royalties of $5.7 million in the first quarter of 2000. AMRI earns royalties from worldwide sales of the non-sedating antihistamine Allegra(R) (Telfast(R) outside the United States) for patents relating to the active ingredient in Allegra.

Net income for the first quarter of 2001 increased by $3.4 million, or 76%, to $7.8 million, or $0.23 per share on a diluted basis, as compared to net income for the first quarter of 2000 of $4.4 million, or $0.14 per share on a diluted basis.

"The first quarter of 2001 was another strong quarter for AMRI," said Chairman and Chief Executive Officer Thomas E. D'Ambra, Ph.D. "Our chemistry business continues to see strong growth and demand, Allegra royalties continue to exceed expectations, and we continue to strengthen our foundation for the future. In this past quarter, we completed the acquisition of New Chemical Entities, Inc., now known as our Bothell Research Center. We are already seeing benefits from this acquisition in the form of technology access fees included in our recently announced contract with IntraBiotics Pharmaceuticals, as well as the potential for future success-based milestone payments. With this acquisition, our technological capabilities run the gamut from more traditional sources of drug discovery, such as drug discovery sourcing from natural product libraries, to sophisticated modern techniques, including extensive capabilities in combinatorial synthesis and computational chemistry."

FDA Advisory Panel Recommendation

On May 11, 2001, an FDA advisory panel recommended that the prescription allergy drugs Claritin, Allegra and Zyrtec are safe enough to be made available over-the-counter. The panel was assembled as a result of a 1998 request by Blue Cross of California (now Wellpoint Health Networks) that the three top-selling prescription antihistamines be switched to over-the-counter status. The panel's only consideration was whether Claritin, Allegra and Zyrtec have the safety profile for over-the-counter use without a learned intermediary. Although no timetable has been set, the panel's recommendation will now go to the full FDA.

In response to the FDA advisory panel's recommendation, Dr. D'Ambra commented, "Since there are no precedents to cite in this situation, we are not in a position to speculate on the ultimate decision by the FDA, or any potential effect of the FDA's decision. This remains a complex matter with several issues to be resolved, including dosage levels, labeling, use studies and the authority of the FDA. While the outcome of these issues is uncertain, we do feel that they are not likely to be resolved quickly. Regardless of the outcome, Albany Molecular Research will continue to receive royalties on all sales of Allegra, including over-the-counter sales, through the life of our patents." AMRI has licensed a series of patents to Aventis, the manufacturer of Allegra, relating to the manufacture of the active ingredient in Allegra. Those patents expire between the years 2013-2015.

AMRI Chief Financial Officer David P. Waldek issued renewed guidance and EPS estimates for 2001. Said Mr. Waldek, "Based on the strong performance of our business, as well as the growth in worldwide sales of Allegra during the first quarter, we are revising our EPS guidance for the full year of 2001 to a range of $0.96 to $0.98 per diluted share from a range of $0.90 to $0.92 per diluted share. For the second quarter of 2001, we are updating our EPS guidance from a range of $0.23 to $0.24 to a range of $0.24 to $0.25 per diluted share."

First Quarter Highlights

During the first quarter of 2001, AMRI added nine new customers, renewed or expanded an additional eight contracts, and added a net of 13 scientists. In addition, AMRI acquired New Chemical Entities, Inc. a chemistry-focused drug discovery company located near Seattle, WA. The acquisition of New Chemical Entities was completed on January 25, 2001. The total number of employees at AMRI's five locations at the end of March 2001 was 384, including 264 scientists.

During the first quarter of 2001, AMRI entered into three customer collaborations which, in addition to fee-for-service revenue, include one or more technology access fees, milestone or royalty provisions. Commenting on those contracts, Dr. D'Ambra stated, "Through our value-added technologies and services, we continue to form more strategic relationships where we can participate in our customers' success through technology access fees, milestones and royalties. One of these agreements is a renewable, two-year research and technology licensing agreement with IntraBiotics Pharmaceuticals for the discovery and development of potential new anti-infective therapies."

IntraBiotics will use AMRI's proprietary drug discovery Diversity Library, Pre-separated Premium Library and associated technologies developed at AMRI's Bothell Research Center to identify compounds that demonstrate antimicrobial or antifungal activity. AMRI will be entitled to royalty payments on any third and subsequent products resulting from the collaboration. IntraBiotics will have an exclusive, worldwide license to develop and commercialize any drugs that emerge from the collaboration.

