Conceptus reports third quarter 1996 financial results.

SAN CARLOS, Calif.--(HealthWire)--Oct. 24, 1996--Conceptus, Inc. (Nasdaq: CPTS) announced today the financial results for the third quarter of 1996. The Company reported record third quarter revenues of $236,000, a 352% increase over the same period last year and a 225% increase over the second quarter of 1996. The Company also reported a net loss of $1,723,000, or $0.19 supplemental loss per share, for the third quarter of 1996, compared with $1,597,000, or $0.34 supplemental loss per share, for the same period last year. The Company also reported revenues for the nine-month period ended September 30, 1996 of $423,000, compared with $193,000 for the same period last year. For the nine months ended September 30, 1996, the Company reported a net loss of $4,817,000, or a $0.56 supplemental loss per share, compared with a net loss of $4,111,000, or a $0.97 supplemental loss per share, for the same period last year.

"This quarter marked a number of important achievements and events in the growth of Conceptus and I am pleased to report significant progress on key internal milestones set forth at the beginning of the year," commented Kathryn Tunstall, President and Chief Executive Officer.

Consistent with its distribution strategy, in July Conceptus signed a marketing agreement with Mallinckrodt Group, Inc. (NYSE: MKG), a leader in the radiology, contrast medium and catheter markets. Mallinkrodt's large direct sales force will exclusively market and distribute Conceptus's Transcervical Tubal Access Catheter (T-TAC) System to hospital centers in the Americas. Conceptus retained the rights to market its products to its primary customer, the center-based interventional gynecologist. During the third quarter, Mallinkrodt's sales force was trained, marketing materials were developed and in mid-September Mallinkrodt's sales activity commenced. During the quarter, Schering Health Care Limited, a leading supplier of reproductive pharmaceuticals and Conceptus's marketing partner in the U.K., increased the base of customers using the T-TAC System through the sponsoring of several well-attended physician training programs.

In September, Conceptus announced the signing of a letter of intent to acquire Microgyn, Inc., a private medical device company, for a combination of cash and stock. Microgyn's lead product is designed to improve both the ease of performance and the margin of patient safety in therapeutic hysteroscopy, a growing, cost-effective alternative to the more than 600,000 hysterectomies performed in the U.S. each year. The acquisition supports Conceptus's strategy to broaden its product offering in order to effectively meet the clinical needs of the interventional gynecologist and increase the efficiency of its direct sales force.

"We have also made progress toward the commercialization of the Selective Tubal Assessment to Refine Reproductive Therapy (STARRT) Falloposcopy System and the Selective Tubal Occlusion Procedure (S/TOP) Sterilization System," added Ms. Tunstall. In September, Conceptus received confirmation from the U.S. Food and Drug Administration (FDA) that its 510(k) submission for a diagnostic application of its STARRT System is the correct regulatory approach and that the agency will not require additional clinical trials. The Company expects to respond to an FDA request for additional information by the end of October.

The Company recently filed an Investigational Device Exemption (IDE) with the FDA to initiate a pre-hysterectomy clinical study of its S/TOP Sterilization System. The S/TOP System is designed to be an alternative to the over five million surgical sterilization procedures performed annually worldwide. The System consists of a microcoil tubal occlusion device that is delivered non-surgically (via the cervix) into the fallopian tube utilizing Conceptus's unique fallopian tube access technology. The study, which is designed to enroll twenty patients in eight centers, involves placing one S/TOP device into each fallopian tube, six to twelve weeks prior to hysterectomy. This is done in order to evaluate in-vivo device stability and the biological mechanism of action. This new study follows the successful completion of 27 cases in a Phase I clinical feasibility study in which the devices were placed just prior to hysterectomy. Another IDE application is expected to be submitted by the end of the year to enable Conceptus to commence in 1997 its first clinical efficacy study of the S/TOP System.

Conceptus, Inc. designs, develops and markets innovative medical devices that provide minimally invasive access to the female reproductive system. The Company's initial focus is on the development of systems to improve the diagnosis and treatment of fallopian tube diseases. The Company is also developing a non-surgical approach to fallopian tube sterilization, the most commonly performed contraceptive procedure worldwide.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. The actual receipt of regulatory approvals and, if obtained, the timing thereof, may differ significantly from the discussion of such matters in the forward-looking statements. In addition, notwithstanding the receipt of any such approvals, the clinical efficacy of and market demand for the Company's products is subject to a number of risks and uncertainties. The principal, but by no means the only, risks and uncertainties applicable to the Company's products and its business in general are set forth in the Company's prospectus dated February 1, 1996, under the heading "Risk Factors." -0-

                          CONCEPTUS, INC.
                   (A development stage company)
                      STATEMENTS OF OPERATIONS
               (In thousands, except per share data)
                            (unaudited)

                            Three Months Ended   Nine Months Ended
                                                   September 30,
                        9/30/96  6/30/96 9/30/95   1996    1995

Net sales                   236     105      67     423     193

Cost of sales               374     235     278     768     714

Gross profit               (138)   (130)   (211)   (345)   (521)

Operating expenses:
     R&D and regulatory     965     915     675   2,668   1,830
     Sales and marketing    763     742     572   2,109   1,304
     General and
      administrative        469     458     253   1,315     701
     Total operating
      expenses            2,197   2,115   1,500   6,092   3,835

Operating loss           (2,335) (2,245) (1,711) (6,437) (4,356)

Interest income & other,
 net                        618     622     124   1,640     277

Interest expense             (6)     (6)    (10)    (20)    (32)

Net loss                 (1,723) (1,629) (1,597) (4,817) (4,111)

Supplemental net loss
 per share               $(0.19) $(0.18) $(0.34) $(0.56) $(0.97)

Shares used in computing
     supplemental net
     loss per share       9,143   9,127   4,707   8,636   4,239


              Condensed Balance Sheet Data
                     (In thousands)

                              September 30,    December 31,
                                  1996            1995
                              (Unaudited)       (Audited)

Cash, cash equivalents and
 short term investments          44,549           5,082
Inventory                           199              54
Trade accounts receivable           229              13
Total current assets             45,356           5,599
PP&E, net                           532             468
Total assets                     45,898           6,092

Accounts payable & accruals         974           1,029
Current portion of debt             141             163
Total current liabilities         1,569           1,192
Long term portion of debt            54             153
Redeemable convertible preferred
 stock                               --          16,624
Accumulated deficit             (16,799)        (11,981)
Stockholders' equity (net
 capital deficiency)             44,275         (11,877)

CONTACT: Conceptus, Inc., San Carlos

Sanford Fitch, Chief Financial Officer, 415/802-7240

or

Burns McClellan, Inc., New York

Ruth Markowitz (investors)

Justin Jackson (media)

212/505-1919