Columbia Laboratories Reports Third Quarter 2004 Financial Results.

LIVINGSTON, N.J. -- Columbia Laboratories, Inc. (NASDAQ:CBRX) today announced financial results for the third quarter and nine months ended September 30, 2004.

Highlights of the quarter included:

--Net sales of $5.1 million, a 9.2% increase from second quarter 2004 levels.

--Loss per share improved to $0.14 from a loss of $0.16 in second quarter 2004.

--Positive data from a pilot study of Prochieve(R) 8% (progesterone gel) suggested use of Prochieve 8% and estradiol with clomiphene citrate more than doubled pregnancy rates versus clomiphene citrate alone.

--Positive results of a Phase III study of Striant(R) (testosterone buccal system) published in the Journal of Clinical Endocrinology and Metabolism.

--Strengthened Board of Directors with election of Edward Blechschmidt and Stephen Kasnet.

--FDA approval to disseminate information to the OB/GYN community providing evidence that vaginally administered progesterone may reduce the risk of preterm delivery in women at high risk.

--Executed Mutual Recognition Procedure for Striant, culminating with regulatory approval of Striant in 14 countries in the European Union in October.

Fred Wilkinson, Chairman, President and Chief Executive Officer of Columbia Laboratories, stated, "Our primary objectives during the third quarter of 2004 were to build sales while reducing operating expenses from second quarter 2004 levels. I am pleased to report that we met these goals. Net sales rose 9.2% and expenses were down as well, though only slightly due to higher marketing costs to finalize marketing materials and programs to be used over the next several quarters. During the fourth quarter, our goal is to bring sales and marketing expenses to approximately $4 million while continuing to build net sales."

"Market share for Striant more than doubled to 1.8 percent of new and 1.3 percent of total prescriptions in September (the most recently available monthly data) from 0.84 percent and 0.68 percent, respectively, before the April re-launch. We are encouraged by this trend and are working diligently to capture additional share of the testosterone replacement market."

Wilkinson continued, "The PROTERM study continues to advance with the addition of new patients at all centers. We were, however, disappointed that the pace of patient enrollment slowed somewhat during the second half of the third quarter, and have taken action to accelerate the enrollment process. We recently added two large centers with high delivery rates. We also implemented an aggressive patient and physician recruitment tool in October which we expect will drive more patients to PROTERM centers. We look forward to the positive impact of these initiatives on enrollment, but believe it's prudent to adjust our timeline based on Q3 enrollment rates and now project that patient enrollment will conclude in the middle of 2005. Because a patient enrolls in the study between her 18th and 22nd week of pregnancy, and remains on Prochieve 8% or placebo until delivery, we expect completion of the study before the end of 2005, approximately 17 weeks after enrollment is complete."

"We recently received FDA approval to disseminate a reprint from the American Journal of Obstetrics and Gynecology and other information related to the use of vaginally administered progesterone to reduce the risk of preterm delivery in women at high risk to the OB/GYN audience through our sales force. This program, which we initiated in October, is designed to increase general awareness of this new, but not FDA-approved, use for Prochieve 8%. We will continue to execute this program going forward, within the guidelines of the Food and Drug Administration Modernization Act (FDAMA)."

"For the remainder of 2004, we will maintain our focus on building sales, with a more balanced promotion of Striant and our women's healthcare line of products, while further reducing expenses. We will also continue our business development discussions, with particular emphasis on concluding a partnership for our desmopressin buccal candidate. Finally, we look forward to the EU marketing authorizations and licenses for Striant that will be granted over the coming months, paving the way for broader global commercial availability of this exciting product. I am confident in our ability to execute on our strategies, and look forward to updating you on our progress going forward," concluded Wilkinson.

Financial Overview

For the third quarter of 2004, the Company reported a loss of $5,981,839, or $0.14 per basic and diluted share, on revenues of $5,092,819, as compared to a loss of $ 4,254,547, or $0.11 per basic and diluted share, on revenues of $8,763,957 in the third quarter of 2003. For the second quarter of 2004, the Company reported a loss of $6,603,280, or $0.16 per basic and diluted share.

Net sales for the third quarter of 2004 were $5.1 million, a 41.9% decrease from the third quarter of 2003 that reflects reduced sales of Striant and the Company's women's health products to wholesalers and chain drugstores. Third quarter 2003 revenues included initial stocking of Striant(R) in preparation for the product launch in September 2003. Sales to the Company's marketing partners, which are based on periodic bulk purchase orders and therefore fluctuate from quarter to quarter, were lower in the third quarter of 2004 as well. Net sales increased $428,861, or 9.2%, from the second quarter of 2004.

Gross profit as a percentage of net sales decreased to 57% in the third quarter of 2004 versus 66% in 2003. The decrease is primarily attributable to greater sales of Striant, a higher-margin product, in the 2003 period and the under-absorption of fixed overhead in the third quarter of 2004. The gross profit margin in the second quarter of 2004 was 61%.

