Celtrix Reports Second Quarter Financial Results - Operating Expenses Down 50%; SomatoKine Program On Schedule.

SANTA CLARA, Calif.--(BUSINESS WIRE)--Oct. 25, 1995--For the second quarter ended September 30, 1995, Celtrix Pharmaceuticals, Inc. (Nasdaq: CTRX) reported revenues of $139,000 and a net loss of $2,782,000, or $.20 per share. These results compared with revenues of $1,172,000, which included licensing fees of $990,000 from The Green Cross Corporation, and a net loss of $4,629,000, or $.34 per share, for the same period in 1994.

Operating expenses decreased 50 percent to $3,067,000 for the second quarter ended September 30, 1995, from $6,068,000 for the same quarter in 1994. This was due primarily to the company's restructuring and cost-reduction program implemented in the second half of fiscal 1995. At September 30, 1995, Celtrix had $18.4 million in cash (including restricted cash), cash equivalents and short-term investments.

For the first six months ended September 30, 1995, revenues were $707,000 and the net loss was $5,400,000, or $.39 per share. For the same period last year, revenues were $1,392,000 and the net loss was $9,489,000, or $.74 per share.

"While Celtrix is controlling costs, we are also moving ahead with SomatoKine, our novel IGF-BP3 complex," said Andreas Sommer, Ph.D., Celtrix's president and chief executive officer. "The in- life phase of our formal toxicology studies has been completed, and preliminary results support Celtrix's plan to begin human clinical testing in spring 1996. Our plan is to provide SomatoKine as a hormone replacement therapy for acute nutritional deficiencies due to severe trauma, and for muscle and bone wasting due to chronic illness or aging," he said.

In recent months, three scientific reports on SomatoKine have appeared in peer-reviewed journals. Among them was a cover feature in the April 1995 issue of Bone, comparing the potential advantages of using Celtrix's IGF-BP3 complex versus IGF-I alone to increase cortical bone and lean body mass.

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 target the treatment of acute nutritional deficiencies and muscle wasting. Corporate partner programs extend these opportunities to include osteoporosis, tissue repair and multiple sclerosis.

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                        CELTRIX PHARMACEUTICALS, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                               (In thousands)

                                             September 30,  March 31,
                                                 1995          1995
                                             (unaudited)
ASSETS

Current assets:
Cash, cash equivalents and
 short-term investments                          $18,206      $18,931
Receivables and other current assets                 657          307
Total current assets                              18,863       19,238

Restricted cash                                      191          998

Property and equipment, net                       11,015       12,203
Intangible and other assets, net                   2,096        2,585
                                                 -------      -------
                                                 $32,165      $35,024

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued liabilities          $1,083       $1,480
Current portion of long-term obligations             740          639
Accrued restructuring costs                          306        1,306
Total current liabilities                          2,129        3,425

Deferred rent                                      1,261        1,335
Long-term obligations                                408          828

Stockholders' equity                              28,367       29,436
                                                 -------      -------
                                                 $32,165      $35,024

                       CELTRIX PHARMACEUTICALS, INC.
              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In thousands, except per share amounts)
                               (unaudited)

                            Three Months Ended      Six Months Ended
                              September 30,            September 30,
                               1995    1994            1995     1994

Revenues:
Product sales                 $16      $106             $60     $208
Related party revenue           -         -             420        -
Other revenues                123     1,066             227    1,184
                              139     1,172             707    1,392
Costs and expenses:
Cost of sales                   3        49              18       89
Research and development    2,551     5,122           5,328    9,437
General and administrative    513       897           1,087    1,794
                            -----     -----           -----   ------
                            3,067     6,068           6,433   11,320

Operating loss             (2,928)   (4,896)         (5,726)  (9,928)

Interest income, net          146       267             326      439

Net loss                  $(2,782)  $(4,629)        $(5,400) $(9,489)

Net loss per share         $(0.20)   $(0.34)         $(0.39)  $(0.74)

Shares used in computing
net loss per share         13,719     13,555         13,719     12,816

CONTACT: Celtrix Pharmaceuticals, Inc.

Mary Anne Ribi, 408/988-2500 (VP and CFO)