Celtrix raises $14 million in private financing.

SANTA CLARA, Calif.--(BW HealthWire)--April 4, 1997--Celtrix Pharmaceuticals, Inc. (NASDAQ:CTRX) announced today that it has raised $14 million in a private equity placement, primarily from various U.S. and foreign institutional investors.

Celtrix expects to use the funds primarily to advance the clinical development of its lead compound, SomatoKine(R), as well as for general corporate purposes including product manufacturing and working capital.

The private placement consisted of approximately 5.7 million shares of Celtrix common stock, priced at current fair market value. For every two shares of stock issued, the company also issued a three-year warrant to purchase an additional share of Celtrix common stock at 110 percent of current fair market value. The warrants are exercisable only if the shares of stock are held for at least one year.

Celtrix has the right to call the warrants under certain conditions. Management expects that the proceeds from this financing, along with current cash and short-term investments, will be sufficient to fund Celtrix's operations through mid-1998.

"The success of this financing reinforces our enthusiasm for the progress we have made in advancing SomatoKine toward the marketplace," said Andreas Sommer, Ph.D., president and chief executive officer. "During the past few months, we successfully completed three Phase I human clinical studies of SomatoKine, demonstrating not only safety at high doses but also biological activity in a key patient population, the elderly.

"Phase II clinical feasibility studies are currently in progress for our first treatment indication, recovery from hip fracture surgery. Additional treatment targets include severe burns, osteoporosis and wasting diseases associated with cancer, AIDS and other life-threatening conditions."

Celtrix is a biopharmaceutical company developing novel therapeutics for seriously debilitating, degenerative conditions primarily associated with severe trauma, chronic diseases or aging. Company programs are focused on the use of SomatoKine, a novel IGF-BP3 complex, to treat destructive metabolic processes (catabolism) in acute indications such as major surgery and traumatic injury.

Potential chronic indications include osteoporosis and wasting conditions associated with cancer and AIDS. Through strategic alliances with Celtrix, The Green Cross Corporation is developing SomatoKine for the treatment of osteoporosis in Japan, and Genzyme Corporation is developing TGF- beta-2 as part of a comprehensive approach to tissue repair and the treatment of systemic disease.

This press release contains certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may differ materially from the statements made, as a result of various factors, including risks associated with future company research, clinical study results, the regulatory approval process, competitive products and other factors which are listed from time to time in Celtrix's Securities and Exchange Commission (SEC) filings. These forward-looking statements represent Celtrix's judgment as of the date of this news release.

CONTACT: Celtrix Pharmaceuticals Inc.

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