Cypros Pharmaceutical Reports Fiscal 1998 Results.

CARLSBAD, Calif.--(BUSINESS WIRE)--Sept. 10, 1998--Cypros Pharmaceutical Corp.(AMEX:CYP) reported sales for the year ended July 31, 1998 of $3,445,955, a 42 percent increase over the $2,428,348 in sales reported in the prior year.

Similarly, the gross profit on sales for the year ended July 31, 1998 increased to $2,675,518 from the $1,889,623 reported in the prior year, and the gross profit margin as a percentage of sales remained steady at nearly 78 percent. The company also reported a net loss of $5,572,869 or $.37 per share compared to a loss of $6,674,703 or $.54 per share for the prior year.

Paul J. Marangos, chairman and chief executive officer, commented "In the past fiscal year the company's expanded sales and marketing efforts made an impact on sales. The acquisition of the DIMAC technology and the choice of a manufacturing facility was also a key event, since this drug delivery technology will produce two new products in the near term and more in the future. Cypros Pharmaceutical Corp. reported positive clinical data with Cordox(TM) in the sickle cell indication, and we have received expedited review status with Ceresine in traumatic brain injury."

David W. Nassif, the company's chief financial officer, commented, "We are pleased to have kept our net cash spending rate for the year to $3.9 million and to have $13.4 million in working capital at year-end. The $1.6 million difference between the current year net loss and the net cash spending rate of $3.9 million for the year was attributable in large part to a number of non-cash expense items, such as depreciation and amortization. The decline in year-to-year net loss of more than $1 million was principally due to an increase in gross profit of 42 percent and an 86 percent decline in the amortization of discount and costs on mandatorily convertible notes, which collectively more than offset a 22 percent increase in operating expenses."

Cypros Pharmaceutical Corp. is engaged in the development and marketing of drug products for the hospital market. The company is pursuing a diversified strategy of marketing approved drugs and developing small molecule therapeutics that protect cells from ischemic injury. Ischemia is the number one cause of death in most developed countries.

The company currently has three products on the market, Glofil, Inulin and Ethamolin(R), is preparing to launch two proprietary, extended-release wound-care products; and is developing its two lead drugs, Cordox(TM) and Ceresine(TM), for a variety of ischemic disorders.

This news release contains forward-looking statements which involve risk and uncertainties. Such statements are subject to certain factors which may cause the company's plans to differ. Factors that may cause such differences include, but are not limited to, the risks discussed in the company's Form 10-K for the fiscal year ended July 31, 1997 and the Risk Factors section of the company's Registration Statement No. 33-25661.

                      Cypros Pharaceutical Corp.
                       Statements of Operations

                                               Years Ended July 31,
                                               1998           1997
Net sales                                   $3,445,955     $2,428,348
Cost of sales                                  770,437        538,725
Gross profit                                   2,675,518    1,889,623

Operating expenses:

Sales and marketing                            1,309,963      993,765
General and adminstrative                      3,229,257    2,396,465
Clinical testing and
regulatory                                     2,521,386    1,967,334
Pre-Clinical research and
development                                      822,225    1,032,486
Depreciation and amoritization                  1,256,579   1,075,431
Total operating expenses                        9,139,410   7,465,481

Loss from operations                           (6,463,892) (5,575,858)

Research grant income                             169,834      98,785
Interest and other income,
net                                               809,254     662,421
Rental income, net                                171,062           -
Amoritization of discount
and costs on mandatorily
convertable notes                               (259,127)  (1,860,051)
Net loss                                     $(5,572,869) $(6,674,703)

Net loss per share:

basic and diluted                                $ (0.37)      $(0.54)
Shares used in computing
net loss per share                             15,186,984   12,303,274



    CONTACT: Cypros Pharmaceutical Corp.
              David Nassif, 760/929-9500