Selling and distribution expenses were $5.2 million in the third quarter, a 30.3% decrease from the third quarter of 2003, mainly reflecting decreased sales force costs for promotion of the Company's products in the U.S. and including the reduction of the sales force from approximately 122 persons in the third quarter of 2003 to approximately 80 persons in the third quarter of 2004. Selling and distribution expenses increased $334,763, or 6.9%, from the second quarter of 2004.

General and administration costs increased 27.7%, from third quarter 2003 levels to $1.9 million, primarily due to increases in insurance premiums, non-legal professional fees and salary expense including the hiring of additional administrative personnel subsequent to the third quarter of 2003. General and administration expenses increased $49,290, or 2.7%, from second quarter of 2004 levels.

Research and development costs were $1.0 million, a 66.9% increase over third quarter 2003, predominantly reflecting costs related to the ongoing PROTERM(TM) (PROgesterone Gel for Reducing PreTERM Labor and Delivery) study, which was initiated in November 2003. Research and development costs decreased $423,683, or 29.4%, from the second quarter of 2004. PROTERM is a Phase III, randomized, double-blind, placebo-controlled, multicenter study evaluating the efficacy, safety and tolerability of Prochieve 8% in preventing preterm birth in pregnant women who have had a prior preterm delivery. Positive results from the PROTERM study would support a potential label extension for Prochieve 8%, positioning Columbia to address this sizeable market in which there is significant unmet clinical need. Pregnant women who have had a prior preterm birth and who may wish to participate in the study should visit http://www.centerwatch.com/trials/trial3353.html or http://www.clinicaltrials.gov/ (search word "preterm birth") to learn about, and possibly enroll in, the PROTERM study. Women without internet access may contact Columbia Laboratories directly at [phone].

For the nine-month period ended September 30, 2004, the net loss was $18,839,948 or $0.47 per share on sales of $14,296,456 as compared to a net loss of $13,325,225 or $0.37 per share on sales of $17,289,303 in the nine months ended September 30, 2003.

Columbia had cash and cash equivalents of $21.1 million and accounts receivable of $5.95 million at September 30, 2004. Accounts receivable were $2.5 million higher than at June 30, 2004 because of the timing of sales in the third quarter of 2004. Combining these additional receivables and cash and equivalents, the Company had $23.6 million at the close of the quarter.

Quarterly Conference Call

As previously announced, Columbia Laboratories will hold a conference call on November 4, 2004 at 8:30 AM EST to review financial results of the third quarter and nine months ended September 30, 2004.

Date:                           Thursday, November 4, 2004
    Time:                           8:30 a.m. EST
    U.S./Canada dial-in number:     [phone]
    International dial-in number:   [phone]
    Access passcode:                65687027
    Live webcast:                   www.columbialabs.com, under the
                                     Events tab

A recording of the conference call will be available from 10:30 a.m. EST on November 4, 2004 until 11:59 p.m. EST  November 11, 2004 at 888-286-8010 (U.S.) and 617-801-6888 (International). The replay passcode is 68950124. The webcast will be archived for on-demand listening for one year on Columbia Laboratories Web site, www.columbialabs.com, under the Events tab.

About Columbia Laboratories

Columbia Laboratories, Inc. is a U.S.-based international pharmaceutical company dedicated to the development and commercialization of women's health care and endocrinology products, including those intended to treat infertility, dysmenorrhea, endometriosis and hormonal deficiencies and to prevent preterm birth. Columbia markets Striant(R) (testosterone buccal system) for the treatment of hypogonadism in men, Prochieve(R) 8% (progesterone gel) for progesterone supplementation as part of an Assisted Reproductive Technology treatment for infertile women with progesterone deficiency, and Prochieve(R) 4% (progesterone gel) for the treatment of secondary amenorrhea. Columbia's products and product candidates utilize the Company's bioadhesive drug delivery technology. The Company has developed a buccal delivery system for peptides. For more information, please visit www.columbialabs.com.

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 Columbia and its management team. 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 success of the restructured sales force, the successful marketing of Striant(R), Prochieve(R) 8% and Prochieve(R) 4% in the US; successful marketing of Striant by Ardana Bioscience, Ltd. and Mipharm SpA in their respective European territories as marketing authorizations and licenses are received following the MRP regulatory approvals; the impact of competitive products and pricing; the timely and successful development of products; timely and successful completion of clinical studies; successful enrollment of subjects in, and the outcome of, the PROTERM(TM) study; success in obtaining acceptance and approval of new products by the FDA and international regulatory agencies; successful partnering of the desmopressin buccal candidate; 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 undertakes no obligation to publicly update any forward-looking statements.

