Endorex Corp. Announces First Quarter 1998 Results; Starts Four New Phase II Trials During Quarter.

CHICAGO--(BUSINESS WIRE)--May 11, 1998--Endorex Corp. (OTC: ENDR) today reported results for the first quarter ended March 31, 1998. The Company reported a net loss of approximately $9.2 million, or $0.92 per share for the quarter ended March 31, 1998 as compared to a net loss of approximately $0.6 million, or $0.54 per share for the quarter ended March 31, 1997.

The current quarter included an $8 million expense reflecting the Company's share of an initial license fee paid by the Company's joint venture with Elan Corporation, plc. The joint venture paid the license fee to Elan for the exclusive rights to Elan's oral drug delivery technology for vaccines. The new joint venture combines the two companies' technologies for research, development and commercialization of oral delivery systems for the human and animal vaccine markets. In connection with the joint venture, Elan also invested $8 million in Endorex convertible preferred stock, effectively offsetting the impact of the license fee on the balance sheet.

Excluding the effects of the license fee, net loss increased approximately $633,000 from the first quarter of 1997 principally due to increased research and development expenses including new personnel, consultants and clinical supplies in connection with the commencement of Phase II clinical trials for the Company's two cancer drugs, Perillyl alcohol and ImmTher(R).

Weighted average common shares outstanding increased to 10,077,571 from 1,087,141 as a result of the Company's successful $20 million private placement in October 1997 and a $2 million common stock investment by Elan in January 1998.

"The increase in our net loss, or 'burn rate,' is a result of the Company's efforts to expand and accelerate our R&D and clinical programs," said Michael Rosen, President and CEO of Endorex. "A year ago, we had no clinical trials in progress. Today we have two drugs in four clinical trials, three of which are sponsored by the National Cancer Institute."

Endorex Corp. is a hybrid biotechnology company engaged in the development of novel cancer products and oral drug delivery. Orasomal Technologies, Inc., Endorex's oral delivery subsidiary, licensed technology from the Massachusetts Institute of Technology (MIT) that is being developed to deliver vaccines, proteins, and peptides. Endorex is focusing on two novel directions in cancer therapy: immunotherapy and natural cancer therapy. Endorex has initiated multiple Phase II clinical trials with its two drugs for cancer, ImmTher(R), an immunodulator, and Perillyl alcohol (POH), a novel cancer therapy based on monoterpenes.

The statements made in this press release contain certain forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that involve a number of known and unknown risks and uncertainties. Such statements are only predictions and actual events or results in future periods may differ materially from what is currently anticipated. In addition to the matters described in this press release, risk factors as described from time to time in Endorex's filings with the Securities and Exchange Commission, including, but not limited to, its most recent reports on Form 10-QSB and Form 10-KSB, may affect the results achieved by Endorex. The Company assumes no obligation to update the information in this release. -0-

Results of Operations                     Three months ended March 31,
                                             1998             1997
                                             ----             ----
Revenues                              $            -    $          -
Operating expenses                         1,446,314          597,267
Net loss                                  (9,232,178)        (589,319)
Basic and diluted net loss per share  $        (0.92)   $       (0.54)
Average shares outstanding                10,077,571        1,087,141


Financial Position                                     March 31, 1998

Cash and cash equivalents                                 $16,626,976
Working capital                                            16,085,621
Total assets                                               19,607,473
Long term debt                                                      -
Stockholders' equity                                       10,870,963

Stock Information                                         May 4, 1998

Symbol (OTC:BB)                                                  ENDR
Recent price                                                    $5.00
Shares outstanding                                          9,936,000
Market capitalization                                     $49,680,000

Note to Investors and Editors: Endorex's press releases are available on the Internet at: http://www.endorex.com

CONTACT: Media:

Mary Ann Dunnell

Robinson Lerer & Montgomery

212-484-7797

or

Michael Rosen, President and CEO

Endorex Corp.

847-604-7555

or

Investor:

Dian Griesel, Ph.D.

The Investor Relations Group

212-664-8489