Alliance Pharmaceutical Corp. Announces Third Quarter Financial Results.

SAN DIEGO--(BUSINESS WIRE)--May 13, 1999--

Alliance Pharmaceutical Corp. (Nasdaq:ALLP) today reported a net loss of $15.7 million, or $0.48 per share, for its third fiscal quarter ended March 31, 1999, compared to a net loss of $10.2 million, or $0.32 per share, for the quarter ended March 31, 1998.

The company reported revenues of $1 million, representing research revenue under its license agreement with Schering AG, Germany for Imagent(R). Revenues for the quarter ended March 31, 1998 were $4.3 million, which included research revenue of $2.3 million from affiliates of Johnson & Johnson. Operating expenses for the current quarter totaled $16.9 million, compared to $15.7 million for the 1998 quarter.

The net loss for the nine months ended March 31, 1999 was $43.4 million, or $1.35 per share, on revenues of $7.2 million. This compares to a net loss of $24 million, or $0.76 per share, on revenues of $16.1 million, for the corresponding 1998 period. The company reported cash and short-term investments of $18.8 million at March 31, 1999. As stated previously, the company has filed an S-3 registration statement for the sale of up to 10 million shares of its common stock.

Alliance is a pharmaceutical research and development company focusing on transforming novel scientific discoveries into innovative drug products. Three products based on perfluorochemical technologies are currently in late-stage clinical development: Imagent, an intravenous ultrasound contrast agent being co-developed with Schering AG, Germany, has successfully completed Phase 3 echocardiography studies; Oxygent(TM) (perflubron emulsion), an intravascular oxygen carrier ("blood substitute") is being evaluated in Phase 3 studies with surgical patients; LiquiVent(R) (neat perflubron), an intrapulmonary "liquid ventilation" agent is being assessed in Phase 3 studies to reduce a patient's exposure to the harmful effects of conventional mechanical ventilation.

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 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/A and Form 10-Q, and those risk factors set forth in the recent registration statement on Form S-3 (File No. 333-76343). -0-

            ALLIANCE PHARMACEUTICAL CORP. AND SUBSIDIARIES

           SUMMARY OF CONSOLIDATED STATEMENTS OF OPERATIONS

                  Three Months Ended          Nine Months Ended
                       March 31,                  March 31,
                  1999          1998          1999         1998
                      (Unaudited)                (Unaudited)

Revenues         $1,021,000    $4,331,000    $7,169,000   $16,144,000
Operating
 expenses       (16,872,000)  (15,699,000)  (51,011,000)  (43,203,000)
Other income
 - net              176,000     1,207,000       905,000     3,084,000
Net loss        (15,675,000)  (10,161,000)  (42,937,000)  (23,975,000)
Imputed
 dividend on
 Preferred Stock         --            --      (483,000)           --
Net loss
 applicable to
 common
 shares        $(15,675,000) $(10,161,000) $(43,420,000) $(23,975,000)
Net loss per
 common share:
 Basic and diluted   $(0.48)       $(0.32)       $(1.35)       $(0.76)
Weighted average
 shares
 outstanding:
 Basic and
 diluted         32,550,000    31,946,000    32,202,000    31,657,000


                SUMMARY OF CONSOLIDATED BALANCE SHEETS


                                            March 31,        June 30,
                                              1999             1998
                                          (unaudited)
Cash and short-term investments           $18,778,000     $49,855,000
Research revenue receivable                 3,875,000       6,847,000
Other current assets                          379,000         694,000
Property, plant and equipment - net        23,817,000      23,087,000
Purchased technology - net                 11,740,000      12,880,000
Other assets - net                            646,000         314,000
     TOTAL                                $59,235,000     $93,677,000

Current liabilities                       $20,496,000      $8,666,000
Long-term debt & other                         24,000       8,921,000
Stockholders' equity                       38,715,000      76,090,000
     TOTAL                                $59,235,000     $93,677,000