Connective Therapeutics Acquires Rights to Dermatology Product and Novel Delivery Technology; Special Mousse Formulation For Scalp Psoriasis Affecting Over 3 Million Americans.

PALO ALTO, Calif.--(BUSINESS WIRE)--June 24, 1996--Connective Therapeutics, Inc. (Nasdaq: CNCT) today announced that it has completed a license agreement with Soltec Research Pty Ltd., an Australian company, in which Connective has been granted an exclusive license to develop and market betamethasone mousse (a foam mousse formulation of the dermatologic drug, betamethasone valerate) in North America.

The product has been approved in the United Kingdom and is being marketed by Evans Medical Ltd (Medeva PLC) under the brand name Bettamousse(TM) (betamethasone valerate 0.12% w/w mousse). Connective plans to conduct pivotal clinical trials in scalp psoriasis and, if these trials are successful, to submit a New Drug Application for marketing the product in the United States.

Under the agreement with Soltec, Connective will pay Soltec licensing fees and royalties on product sales. As part of the agreement, Connective also has an exclusive option on Soltec's foam mousse system for the delivery of other compounds.

Thomas G. Wiggans, president and chief executive officer of Connective, said, "In-licensing betamethasone mousse supports our objective of establishing early commercialization, as these novel products are expected to form the core of our dermatology franchise." Wiggans added, "Betamethasone mousse will be our fourth product to enter clinical trials, and is highly synergistic with our development and marketing plan for gamma interferon. Assuming timely completion of successful clinical trials, we plan to file for product approval for both products in 1997. We continue to evaluate product opportunities in both dermatology and rheumatology, and intend to acquire additional products to create strong product and market franchises."

Geoff Mullen, director of sales and marketing at Soltec commented, "Our expertise is in innovation, particularly in the area of drug delivery, and we seek to out-license our products to capable development and marketing partners. We are pleased to establish this product and technology collaboration with Connective and are impressed with the company's plans to commercialize its products."

Richard Hammel, Ph.D., vice president of commercial development at Connective said, "Betamethasone mousse received high marks from physicians and patients who previewed this novel foam formulation in United States focus groups. We are very excited about the potential value this formulation could add to patient convenience and compliance. Betamethasone mousse also reinforces our strategic goal of in-licensing late-stage, proprietary products which demonstrate potential for rapid and cost effective market introduction. Along with gamma interferon, Betamethasone mousse provides us with the opportunity to submit two marketing license applications with the FDA in 1997."

Betamethasone mousse is a mousse formulation of betamethasone 17-alpha-valerate, a corticosteroid currently marketed in the U.S. The foam formulation has been shown to liquify when applied to the body, enabling rapid penetration of active dermatologic agent. This formulation has been shown to be easier to apply and less messy than currently marketed scalp lotions and gels.

In addition, the ease of use and patient acceptability may enhance patient compliance. In a comparative clinical trial of betamethasone mousse against placebo in scalp psoriasis patients in the U.K., those patients treated with betamethasone mousse showed statistically significant improvement in erythema (redness), scaling and plaque. The product was well-tolerated and no adverse systemic effects were noted.

Psoriasis, a chronic, recurrent dermatologic disease characterized by inflammation and thickening of the skin, is estimated to affect over 5 million people in the U.S. Scalp psoriasis, a distinct manifestation of psoriasis, is a serious problem for more than 60 percent of psoriatics. Over 1.2 million patients are in treatment at any time in the United States.

Patients with scalp psoriasis suffer from various degrees of erythema, scaling and itching associated with the disease. The disease course typically involves periods of remission followed by acute exacerbations. Current treatment consists of mid-potency steroids in ointment or liquid formulations, neither of which are patient friendly.

Soltec Research Pty Ltd. is an Australian company focused on research, development and licensing of innovative products based on its delivery systems for consumer chemicals. Commercial successes to date include broad spectrum sunscreens, human and animal parasite control, infection control, acne therapy, intensive burn therapy and aerosol antibiotics.

Connective Therapeutics, Inc., headquartered in Palo Alto, California, is focused on the development of novel therapeutics for serious connective tissue disorders. The company has three products in development for six initial indications: gamma interferon for atopic dermatitis and keloids; relaxin for scleroderma and other fibrotic indications; and TCR peptide vaccines for rheumatoid arthritis and multiple sclerosis.

Special Note: This news release contains forward-looking statements that involve risks and uncertainties that could cause actual results or events to differ materially from those in such forward-looking statements. Potential risks and uncertainties include, without limitation, those mentioned in Connective's prospectus dated Jan. 31, 1996 under the heading "Risk Factors" and in Connective's Report on Form 10-Q for the quarter ended March 31, 1996 under the heading "Additional Factors That May Affect Future Results."

CONTACT: Connective Therapeutics, Inc.

Sylvia Wheeler, 415/843-2857