Connetics Enters a Worldwide License Agreement to Develop and Commercialize Its Third Dermatology Product.

PALO ALTO, Calif.--(BW HealthWire)--July 22, 1999--

Connetics Corporation (Nasdaq:CNCT) today announced that it has completed an agreement with Soltec Research Pty Ltd., an Australian company, whereby Connetics has licensed exclusive worldwide rights (excluding Australia and New Zealand) to develop, manufacture and market ketoconazole foam (a quick-break foam formulation of the antifungal dermatologic drug, ketoconazole).

Commenting on the agreement, Thomas G. Wiggans, President and CEO of Connetics said, "Ketoconazole is Connetics' third dermatology product to be formulated in Soltec's innovative foam delivery system. This unique foam technology is an elegant means for topical application of dermatological treatments as compared to other formulations on the market today. The in-license of ketoconazole foam expands our commitment to dermatology and reinforces our enthusiasm for commercializing foam-formulated products. The product, once approved and on the market, will compete in the $500 million annual U.S. topical antifungal market."

In March of this year, the Company launched its first foam dermatology product, Luxiq(TM), for the treatment of moderate scalp dermatoses. The product has received positive feedback from both patients and physicians on its ease of use, elegant nature, and efficacy. Connetics is currently preparing an NDA filing for its second foam product, OLUX(TM), for the treatment of severe scalp dermatoses.

Ketoconazole foam is a quick-break foam formulation of the broad-spectrum, synthetic antifungal agent ketoconazole. Like Luxiq and OLUX, the ketoconazole foam liquefies at body temperature, facilitating the delivery of the active dermatologic agent when applied to the body. The foam formulation has been shown to be easier to apply and less messy than currently marketed dermatologic creams or shampoos. Ketoconazole inhibits the growth of many common dermatophytes and yeasts by altering the permeability of the cell membrane.

About Connetics Corporation

Connetics Corporation, headquartered in Palo Alto, California, specializes in the acquisition, development and commercialization of marketed and late-stage products, primarily in the area of dermatology and rheumatology. For more information about Connetics and its products, please visit Connetics' Web Site at www.connetics.com.

About Soltec Research

Soltec Research Pty Ltd. is wholly owned by Australian company F.H. Faulding & Co. Limited, and is focused on research, development and licensing of innovative products based on its delivery systems for pharmaceutical and consumer chemicals. Commercial successes to date include broad-spectrum sunscreens, human and animal parasite control, infection control, acne therapy, and novel aerosol products. Similar to Soltec's other agreements with Connetics, Soltec will receive milestone payments and royalties on product sales.

This news release may contain forward-looking statements or predictions. These statements represent our judgement as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, those associated with product development, clinical trials, future revenues and profitability, and obtaining marketing approval. These and other factors are discussed in more depth in Connetics' Form 10-K for the fiscal year ended December 31, 1998 and the Company's other filings with the SEC. These documents contain and identify important factors that could cause the actual results to differ materially from those contained in the projections or forward-looking statements.