Applied Microbiology reports on key corporate developments at annual meeting of shareholders.

TARRYTOWN, N.Y.--(HealthWire)--Feb. 21, 1996--Applied Microbiology Inc. (NASDAQ:AMBI) informed shareholders at its annual meeting held in New York City that the new strategies that the company initiated in the past year were beginning to show results.

Fredric D. Price, AMBI's president and chief executive officer, reported on developments concerning new product launches, progress with drug candidates, management changes, and updates on corporate partnerships.

New Product Launches

Commenting on the status of the company's first Special Dietary Food product, Price said, "Cardia(TM) Salt Alternative is on track for a March 1996 launch. Following a regional launch in several states, we intend to broaden the distribution of the product such that Cardia may be marketed throughout the US by the end of the year. We will begin detailing Cardia to physicians with about 15 representatives and will increase the size of this group as the product is introduced in additional states. We are using national wholesalers and chain drug stores to distribute the product to pharmacies."

Less than a year ago, AMBI established a Special Dietary Foods business unit whose mission is to market food products to patients that aid in the dietary management of diseases. Cardia is intended to be used by hypertensive patients under medical supervision who prefer the taste of salt. More than 50 million people in the US are hypertensive and approximately half of those who have hypertension are under medical supervision. A recent controlled clinical study found that the substitution of Cardia for table salt in the diets of hypertensive patients reduced blood pressure. Data from this study is intended to be presented on March 23 at the Council of Geriatric Cardiology's annual scientific session that precedes the meeting of the American College of Cardiology in Orlando, Florida. In addition, in preclinical studies, unlike table salt, Cardia did not interfere with the effect of antihypertensive drugs."

Price also said, "In January, we began a new double-blind, placebo-controlled clinical trial in 100 hypertensive patients using Cardia as compared to salt. Joel Neutel, MD, Director, Hypertension Cardiovascular Research, Orange County Heart Institute, and Assistant Clinical Professor of Medicine at the University of California at Irvine, is the Principal Investigator of the study and plans to present preliminary results in Orlando on March 23. I am also pleased to report that we initiated a second double-blind, placebo-controlled clinical trial yesterday. This new trial is in 200 hypertensive patients using Cardia as compared to salt in prepared meals as well as in a tabletop form. Paul Whelton, MD, Professor of Medicine at the Johns Hopkins University School of Medicine and Professor of Epidemiology at the Johns Hopkins University School of Hygiene and Public Health is the Principal Investigator of the study. This multi-center trial should be completed by the end of the year."

The company noted that on Feb. 12, 1996 it launched a novel product for the $200 million mastitis control market: Wipe Out(TM) Dairy Wipes -- The One Step Cow Prep(TM). This new product is the subject of a US patent application, and has been shown to be safe and effective in field trials using protocols consistent with those recommended by the National Mastitis Council. Initially, Wipe Out will be sold on a regional basis. The company expects to make the product available throughout the US by the end of 1996. AMBI is using a direct marketing approach to dairy farmers, by passing the traditional system of using distributors. Mastitis infections in lactating dairy cattle cost the US dairy industry more than $2 billion annually as a result of reduced milk quality, yield, and losses due to milk containing antibiotic residues which must be withheld from the market and discarded.

Progress With Drug Candidates

In remarks on the progress that has been made regarding the development of nisin, the company's proprietary antimicrobial drug candidate, Price said, "We are pleased to announce that a clinical study in humans will be initiated shortly using nisin in our ulcer program. In laboratory and in animal trials, nisin has been shown to be capable of eradicating the bacteria that cause most ulcers."

The company also presented timelines for development of three other priority nisin-based development programs: a Phase II trial in lactating dairy cattle with mastitis infections will begin before the middle of this year; a human clinical study for infections of the colon could start as early as the first quarter of 1997; and preclinical studies using a recombinant version of nisin to treat serious hospital-acquired infections will commence in 1997 if trials that use the natural version of the compound continue to show promise.

