Applied Analytical Industries CEO Frederick Sancilio Talks to The Wall Street Transcript.

NEW YORK--(BUSINESS WIRE)--Dec. 23, 1998--The Wall Street Transcript has published an in-depth interview with Dr. Frederick D. Sancilio of Applied Analytical Industries, Inc. (Nasdaq:AAII), in which he talks at length about his company's future.

He says, "We describe the company as providing a unique service to pharmaceutical companies. The word 'unique' has really been over-used in the contract research organization sector of the market, but in fact this company is unique. We provide what I believe to be the only comprehensive service where we can take a chemical and develop it into a medicine. That requires far more than just having clinical monitoring availability. While AAI has that capability we also have the brick and mortar to physically develop the crude chemical substance along with the sophisticated formula, using an arsenal of proprietary scientific techniques developed over a decade. For your information, the company is 20 years old, much older and established than most of the other providers of service in the industry."

Explaining his company's internal drug development strategy, Dr. Sancilio states, "In general we take the experiences which we've gained over the years in developing various products for companies, and we leverage that experience. We develop low-risk improvements to existing materials and products. Then we license those materials or products to our very best clients in return for very highly profitable royalties and fees. It's important to realize that we don't capitalize our R&D, and therefore our future licensing income is very profitable."

Looking forward, he states, "We expect to continue to gain market share against our competitors, growing at a faster rate than the industry is increasing its outsourcing contribution. We will continue to expect high returns from our internal product development projects and to generate licensing revenues that are in excess of the R&D spent."

To read the complete interview, go to http://www.twst.com/pdf/aaii.pdf. It requires Adobe Acrobat (tm) reader to view the document. The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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