Alkermes reports financial results for fiscal year 1996.

CAMBRIDGE, Mass.--(BUSINESS WIRE)--June 21, 1996--Alkermes Inc. (NASDAQ:ALKS) today reported its financial results for the fiscal year ended March 31, 1996. The net loss for the fiscal year ended March 31, 1996 was $13,747,084, or $0.93 per share, compared to a net loss of $11,904,153, or $0.88 per share, for the prior year. At March 31, 1996, Alkermes had total cash and investments of $33.7 million, of which $1.4 million was restricted, versus $25.7 million at March 31, 1995, of which $1.4 million was restricted. During fiscal 1996, Alkermes received approximately $26 million through ProLease collaborations, the issuance of 2.3 million shares of the Company's common stock in September and October 1995 and other financing activities. In May 1996, subsequent to the end of the fiscal year, Alkermes raised approximately $23 million in additional funds from the issuance of 2.3 million shares of the Company's common stock in a direct public offering to a limited number of institutional investors.

Total revenues for the year ended March 31, 1996 were $15,918,526, compared with $13,903,271 for the prior year. Research and development revenues from Alkermes Clinical Partners L.P. (the "Partnership") were $11,182,741 versus $9,277,371 in the prior year. The increased revenues were the result of increased reimbursable costs incurred by the Company. Research and development revenues under collaborative arrangements with unrelated parties were $2,848,510 for the year ended March 31, 1996 compared with $3,049,106 for the prior year. The decrease in such revenue was primarily a result of the completion of the feasibility phase of a collaborative agreement with Boehringer Mannheim GmbH, partially offset by an expanded collaboration with Schering-Plough Corp.

Total operating expenses for the year ended March 31, 1996 included $21,586,316 in research and development expenses and $6,285,700 in general and administrative expenses. This compares with $18,955,347 in research and development expenses and $5,104,062 in general and administrative expenses for the prior year. Research and development expenses were higher in the year ended March 31, 1996 mainly as a result of an increase in the purchase of lab supplies and preclinical and clinical expenses related primarily to the Company's RMP-7 and ProLease programs. General and administrative expenses for the year ended March 31, 1996 were higher primarily as a result of an increase in patent legal costs and other legal costs associated with financing and other transactions and non-cash charges related to the write-down of the Company's investments in the Partnership.

RMP-7 is being developed by Alkermes for the Partnership, a limited partnership which completed a $46 million unit offering in 1992 to develop RMPs. The research and development revenue from the Partnership will end during the quarter ending June 30, 1996. As a result, Alkermes intends to use its own resources to continue to develop RMP-7. Alkermes has the option to purchase the Partnership's technology.

Alkermes Inc. is a leader in the development of sophisticated proprietary drug delivery systems that target opportunities emerging from the confluence of biotechnology and drug delivery. Alkermes' core technologies are: (1) ProLease for controlled, sustained release of protein and peptide-based drugs of biotechnology otherwise given by more frequent injection; (2) Medisorb for injectable sustained release which enables new formulations to be made of more traditional pharmaceutical compounds; and (3) RMP-7 for the delivery of drugs across the blood-brain barrier into the brain. In addition to its Cambridge, Mass. headquarters, Alkermes operates a manufacturing facility in Ohio and a medical affairs office in Cambridge, England.

CONTACT: Alkermes Inc.

Michael J. Landine, 617/494-0171

or

Pearson Communications

Thomas A. Pearson, 610/995-9730

or

Burns McClellan

Reagan Codner, 212/505-1919