Alliance Pharmaceutical Corp. Announces Regulatory Submissions for Oxygent and Receipt of Milestone Payment From Baxter.

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SAN DIEGO--(BW HealthWire)--Jan. 17, 2002

Alliance Pharmaceutical Corp. (Nasdaq:ALLP) (Nasdaq:ALLPD) announced today that it has submitted documents to the U.S. Food and Drug Administration (FDA) and to European regulatory authorities regarding resumption of clinical development of Oxygent(TM) (perflubron emulsion).

The regulatory submissions included an Interim Integrated Safety Summary (IISS) containing data from all clinical studies conducted with the product, as well as a new Phase 3 clinical plan. Oxygent, an intravascular oxygen carrier intended to avoid the need for donor blood, is being developed by Alliance in the United States, Canada and Europe in conjunction with Baxter Healthcare Corp.

Following the regulatory submissions, Baxter made an additional investment of $2 million in Alliance convertible preferred stock. The $2 million payment is part of a previously reported $19 million obligation that will be paid to Alliance as certain milestones are met in order for Baxter to maintain its rights to the product.

Oxygent has been evaluated in several clinical studies involving approximately 1,500 subjects. An international Phase 3 study with 492 general surgery patients demonstrated that Oxygent treatment provided a statistically significant reduction and avoidance of donor blood usage. An additional Phase 3 study involving cardiac surgery patients was suspended voluntarily due to certain adverse events. The IISS, which was prepared and reviewed by the companies with input from outside consultants, contains comprehensive analyses of safety data from the cardiac study as well as all other Oxygent clinical trials. The IISS concludes that the adverse events observed in the cardiac surgery trial were not directly related to Oxygent, but resulted from procedures specified in the protocol and other factors related to study conduct.

Accordingly, a new Phase 3 protocol design that does not include the procedures thought to be responsible for the adverse events has been submitted to multi-national regulatory authorities. The proposed pivotal study would involve patients undergoing various types of general surgery in the U.S., Canada and Europe, and would target transfusion avoidance as the endpoint. Additional details regarding the new study design will be provided subsequent to the regulatory authorities' review of the submission.

"The completion of the in-depth safety analysis and the design of a new clinical plan are important steps in moving forward with the clinical development of Oxygent," said Duane J. Roth, chairman and CEO of Alliance. "We are pleased to start the year with these regulatory submissions and continued financial support from Baxter."

Oxygent is a sterile perfluorochemical emulsion that does not contain human or animal blood components. It is universally compatible with all blood types, has a shelf-life of approximately two years and is manufactured in a large-scale facility using commercially available raw materials.

Alliance Pharmaceutical Corp. is developing therapeutic and diagnostic products based on its perfluorochemical and surfactant technologies. Alliance's products are intended primarily for use during acute care situations, including surgical, cardiology and respiratory applications. Imavist(TM), an ultrasound contrast agent awaiting final FDA approval, is being developed jointly by Alliance and Schering AG, Germany. Additional information about the company is available on Alliance's Web site at www.allp.com.

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. 333-72844) and Form S-4 (File No. 333-49676). Alliance is under no obligation (and expressly disclaims any obligation) to update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.