Striant(R) and Prochieve(R) are registered trademarks and PROTERM(TM) is a trademark of Columbia Laboratories, Inc.

COLUMBIA LABORATORIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED BALANCE SHEETS

                                          September 30,  December 31,
                                              2004           2003
                                          ------------    -----------
ASSETS                                    (unaudited)
   Current assets-
      Cash and cash equivalents          $ 21,069,291    $ 30,965,517
      Accounts receivable, net              5,950,923       4,780,921
      Inventories                           3,374,820       2,469,224
      Prepaid expenses and other current
       assets                               1,141,608       2,240,920
                                          ------------    -----------
         Total current assets              31,536,642      40,456,582

   Property and equipment, net                873,336         961,995

   Intangible assets, net                         ---         920,418

   Other assets                               161,099         140,654
                                          ------------    -----------
         TOTAL ASSETS                    $ 32,571,077    $ 42,479,649
                                          ------------    -----------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
   Current liabilities-
      Note payable                       $ 10,000,000    $        ---
      Current portion of financing
       agreements                           3,220,717       1,228,865
      Accounts payable                      1,708,176       2,806,236
      Accrued expenses                      1,412,423       2,731,692
                                          ------------    -----------
         Total current liabilities         16,341,316       6,766,793

   Note payable--long-term                        ---      10,000,000

   Deferred revenue                         4,394,956       3,879,618

   Long-term portion of financing
    agreements                             18,096,394      15,746,695
                                          ------------    -----------
         TOTAL LIABILITIES                 38,832,666      36,393,106
                                          ------------    -----------

Stockholders' equity (deficiency)-
   Preferred stock, $0.01 par value;
    1,000,000 shares authorized:
      Series B Convertible Preferred Stock,
       130 shares issued and outstanding in
       2004 and 2003                                 1              1
      Series C Convertible Preferred Stock,
       3,250 shares issued and outstanding
       in 2004 and 2003                             32             32
   Common stock, $0.01 par value;
    100,000,000 authorized:
      41,751,934 and 39,679,381 shares
       issued and outstanding in 2004 and
       2003, respectively                     417,519         396,794
   Capital in excess of par value         168,623,778     162,146,561
   Accumulated deficit                   (175,488,162)   (156,648,214)
   Accumulated other comprehensive income     185,243         191,369
                                          ------------    -----------
      TOTAL STOCKHOLDERS' EQUITY
       (DEFICIENCY)                        (6,261,589)      6,086,543
                                          ------------    -----------
      TOTAL LIABILITIES AND STOCKHOLDERS'
       EQUITY (DEFICIENCY)               $ 32,571,077    $ 42,479,649
                                          ------------    -----------

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

                        Nine months ended        Three months ended
                          September 30,             September 30,
                       2004          2003          2004        2003
                    -----------   -----------   ----------  ----------

NET REVENUES      $14,296,456   $17,289,303   $5,092,819   $8,763,957

COST OF GOODS SOLD  5,685,011     6,838,074    2,182,140    3,023,359
                    -----------   -----------   ----------  ----------
  Gross profit      8,611,445    10,451,229    2,910,679    5,740,598
                    -----------   -----------   ----------  ----------

OPERATING EXPENSES:
  Selling and
   distribution    14,958,153    16,012,352    5,210,005    7,470,881
  General and
   administrative   5,687,018     4,471,313    1,904,281    1,491,025
  Research and
   development      4,072,932     2,198,883    1,016,269      608,885
                    -----------   -----------   ----------  ----------
    Total
     operating
     expenses      24,718,103    22,682,548    8,130,555    9,750,791
                    -----------   -----------   ----------  ----------
    Loss From
     operations   (16,106,658)  (12,231,319)  (5,219,876)  (3,830,193)
                    -----------   -----------   ----------  ----------
OTHER INCOME
 (EXPENSE):
 Interest income      182,321        65,836       63,345       54,388
 Interest expense  (2,206,489)   (1,242,750)    (770,953)    (517,535)
 Loss on sale of
  intangible assets  (577,917)          ---          ---         ---
 Other, net          (131,205)       83,008      (54,355)      38,793
                    -----------   -----------   ----------  ----------
                   (2,733,290)   (1,093,906)    (761,963)    (424,354)
                    -----------   -----------   ----------  ----------
    Net loss     $(18,839,948) $(13,325,225) $(5,981,839) $(4,254,547)
                    -----------   -----------   ----------  ----------

NET LOSS PER
 COMMON SHARE:
(Basic and
 diluted)        $      (0.47) $      (0.37) $     (0.14) $     (0.11)
                    -----------   -----------   ----------  ----------
WEIGHTED AVERAGE
 NUMBER OF COMMON
 SHARES
 OUTSTANDING:      40,726,264    36,689,369   41,751,934   38,795,145
                    -----------   -----------   ----------  ----------
(Basic and diluted)