Alliance Pharmaceutical Corp. Announces Fiscal Year 1999 Financial Results.

SAN DIEGO--(BUSINESS WIRE)--Sept. 27, 1999--

Alliance Pharmaceutical Corp. (Nasdaq:ALLP) today reported a net loss of $62.5 million, or $1.89 per share, for the year ended June 30, 1999, compared to a net loss of $33 million, or $1.04 per share, for the year ended June 30, 1998.

The company reported revenues of $8.3 million for 1999, primarily license and research revenue under its license agreement with Schering AG, Germany for Imagent(R). Operating expenses for the year totaled $69 million, compared to $58 million for the year ended June 30, 1998. The increase in operating expenses is primarily attributable to the Imagent Phase 3 clinical trial and the preparation of the Imagent manufacturing facilities for regulatory approval. During the year there were non-cash financing charges of $2.5 million, primarily in connection with the issuance and retirement of convertible preferred stock. The company reported cash and research revenue receivable of approximately $24 million and restricted cash of $5 million at June 30, 1999.

Alliance Pharmaceutical Corp. is a research and development company with three products in late-stage clinical (human) development, each addressing a different medical need. Alliance's principal products are Oxygent(TM), an intravascular oxygen carrier ("blood substitute") intended to reduce the need for donor blood transfusions in surgical patients; LiquiVent(R), an intrapulmonary "liquid ventilation" agent for treatment of acute lung injury and acute respiratory distress syndrome; and Imagent, an ultrasound contrast agent being developed with Schering AG, Germany.

Except for historical information, the matters set forth in this release are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth herein, including the availability of funding for development, the uncertainties associated with the conduct of preclinical or clinical studies and the timing or ability to investigate scientific data. Alliance refers you to cautionary information contained in documents the company files with the Securities and Exchange Commission from time to time, including the last Form 10-K and Form 10-Q, and those risk factors set forth in the most recent registration statement on Form S-3 (File No. 333-76343).

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            ALLIANCE PHARMACEUTICAL CORP. AND SUBSIDIARIES

           SUMMARY OF CONSOLIDATED STATEMENTS OF OPERATIONS


                                                Year Ended
                                                 June 30,
                                          1999             1998

Revenues                              $   8,251,000     $  21,209,000
Operating expenses                      (68,993,000)      (57,970,000)
Imputed interest expense on convertible
 notes                                     (844,000)               --
Investment income and other - net           813,000         3,758,000
Net loss                                (60,773,000)      (33,003,000)
Imputed dividends on Preferred Stock     (1,700,000)               --
Net loss applicable to common shares  $ (62,473,000)    $ (33,003,000)

Net loss per common share:
 Basic and diluted                    $       (1.89)    $       (1.04)
Weighted average shares outstanding:
 Basic and diluted                       33,045,000        31,749,000


                SUMMARY OF CONSOLIDATED BALANCE SHEETS

                                                 June 30,
                                         1999              1998

Cash and short-term investments       $  19,081,000     $  49,855,000
Research revenue receivable               4,875,000         6,847,000
Other current assets                        413,000           694,000
Property, plant and equipment - net      24,621,000        23,087,000
Purchased technology - net               11,361,000        12,880,000
Restricted cash                           5,000,000                --
Other assets - net                          633,000           314,000
   TOTAL                              $  65,984,000     $  93,677,000
Current liabilities                   $  13,360,000     $   8,705,000
Long-term debt                           10,499,000         8,882,000
Stockholders' equity                     42,125,000        76,090,000
 TOTAL                                $  65,984,000     $  93,677,000