Cytel Corp. announces first quarter 1996 financial results.

SAN DIEGO--(BUSINESS WIRE)--April 23, 1996--Cytel Corp. (NASDAQ:CYTL) Tuesday announced financial results for the first quarter of 1996.

For the three month period ended March 31, 1996, Cytel reported a net loss of $3.4 million, or $0.14 per share, on revenues of $2.3 million. In the first quarter of 1995, Cytel reported break-even operating results on revenues of $4.2 million, largely attributable to the up-front license fee of $3.0 million from Pharmacia and Upjohn Inc. for a license to Cytel's P-selectin antibody, CY-1748.

Revenues in the first quarter of 1996 include development funding pursuant to a collaboration agreement signed in the second quarter of 1995 with Schwarz Pharma AG, as well as research support from Sumitomo Pharmaceuticals and grant funding. Expenses for the first quarter of 1996 reflect increased research and development expenditures associated with the acceleration of the company's clinical trials with its two lead compounds, Theradigm-HBV and Cylexin.

The company is currently engaged in Phase II clinical trials with Theradigm-HBV and Cylexin. Theradigm-HBV is designed to activate an immune response against the hepatitis B virus. One trial is being conducted in chronic active hepatitis, with a second trial targeting chronic carriers of the virus.

Interim results from the ongoing Phase II study released in March 1996 demonstrate that Theradigm-HBV induced an HBV-specific CTL response in patients with chronic active hepatitis. The activation of such an immune response is thought to be therapeutically relevant. Cylexin is also being evaluated in two Phase II clinical trials. One study is underway to evaluate the ability of Cylexin to reduce cardiac reperfusion injury, and therefore reduce infarct size, associated with treatment of acute myocardial infarction in patients undergoing primary angioplasty.

A second trial is evaluating the ability of Cylexin to reduce lung reperfusion injury following treatment of pulmonary hypertension through surgical removal of blood clots from the lungs.

As of March 31, 1996, Cytel had cash, cash equivalents, and short- term investments of $35.9 million and 24,780,079 shares of common stock outstanding.

Cytel Corp., founded in 1987, is a leader in the discovery, design, and development of immunotherapeutics, a class of drugs which the company believes will be more selective and have fewer side effects than drugs currently on the market.

Utilizing Cytel's advanced understanding of the immune system's operation both in disease and in health, the company is developing drug candidates under two distinct approaches: the immune suppression program targets inflammatory diseases and reperfusion injury through the use of cell adhesion blockers that prevent the excessive migration of white blood cells into surrounding tissue, and the immune stimulation program is directed to the development of therapeutic vaccines to treat infectious diseases and cancers by stimulating production of antigen-specific cytotoxic T-lymphocytes by the immune system.

Actual results may differ materially from the above forward- looking statements due to a number of important factors, including, but not limited to, the timing and cost of conducting human clinical trials and the possibility that further testing of Theradigm-HBV may not support the results of the interim data described above or may reveal undesirable and unintended side effects or other characteristics that may prevent or limit its commercial use. These factors are more fully discussed in the company's most recent Form 10-K and Form 10-Qs. -0-

                            CYTEL CORP.
            Condensed Consolidated Statements of Operations
               (in thousands, except for per share data)

                                          Three months ended March 31,
                                                1996         1995
                                             ----------   ----------
REVENUES:
Research and Development                        $ 1,667      $ 4,000
Research Grants                                     552          209
Miscellaneous Income                                 85          ---
  Total Revenues                                  2,304        4,209

OPERATING EXPENSES:
Research and Development                          5,259        3,806
General and Administrative                          896          820
  Total Expenses                                  6,155        4,626

Interest Income, Net                                470          420
Net Income (Loss)                                (3,381)           3
Net Income (Loss) per Share                       (0.14)        0.00
Shares used in computing
 Net Income (Loss) per Share                 24,663,644   22,290,045

                  Condensed Consolidated Balance Sheets
                             (in thousands)

                                             March 31,   December 31,
                                               1996          1995
                                             -------        -------
ASSETS
Current Assets:
Cash, Cash Equivalents, and Short-Term
 Investments                                 $35,891       $38,439
Receivable Under Collaborative Agreement         ---         2,000
Other Current Assets                           2,076         1,557
  Total Current Assets                        37,967        41,996

Property and Equipment, Net                    2,976         2,488
Other Assets                                   3,856         3,628
  Total Assets                                44,799        48,112

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities                            7,139         7,376
Other Liabilities                              2,014         2,212
Stockholders' Equity                          35,646        38,524
  Total Liabilities and Stockholders' Equity  44,799        48,112

CONTACT: Cytel Corp., San Diego

Karin Eastham, 619/552-3000