Columbia Laboratories Reports Second Quarter Results; Company Provides Initial Sales Guidance.

Business Editors/Health & Medical Writers

LIVINGSTON, N.J.--(BUSINESS WIRE)--Aug. 13, 2002

Columbia Laboratories (AMEX: COB) today announced financial results for the second quarter and six months ended June 30, 2002.

For the second quarter of 2002, the company reported a loss of $4,855,498, or $0.14 per share, on sales of $2,225,378, as compared to a net loss of $4,430,124, or $0.14 per share, on sales of $427,554 in the second quarter of 2001. After excluding the one-time charges and credit mentioned in the following paragraph, the loss per share for the three months ended June 30, 2002 would have been $1,344,987 or $0.04 per share, compared with a loss of $3,430,124 or $0.11 per share for the three months ended June 30, 2001.

The second quarter 2002 results reflect a one-time litigation settlement expense of $3,960,000 resulting from the June 2002 settlement of litigation with Ares Trading S.A. and Serono, Inc. As a result of the settlement, the Company reduced operating expenses in the second quarter of 2002 by $449,489, reflecting a reduction in the accrual for product recall costs. The original estimate of $1,500,000 for product recall costs was booked in the first quarter of 2001. The second quarter 2001 results included a one-time restructuring expense of $1,000,000 to record the estimated costs of downsizing the Company's presence outside the United States.

For the six-month period ended June 30, 2002, the net loss was $8,236,441 or $.25 per share on net sales of $2,717,770 as compared to a net loss of $8,249,053 or $.27 per share on net sales of $1,275,369 in the six months ended June 30, 2001.

Over the last several months, Columbia has achieved a number of significant accomplishments including:

-- Resolution of the outstanding litigation with Serono resulting in the reintroduction of Crinone 8% (progesterone gel) to the "Infertility Specialist Market";

-- Securing the rights to market 4% and 8% progesterone gel under a second brand name, "Prochieve(TM)," to a defined audience of obstetricians, gynecologists and primary care physicians in the United States;

-- Signing of an agreement with Quintiles Transnational Corp. to commercialize Prochieve along with Advantage-S(R) and RepHresh Vaginal Gel(TM) through a dedicated team of 55 sales representatives commencing in the second half of 2002;

-- Raising $10.0 million from PharmaBio, Quintiles' strategic investment group, through a Stock Purchase Agreement and an Investment and Royalty Agreement;

-- Filing of a New Drug Application (NDA) with the FDA for testosterone buccal bioadhesive product.

Fred Wilkinson, Columbia's president and chief executive officer, stated, "We are extremely pleased with the progress the Company has made and believe that these achievements create a solid foundation from which to establish a growing revenue base and a future earnings stream."

Columbia is providing initial guidance for the remainder of 2002 through 2004. Based on the launch of Prochieve and RepHresh, and the re-launch of Advantage-S in the U.S., the company estimates sales for 2002 in the range of $12 to 15 million. Assuming a second-half 2003 approval and launch of testosterone buccal bioadhesive product, the company estimates sales for 2003 in the range of $32 to 40 million and sales in 2004 in the range of $75 to 100 million.

Operating expenses are expected to be in the range of $14 to 16 million in 2002, $27 to $31 million in 2003, and $36 to 40 million in 2004. Based on these estimates, profitability is anticipated during the second half of 2003.

These forward-looking statements reflect Columbia Laboratories' expectations as of August 13, 2002, and are being provided so that the Company can discuss its future outlook during its upcoming investor conference call and with investors, potential investors, the media, financial analysts and others. The statements are subject to the cautionary paragraph at the end of this press release. The Company does not intend to update its forward-looking statements until its next quarterly earnings announcement.

Columbia Laboratories, Inc. is an international pharmaceutical company dedicated to research and development of women's health care and endocrinology products, including those intended to treat infertility, dysmenorrhea, endometriosis and hormonal deficiencies. Columbia is also developing hormonal products for men and a buccal delivery system for peptides. Columbia's products primarily utilize the company's patented Bioadhesive Delivery System (BDS) technology.

This press release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of the company and its management team. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Such risks and uncertainties include, among other things, the successful launch and marketing of Prochieve, RepHresh Vaginal Gel and Advantage-S, timely and successful development of products, timely and successful completion of clinical studies, success in obtaining FDA acceptance and approval of new products, including the Company's testosterone buccal bioadhesive product, and competitive economic and regulatory factors in the pharmaceutical and healthcare industry, general economic conditions and other risks and uncertainties that may be detailed, from time-to-time, in Columbia's reports filed with the Securities and Exchange Commission.

             COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                              (unaudited)

                     Six Months Ended             Three Months Ended
                          June 30,                     June 30,
                     2002          2001           2002          2001

NET SALES         $ 2,717,770  $ 1,275,369   $ 2,225,378   $  427,554


COST OF SALES       1,538,840    1,010,597       671,977      485,131
                  -----------  -----------   -----------  -----------

    Gross profit    1,178,930      264,772     1,553,401      (57,577)
                  -----------  -----------   -----------  -----------

OPERATING EXPENSES:
  Selling and
   distribution       836,292      516,909       469,242      254,158

  General and
   administrative   2,275,516    1,912,627     1,091,586    1,151,867

  Research and
   development      2,317,629    3,390,096     1,079,264    1,837,111

  Litigation
   settlement
    expense         3,960,000            -     3,960,000            -

  Product recall
   costs             (449,489)   1,500,000      (449,489)           -

  Corporate
   restructuring
    expense                 -    1,000,000             -    1,000,000

    Total operating
     expenses       8,939,948    8,319,632     6,150,603    4,243,136
                  -----------  -----------   -----------  -----------

    Loss from
     operations    (7,761,018)  (8,054,860)   (4,597,202)  (4,300,713)
                  -----------  -----------   -----------  -----------

OTHER INCOME(EXPENSE):
  Interest
   income              21,689      175,063        11,192       70,219


  Interest
   expense           (405,998)    (377,676)     (217,159)    (188,838)

  Other, net          (91,114)       8,420      (52,329)      (10,792)
                  -----------  -----------   -----------  -----------

                     (475,423)    (194,193)     (258,296)    (129,411)
                  -----------  -----------   -----------  -----------

Net loss          $(8,236,441) $(8,249,053) $ (4,855,498)$ (4,430,124)
                  ===========  ===========  ============ ============


NET LOSS PER COMMON
 SHARE - BASIC
  AND DILUTED       $   (0.25)    $  (0.27)    $   (0.14)   $   (0.14)
                  ===========  ===========  ============  ===========

WEIGHTED AVERAGE
 NUMBER OF COMMON
  SHARES OUTSTANDING:
   BASIC AND
    DILUTED        33,498,703   30,830,000    34,034,705   30,969,453
                  ===========  ===========  ============  ===========


                June 30, 2002  Dec. 31, 2001
                  (unaudited)
                  -----------  -------------
Balance Sheet Data:

Cash and cash
 equivalents    $   3,471,101  $ 4,060,836

Working capital     3,708,628    4,622,083

Total assets       11,262,297    8,560,024

Convertible
 subordinated
  note payable     10,000,000   10,000,000

Stockholders'
 equity
 (deficiency)      (5,238,582)  (3,421,179)