Alliance Pharmaceutical Corp. Receives Proceeds of $15,000,000 Through Private Placement of Common Stock.

Business Editors/Health & Medical Writers

BIOWIRE2K

SAN DIEGO--(BW HealthWire)--Oct. 31, 2001

Alliance Pharmaceutical Corp. (Nasdaq:ALLPD) and (Nasdaq:ALLP) announced today that it has received proceeds of approximately $15,000,000 in conjunction with a private placement of common stock at $3.50 per share to a group of institutional and individual investors.

The investors also received warrants to purchase approximately 4.3 million shares of Alliance common stock at $4.20 per share. The proceeds will be used to seek final U.S. Food and Drug Administration (FDA) approval for Alliance's Imavist(TM) ultrasound contrast agent, to continue the clinical development of the company's intravascular oxygen carrier, Oxygent(TM), and for working capital.

Participants in the private placement include Special Situations Funds and EndPoint Group Late Stage Fund. Roth Capital Partners served as Alliance's placement agent for the transaction.

Alliance is developing therapeutic and diagnostic products based on its perfluorochemical and surfactant technologies. These products are intended primarily for use during acute care situations, including surgical, cardiology, and respiratory applications.

Imavist is anticipated to provide more detailed images of the heart than can be achieved with standard (non-contrast) ultrasound imaging. Enhanced images of the heart may allow better detection of cardiac abnormalities such as structural and functional defects, and may help patients receive proper treatment quickly without more extensive testing.

The FDA has reviewed a New Drug Application for Imavist and found it to be approvable upon satisfactory response to issues identified in the review process. Alliance recently submitted documentation to the FDA that it believes fully addresses these issues, and the company is therefore expecting final approval and permission for marketing Imavist in the United States.

Imavist is also being evaluated in a clinical study designed to determine whether contrast-enhanced ultrasound imaging can improve detection of prostate cancer. The study, which will involve 300 adult men with suspected prostate cancer, is being conducted at Thomas Jefferson University Hospital, Philadelphia, and is funded by the U.S. Department of Defense.

Oxygent is being developed to reduce the need for donor blood during surgery and other situations of acute blood loss. Approximately 8 to 10 million surgeries are performed worldwide each year during which the patient requires transfusions of donor blood. Ongoing blood shortages and safety concerns provide an opportunity for products that impact either safety or supply. Oxygent is formulated from a synthetic raw material (emulsified perflubron) and does not contain any human or animal blood components. Perflubron is a perfluorochemical that is available at pharmaceutical-grade purity and industrial quantities and can be manufactured into the final product using a simple, efficient, high-yield and cost-effective process.

Imavist is being developed jointly by Alliance and Schering AG, Germany. Alliance is developing Oxygent in the United States, Canada, and Europe in conjunction with Baxter Healthcare Corp. 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. 333-47032) 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.