Alkermes reports financial results for fiscal year 1997.

CAMBRIDGE, Mass.--(BW HealthWire)--May 23, 1997--Alkermes, Inc. (NASDAQ:ALKS) today reported its financial results for the fiscal year ended March 31, 1997. The net loss for the fiscal year ended March 31, 1997 was $18,797,818 or $1.03 per share, compared to a net loss of $13,747,084, or $0.93 per share, for the prior year. At March 31, 1997, Alkermes had total cash and investments of $90.7 million, of which $1.4 million was restricted, versus $33.7 million at March 31, 1996, of which $1.4 million was restricted. The increase in total cash and investments is primarily the result of the sale by the Company during the year of an aggregate of 4.3 million shares of common stock with net proceeds of approximately $72.6 million.

Total revenues for the year ended March 31, 1997 were $19,826,947, compared with $15,918,526 for the prior year. Research and development revenues under collaborative arrangements with unrelated parties were $15,968,317 for the year ended March 31, 1997 compared with $2,848,510 for the prior year. The increase in such revenue was mainly the result of the funding and milestones achieved under new or expanded collaborative agreements related to the Company's ProLeaseb and Medisorbb technologies. Research and development revenues from Alkermes Clinical Partners, L.P. (the "Partnership") were $1,415,313 versus $11,182,741 for the prior year. The decrease in such revenues was the result of the completion of the funding under the product development agreement with the Partnership during the quarter ended June 30, 1996.

Total operating expenses for the year ended March 31, 1997 included $29,553,988 in research and development expenses and $7,689,625 in general and administrative expenses. This compares with $21,586,316 in research and development expenses and $6,285,700 in general and administrative expenses for the prior year. Research and development expenses were higher in the year ended March 31, 1997 mainly as a result of salary and related benefits and other operating costs associated with the acquisition of the Medisorb technology and certain related assets in March 1996. There was also an increase in the purchase of lab supplies and clinical expenses related primarily to the Company's ProLease and RMP-7(TM) programs, partially offset by a reduction in the costs of preclinical work in the Company's RMP-7 program which was completed during the prior year. General and administrative expenses for the year ended March 31, 1997 were higher primarily as a result of salary and related benefits and other operating costs associated with the acquisition of the Medisorb technology and certain related assets in March 1996, as well as an increase in patent legal costs.

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(TM). The research and development revenue from the Partnership ended during the quarter ending June 30, 1996. Since then, Alkermes has been using and intends to continue 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 products based on sophisticated drug delivery technologies. Alkermes' focus is on two important drug delivery opportunities: (i) controlled, sustained release of injectable drugs lasting several days to several weeks, utilizing its ProLease and Medisorb technologies; and (ii) the delivery of drugs into the brain past the blood-brain barrier, utilizing its RMP-7 technology. In addition to its Cambridge, Massachusetts headquarters, Alkermes operates a manufacturing facility in Ohio and a medical affairs office in Cambridge, England.

CONTACT: Michael J. Landine Investor Relations:

Chief Financial Officer Reagan Codner

Alkermes, Inc. Burns McClellan

[phone] [phone]