Alkermes and Glaxo Wellcome Finalize Pulmonary Drug Delivery Agreement.

Business Editors and Health/Medical Writers

CAMBRIDGE Mass.--(BW HealthWire)--June 27, 2000

Alkermes (NASDAQ:ALKS) today announced the signing of an agreement with Glaxo Wellcome relating to Alkermes' AIR(TM) pulmonary drug delivery technology. This announcement follows the announcement in February this year on Glaxo Wellcome's election to enter into a License Agreement with Alkermes. Pursuant to the agreement, Glaxo Wellcome will obtain a broad license to the AIR technology for use in the development of multiple product candidates in four specified therapeutic categories in the field of respiratory disease. This agreement follows the completion of an extensive feasibility program conducted by the two companies. The agreement is subject to compliance with the notification requirements under the Hart-Scott-Rodino Antitrust Act of 1976.

In exchange for exclusive worldwide rights to products resulting from the collaboration in up to four specified respiratory disease categories, Glaxo Wellcome will provide Alkermes with development funding, payments based on the achievement of certain milestones and will pay Alkermes a royalty based on sales of such products, if any. Alkermes and Glaxo Wellcome will each have manufacturing rights and obligations, and Glaxo Wellcome has responsibility for conducting clinical trials, securing regulatory approvals and marketing any products on a worldwide basis. In addition, Glaxo Wellcome will purchase shares of Alkermes common stock aggregating less than 1% of Alkermes' outstanding shares. The total economic value of the collaboration is dependent upon the number of products successfully commercialized, if any. Products that may be derived from this collaboration have the potential to provide Glaxo Wellcome with significant product and patent protection benefits.

Alkermes' AIR drug delivery system is based on a novel concept, published in Science magazine in 1997, that relatively large, low density drug particles can be inhaled into the lungs with high efficiency from simple inhaler devices. These particles have distinct physical characteristics with several potential advantages over other inhalation delivery systems. The AIR system: (i) utilizes a small, convenient delivery device, (ii) can deliver a wide range of drug doses, and (iii) has the potential to provide sustained release delivery of drugs. Alkermes and its partners are developing product candidates for use in the treatment of respiratory diseases and for the systemic delivery of complex protein drugs.

Alkermes is a leader in the development of products based on sophisticated drug delivery technologies. The Company has several areas of focus: (i) controlled, sustained release of injectable drugs lasting several days to several weeks, utilizing its ProLease(R) and Medisorb(R) technologies; (ii) the development of pharmaceutical products based on proprietary pulmonary drug delivery technologies utilizing its AIR technology, (iii) oral delivery of drugs using the RingCap(TM) and DST technologies, and (iv) the delivery of drugs into the brain past the blood-brain barrier, utilizing its Cereport(R) technology. In addition to its Cambridge, Massachusetts headquarters, research and manufacturing facilities, Alkermes operates research and manufacturing facilities in Ohio and a medical affairs office in Cambridge, England.

Certain statements set forth above may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Alkermes believes that such statements are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that: (i) Glaxo Wellcome will not terminate the collaboration, (ii) any products will be developed, manufactured and/or commercialized successfully or (iii) Alkermes will receive significant milestone or development funding as a result of this collaboration.

Alkermes' business is subject to significant risks and there can be no assurance that actual results of the company's development activities and its results of operations will not differ materially from its expectations.

For information with respect to other factors which could cause actual results to differ from expectations, reference is made to the reports filed by the Company with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.