"There is an urgent need to develop pharmaceutical products to treat serious infections in which bacteria seem to have the upper hand today," said Price. "Nisin is active against a wide variety of disease-causing bacteria and has been shown to be safe in laboratory tests, in preclinical animal studies, and in field trials of cows. We will focus our efforts on nisin-based drug development programs in the areas of: ulcers caused by Helicobacter pylori bacteria; mastitis infections in lactating dairy cattle; infections of the colon; and hospital-acquired infections."

Management Changes

Price announced that Solomon L. Mowshowitz, PhD, has been appointed Vice President Research and Development, Peter E. Herring has been appointed Controller, and Peter Blackburn, PhD, Executive Vice President, has assumed the responsibility to manage AMBI's relationships with corporate partners. Mowshowitz, Herring and Blackburn report to the President & CEO.

"The hiring of Dr. Mowshowitz brings to AMBI a scientist with proven management skills in the area of pharmaceutical research and development," Price said. "Dr. Mowshowitz has extensive experience in a corporate setting, as a consultant, and as an academic, and brings those different perspectives to the company. We are pleased to have attracted such an outstanding individual to AMBI. Under his direction, in-house and outside resources will be focused on fast-tracking the pharmaceutical development programs, including those using recombinant variants of nisin."

For the last five years, Mowshowitz was president of Diligen, a company that provided scientific and commercial consulting services to biotechnology companies as well as to the venture capital community. From 1983 to 1990, Mowshowitz held senior research management positions at three biotechnology companies. From 1970 to 1983, he was Assistant Professor in the Department of Microbiology at the Mt. Sinai School of Medicine in New York. Mowshowitz holds a BA from the University of Pennsylvania and a PhD in biochemistry from the Albert Einstein College of Medicine in New York.

The company also noted that with the launch of Wipe Out and the impending launch of Cardia, it was necessary to create a senior financial management position and to attract a person with extensive financial control experience. Peter E. Herring, Controller, spent 16 years at Pfizer, where he held a series of increasingly important financial management positions in marketing, distribution, and manufacturing divisions. Price said, "Having worked with Peter Herring in the past, I know the creativity and resourcefulness that he brings to his job. As Controller, he will use all of the skills that he has acquired in his previous assignments." Herring holds a BS from the University of Tennessee and an MBA from Vanderbilt University.

"The new set of responsibilities for Dr. Blackburn underscores our commitment to the effort of attracting new corporate partners throughout the world for whom the development of nisin as a drug candidate is a high priority," Price noted. He went on to say, "Dr. Blackburn has been appointed Chair of the Pharmaceuticals Partnership Committee and will represent the company to existing and possible new partners. Given his 10 years of experience working with nisin, he brings an extraordinary understanding of the compound and how it works against disease-causing bacteria."

Blackburn said, "Recent progress in preclinical and toxicology studies combined with nisin's mechanism of action in which the emergence of bacterial resistance appears to be less likely than with other antimicrobial agents, provides encouragement that nisin may be attractive to a partner committed to the area of developing drugs to treat serious infectious diseases."

Updates on Corporate Partnerships

In the U.S., AMBI has an alliance with Astra Merck for the use of nisin to treat ulcers by the eradication of H. pylori. Astra Merck currently markets Prilosec(R), which is the country's fastest growing anti-secretory ulcer medication that had sales in 1995 of $1.36 billion. AMBI and Astra Merck are committed to entering human trials shortly.

AMBI's non-exclusive agreement with SmithKline Beecham Consumer Products for the use of nisin in products such as breath fresheners has been terminated. In addition, the company's agreement with the ConvaTec Division of Bristol-Myers Squibb Co. for the use of nisin as an agent for the treatment of superficial skin infections has also been terminated.

Applied Microbiology sells Food Ingredients in more than 40 countries and is developing Special Dietary Foods and Pharmaceuticals. Its headquarters and pharmaceutical research activities are located in New York and it has food research as well as pharmaceutical and food manufacturing facilities in the United Kingdom.

CONTACT: Applied Microbiology Inc., Tarrytown

Emer Leahy, 914/345-6809

or Peter E. Herring, 914/345-6819