Total revenues at Organichem Corporation, an unconsolidated affiliate of AMRI, were $16.2 million in the first quarter 2001. As a minority shareholder, AMRI does not include these revenues in its total revenues stated above.

The company also announced preliminary plans to construct an additional facility located across from its headquarters in the City of Albany. AMRI recently purchased two buildings across the street from its 21 Corporate Circle headquarters, at 24 and 26 Corporate Circle, respectively. The initial, conceptual proposal calls for construction of a new, three-story, approximately 200,000 square foot building consisting of laboratory and office space. However, Dr. D'Ambra stressed that the project is in its early planning stages and could change as the proposal progresses. "We are currently in the architectural planning stages and expect to begin construction on the project in early 2002," he said.

The company will hold a conference call at 4:30 p.m. Eastern Time on May 15, 2001 to discuss its quarterly results and business highlights. Individuals interested in listening to the conference call should dial 800-553-0327 (for domestic calls) or 612-332-1020 (for international calls) at 4:15 p.m. and reference the AMRI First Quarter 2001 Earnings Release conference call. Replays of the call will be available for seven days following the call beginning at 8:30 p.m. on May 15, 2001. To access the replay by telephone, please call 800-475-6701 (for domestic calls) or 320-365-3844 (for international calls) and use access code No. 581403.

AMRI is a leading chemistry research, drug discovery and development company focusing on applications for the life sciences industries. The company performs comprehensive chemistry research for many of the leading pharmaceutical and biotechnology companies and for its own research and development.

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 include, but are not limited to, statements regarding the company's earnings guidance for the second quarter 2001 and for the full year 2001, statements regarding the capabilities of the company's newly acquired Bothell Research Center, statements regarding the development of new technology and receipt of future milestone payments and statements regarding construction of a new Albany, New York facility. The company's actual results may differ materially from such forward-looking statements. Factors that could cause such differences include, but are not limited to, the company's ability to attract and retain experienced scientists, trends in pharmaceutical and biotechnology companies outsourcing chemical research and development, sales of Allegra(R) (including any deviations in estimates provided by Aventis) and the company's receipt of significant royalties from the Allegra license agreement, the possibility that Allegra will be approved by the FDA for over-the-counter sales and the potential adverse effects to the company's licensing revenues as a result of such determination, the company's ability to enforce its intellectual property and technology, the company's ability to take advantage of proprietary technology and expand the scientific tools available to it, the ability of the company's strategic investments and acquisitions, including its Bothell Research Center, to perform as expected, the company's ability to successfully complete its ongoing expansion projects on schedule and integrate acquired companies, and the company's ability to effectively manage its growth, as well as those 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.

                    Albany Molecular Research, Inc.
              Condensed Consolidated Statements of Income
                              (Unaudited)

                                                 Three Months Ended
                                                     March 31,
                                               2001             2000
In thousands, except for per share data
Net Contract Revenue                          $12,405           $7,833
Recurring Royalties                             8,760            5,681
                                               ------            -----
  Total Revenue                                21,165           13,514

Cost of Contract Revenue                        6,878            4,386
Technology Incentive Award                        876              568
Research & Development                            917              418
Selling, General & Administrative               2,558            1,902
                                               ------            -----
  Total Costs                                  11,229            7,274

Income from Operations                          9,936            6,240

Equity Earnings of Unconsolidated Affiliates      312              107

Other Income, Net                               2,133              713
                                               ------              ---

Income before Income Tax Expense               12,381            7,060

Income Tax Expense                              4,589            2,642
                                               ------            -----

Net Income                                     $7,792           $4,418
                                               ======            =====

Weighted Average Basic Shares Outstanding      32,929           29,370
                                               ======           ======

Weighted Average Diluted Shares Outstanding    34,295           30,926
                                              =======           ======

Basic EPS                                       $0.24            $0.15
                                                 ====             ====

Diluted EPS                                     $0.23            $0.14
                                                 ====             ====



                    Albany Molecular Research, Inc.
               Selected Consolidated Balance Sheet Data


            In thousands                    (Unaudited)
                                              March 31,   December 31,
                                                2001         2000

Cash, Cash Equivalents and Investments       $ 132,629   $   152,024
Accounts receivable, net                         9,865         7,952
Royalty receivable                               8,756         7,827
Total current assets                           158,374       171,162
Net property, plant and equipment               35,154        30,914
Total assets                                   249,690       238,566

Current liabilities                             11,373         9,913
Stockholders' equity                           237,335       228,533
Total liabilities and stockholders' equity     249,690       238,566