Cytoclonal Pharmaceutics Announces Successful First Quarter Activities; Receives Milestone Payment From Bristol-Myers.

Business/Health & Medical Editors

DALLAS--(BUSINESS WIRE)--May 18, 2001

Progress at Cytoclonal Pharmaceutics Inc. (NASDAQ: CYPH, CYPHW, CYPHZ) in the first quarter of 2001 was anchored by continued development of its proprietary technology platforms and a significant enhancement of management.

"The Company's achievements in the first quarter demonstrate the fundamental financial strength and research abilities of Cytoclonal Pharmaceutics", said Ronald L. Goode, Ph.D., who joined the company as its new President and Chief Executive Officer in late March of this year. "The financial enabler and unique technology platforms were major factors in my decision to join Cytoclonal. Everything that I have seen to date justifies my initial enthusiasm for the prospects of the Company."

The addition of Dr. Goode to the Cytoclonal team is an indication of a successful Board strategy to enhance the management structure and marks the transition of the Company from a purely research organization to one committed to commercializing its research. Prior to joining Cytoclonal, Dr. Goode held key management positions at G.D. Searle & Co. and Pfizer Pharmaceuticals and has an extensive record of success in business development, having been responsible for many of Searle's acquisitions. Furthermore, he has supervised clinical development programs that led to FDA approval of over a dozen New Drug Applications. After his tenure at Searle, Dr. Goode was President and CEO of Unimed Pharmaceuticals, Inc., where he positioned that company for sale to the large Belgium-based pharmaceutical company, Solvay et cie. Dr. Goode succeeded founder Dr. Arthur P. Bollon, who remains as non-executive Vice Chairman.

Cytoclonal reduced its first quarter loss by 40% (to $1,520,000, or $.10 per share) when compared to the first quarter of 2000 when it recognized a loss of $2,466,000 ($.22 per share). The Company's receipt of progress payments of $1,000,000 from Bristol Myers in February and its successful cash management program were factors in contributing to a net use of cash of $1,579,000 during the first quarter, including acquisitions of capital assets and purchases of $935,000 in Company stock.

The Company recognized 1Q2001 revenues of $333,000 from the renewal and extension of its License and Research Collaborative Agreement with Bristol-Myers Squibb. Revenues for the comparable period in 2000 were $344,000. The BMS agreement, renewed in December 2000, will yield a total of $2,000,000 in revenues over the eighteen-month period ending July 2002.

Research and development expenses increased to $1,149,000 in 1Q2001 from $577,000 in 1Q2000, primarily as a result of progress in the Quantum Core Technology(TM) platform that necessitated hiring additional scientific talent to handle drug candidate throughput. The Company experienced a decrease from $2,265,000 in 1Q2000 to $983,000 in 1Q2001, primarily as a result of non-cash one time expenditures in 2000. "Our expenses in the first quarter of 2000 were related to successful financing activities that provided valuable resources and made it possible for the Company to attract experienced, qualified individuals in both the scientific and corporate staff, " said Dr. Goode. "In addition, we were able to undertake projects to enhance our corporate and financial infrastructures. As our drug candidate portfolio expands, we will continue to need high quality staff to optimize the output of our labs for commercialization purposes. We are nearing our goal of developing the base of drug candidates demonstrating the advantages of the QCT technology platform, which will enable significant partnering initiatives."

Also among the highlights this year was the filing of a patent covering the production of glucocerebrosidase, an enzyme for the treatment of Gaucher's Disease, a rare, potentially fatal disorder resulting from a genetic defect. "The completion of this project and the resulting patent filing further demonstrates our ability to successfully build on our already substantial fundamental technology resources, as well as our ability to achieve milestones to which we commit. The interest already expressed for this product adds to my confidence in the commercial potential for Cytoclonal technologies," concluded Dr. Goode.

Cytoclonal Pharmaceutics is a biopharmaceutical company specializing in the development of therapeutic products for the treatment and prevention of cancer, infectious and genetic diseases. www.cytoclonal.com.

Except for historical information, the matters discussed in this news release may be considered "forward looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results.

CYTOCLONAL PHARMACEUTICS, INC.
FINANCIAL HIGHLIGHTS
Summary Statement of Income Data

                                          For the Three Months Ended
                                          3/31/01            3/31/00

Revenues                                 $333,000           $344,000
Research and development expenses       1,149,000            577,000
General and administrative expenses       983,000          2,265,000
Net loss                              $(1,340,000)       $(2,419,000)
Basic and diluted loss per common share    ($0.10)            ($0.22)
Weighted average number of shares
 outstanding - Basic and diluted       16,148,900         11,156,000

Summary Balance Sheet Data

Total assets                          $35,794,000        $18,411,000

Working capital                        32,791,000         15,822,000

Shareholders' equity                   33,619,000         16,315,000