DUSA Pharmaceuticals Reports First Quarter Corporate Highlights and Financial Results.

Health/Medical Writers

WILMINGTON, Mass.--(BW HEALTHWIRE)--May 10, 2000

DUSA Pharmaceuticals, Inc. (NASDAQ/NMS:DUSA) reported today its corporate highlights and financial results for the first quarter ended March 31, 2000.

Corporate Highlights

DUSA has been working closely with its dermatology marketing partner, Schering AG Germany and its US affiliate, Berlex Laboratories, Inc. in preparation for the upcoming launch of DUSA's Levulan(R) (aminolevulinic acid HCl) Kerastick(TM) with Photodynamic Therapy (PDT) for the treatment of actinic keratoses (AKs) of the face and scalp in the US. During the quarter, DUSA continued the pre-production activities for the Kerastick(TM) brand drug applicator and BLU-U(TM) brand light source and filed a PMA Supplement with the FDA for the commercial version of the BLU-U(TM).

As part of the launch preparations, the dermatology unit of Berlex introduced Levulan(R) Kerastick(TM) to dermatologists at the March 2000 meeting of the American Academy of Dermatology in San Francisco. Berlex has built on its US marketing expertise, and Schering AG's strength in dermatology, to assemble an experienced marketing team and a comprehensive marketing strategy. As AKs (sun-induced, precancerous skin lesions) are one of the most common conditions seen by dermatologists in the US, the introduction of an innovative new approach to treatment with demonstrated rapid healing and excellent cosmetic results elicited strong interest from the doctors.

DUSA and Schering AG are also developing Levulan(R) PDT for additional dermatology indications, with initial efforts expected to focus on 3 common skin disorders: acne, warts and onychomycosis (nail fungus).

For acne, the most common skin condition seen by US dermatologists, DUSA has previously reported encouraging results from a pilot clinical trial testing Levulan(R) with red light. In a recent pilot acne study using the BLU-U(TM) and Levulan(R) 20% solution, (as for AKs), preliminary testing indicated that lower concentrations of Levulan(R) may be more suitable for acne. Therefore, a modified drug dose-ranging study using lower drug concentrations and multiple treatments with the BLU-U(TM) is now being prepared.

Recently, positive results using red light and Levulan(R) in the treatment of acne were presented by Wichai Hongcharu et al, Departments of Dermatology and Medicine, Harvard Medical School at a meeting of the American Society of Laser Medicine and Surgery. In this independent investigator study from the Massachusetts General Hospital, the investigators demonstrated "significant clearing of inflammatory acne...up to 20 weeks after multiple treatments," and an associated decrease in oil gland activity. A significant inflammatory reaction occurred after PDT treatments, but faded over time.

DUSA intends to test Levulan(R) PDT with red and blue light in separate trials, in order to optimize treatment conditions for this disorder.

Much of DUSA's attention during the first quarter was focused on preparations for product launch and planning for the dermatology development program with Schering AG. DUSA has also been planning the further development of Levulan(R) Photodetection (PD) for enhanced detection of bladder cancer, and a number of other potential internal indications, all of which have at least some human data suggesting safety and efficacy. These include Levulan(R) PDT for the prevention of restenosis after angioplasty, the treatment of pre-cancerous Barrett's esophagus, the detection and/or treatment of CIN (pre-cancer of the cervix), and as a guide to resection and/or treatment for brain cancer. DUSA may develop certain of these indications through DUSA corporate studies, in partnership with companies (including Schering AG) and/or through investigator-sponsored clinical studies.

During the quarter, the Company was substantially strengthened, both through the continued hiring of additional qualified and experienced employees, and financially, through the closing of an equity private placement. DUSA is also scheduled to receive additional payments from Schering AG within 30 days of the first commercial sale of Levulan(R) PDT, subject to FDA approval of the BLU-U(TM) PMA supplement.

Financial Highlights

The net loss for the three-month period ended March 31, 2000 was $1,241,225 or ($0.10) per share, compared to $1,029,322 or ($0.10) per share for the same period last year. Total research and development costs were $1,269,651, (of which an estimated $435,157 is reimbursable by Schering AG for 2/3 of Q1 dermatology R&D expenses), compared to $841,922 in the prior year period. Total R&D expenses increased primarily due to a build-up in personnel, in anticipation of a significant increase in clinical trial activity expected during 2000 and beyond. Other operating expenses increased from $347,660 to $789,475, primarily due to increased manufacturing and operations personnel, and the new Wilmington headquarters overhead, as DUSA makes the transition from being a development-stage company to a products-based company.

As mentioned above, during the quarter DUSA completed a private placement of 1,500,000 shares of its common stock, raising gross proceeds of $42,750,000. At March 31, 2000, the Company had cash and United States Government securities totaling $67,531,817, and shareholders' equity of $57,248,314, compared to $12,860,816 and $12,658,937 respectively, at March 31, 1999.

Three Months Ended                           Three Months Ended
March 31, 2000                                   March 31, 1999
                  Research and Development
$1,269,651              Costs (Total)                  $841,922

                   Research and Development
$834,494                  Costs (Net)                  $841,922
$789,475           Other Operating Expenses            $347,660
($1,241,225)               Net (Loss)              ($1,029,322)
($0.10)                Net Loss Per Share               ($0.10)


                    Weighted Average Number
                         of Common Shares
12,164,065                 Outstanding               10,761,041

                   Cash and U.S. Government
$57,248,314                Securities               $12,860,816
$57,248,314            Shareholders' Equity         $12,658,937

         (All figures are in US dollars and unaudited)

DUSA Pharmaceuticals, Inc. is a biopharmaceutical company engaged primarily in the development of Levulan(R) Photodynamic Therapy (PDT) and Photodetection (PD) for multiple medical conditions. PDT and PD utilize light-activated compounds to induce a therapeutic or detection effect. DUSA is a world leader in topically or locally applied PDT and PD. The Company is incorporated in New Jersey, with offices in Wilmington, MA, Valhalla, NY, and Toronto, Ontario.

Except for historical information, this news release contains certain forward-looking statements that involve known and unknown risk and uncertainties, which may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the statements made. These forward-looking statements relate to the launch of Levulan(R) PDT by Berlex, the development of additional dermatology indications and protocols, intention to test Levulan(R) for acne and plans to develop other potential internal indications, expectations relating to receipt of additional funds from Schering AG and increase in clinical trial activity. Such risks and uncertainties include, but are not limited to the regulatory approval process, dependence upon third-party manufacturers of the Kerastic(TM), BLU-U(TM) and Levulan(R) the timing of the launch by Berlex, ability to develop a market for the products, timely agreement with Schering AG on a dermatology development program, the results of pre-clinical and clinical trials, the ability to attract and retain qualified personnel and other risks identified in DUSA's SEC filings from time to time, including its Form 10-K for the year ended December 31, 1999.

For further information contact: D. Geoffrey Shulman, MD, President & CEO or Shari Lovell, Director, Shareholder Services Tel: [phone] Fax [phone] or visit www.dusapharma.com