Celtrix Reports Fiscal Year-End - Financial Results.

SANTA CLARA, Calif.--(BUSINESS WIRE)--May 16, 1995--For the fiscal year ended March 31, 1995, Celtrix Pharmaceuticals, Inc. (NASDAQ: CTRX) reported revenues of $2,200,000 and a net loss of $20,749,000, or $1.57 per share. These results compare with revenues of $858,000 and a net loss of $17,760,000, or $1.64 per share, for the fiscal year ended March 31, 1994. Fourth quarter revenues were $635,000, and the net loss was $5,120,000, or $0.37 per share, compared with revenues of $271,000 and a net loss of $4,692,000, or $0.39 per share, for the same period in 1994.

Fiscal 1995 revenues increased substantially over fiscal 1994 due primarily to the receipt of licensing fees from The Green Cross Corporation. Expenses also rose for the year due primarily to activities related to the now-discontinued BetaKine (R) ophthalmic program sponsored by the company; production scale-up of SomatoKine (R); and $2,108,000 in costs associated with the company's restructuring during the third and fourth quarters.

"Looking ahead, Celtrix's restructuring and focus on controlling expenses has significantly reduced our cash needs," said Andreas Sommer, Ph.D., Celtrix's president and chief executive officer. "We now have the resources to finance company operations for the next two years."

"We are excited about Celtrix's future prospects and are working aggressively to capture strong market opportunities," Dr. Sommer said. "Our company's focus is primarily on the development of SomatoKine, the novel IGF-BP3 complex showing potential as a hormone replacement therapy. SomatoKine may prove particularly useful for overcoming nutritional deficiency due to severe physical trauma and for treating muscle and bone wasting due to chronic illness or aging," he said. "In addition, we are continuing to pursue the development of BetaKine (TGF-beta-2) through collaborative relationships, as part of a comprehensive approach to tissue repair and the treatment of systemic disease."

At March 31, 1995, Celtrix had $19,929,000 in cash (including restricted cash) and investments. Future sources of additional cash include licensing fees from existing corporate partnerships and an equity investment from Genzyme Corporation which, subject to certain pricing and other parameters, Celtrix has the option to receive in December 1995.

Celtrix is a biopharmaceutical company focused on developing novel therapeutics for the treatment of seriously debilitating, degenerative conditions primarily associated with severe trauma, chronic diseases or aging. Company programs currently target the treatment of acute nutritional deficiencies, muscle wasting and cancer-related diseases. Corporate partner programs extend these opportunities to include multiple sclerosis, tissue repair and osteoporosis.

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-FINANCIAL CHARTS FOLLOW-

                       CELTRIX PHARMACEUTICALS, INC.

                    CONDENSED CONSOLIDATED BALANCE SHEETS
                             (In thousands)

                                                March 31, March 31,
                                                  1995      1994

ASSETS

Current assets:
Cash, cash equivalents and short-term investments  $18,931 $26,950
Receivables and other current assets                   307     542
Total current assets                                19,238  27,492

Restricted cash                                        998     998

Property and equipment, net                         12,203  13,168
Intangible and other assets, net                     2,585   2,431
                                                   $35,024 $44,089

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued liabilities            $1,480  $1,454
Accrued restructuring costs                          1,306      -
Current portion of long-term obligations               639     574
Total current liabilities                            3,425   2,028

Deferred rent                                        1,335   1,484
Long-term obligations                                  828   1,456

Stockholders' equity                                29,436  39,121

                                                   $35,024 $44,089

                          CELTRIX PHARMACEUTICALS, INC.

                   CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                         (In thousands, except per share amounts)

                                 Three Months Ended    Year Ended
                                      March 31,         March 31,
                                  1995     1994     1995      1994
                                   (unaudited)
Revenues:
Product sales                    $  -      $129      $296     $459
Other revenues                    635       142     1,904      399
                                  635       271     2,200      858

Costs and expenses:
Cost of sales                      -         50       134      206
Research and development        3,857     4,305    18,091   16,286
General and administrative        772       713     3,459    2,823
Restructuring costs             1,306        -      2,108        -
                                5,935     5,068    23,792   19,315

Interest income, net              180       105       843      697

Net loss                      $(5,120)  $(4,692) $(20,749) $(17,760)

Net loss per share             $(0.37)   $(0.39)   $(1.57)  $(1.64)

Shares used in
computing net
loss per share                 13,718    11,957    13,255   10,805

CONTACT: Celtrix Pharmaceuticals

Mary Anne Ribi (vice president and chief financial

officer), 408/988-2500