ILEX Oncology Announces Second Quarter 1997 Results.

SAN ANTONIO, Texas--(BUSINESS WIRE)--July 22, 1997--ILEX(TM) Oncology, Inc. (Nasdaq: ILXO) today reported its financial results for the second quarter ended June 30, 1997.

ILEX increased its total revenue to $3 million during the second quarter, an increase of 162% over the same period last year. The 1997 second quarter net loss was ($1.3) million compared to ($0.6) million over the same period in the prior year. Net loss per share for the second quarter was ($0.11) compared to ($0.07) per share for the same period in the prior year. For the first six months of this year, total revenue was $5.7 million, an increase of 160% over the same period last year. First half 1997 net loss was ($1.8) million compared to ($1.0) million in 1996. Year-to-date net loss was ($0.15) per share compared to ($0.12) for 1996.

Expenses during the second quarter were $4.6 million, compared to $1.8 million for the same period in 1996, primarily due to an increase in product development activity and contract research projects and an increase in ILEX's investment in its portfolio of proprietary products. Year-to-date expenses were $8 million compared to $3.4 million last year.

In the second quarter of 1997, revenues from ILEX's contract research business continued to build to $1.6 million, an increase of approximately 360% over the second quarter of 1996 and a 27% increase over first quarter 1997. During the quarter, ILEX and Physician Reliance Network ("PRN") signed a comprehensive development agreement with Eli Lilly and Company whereby ILEX will manage the clinical development of two of Lilly's anticancer agents. Earlier this month, ILEX and PRN signed a strategic alliance agreement in which the two companies will team with each other to provide contract clinical trials management services to other pharmaceutical and biotech companies. "This alliance is a cornerstone of our CRO business," stated Richard Love, President and Chief Executive Officer of ILEX.

Revenue received for the development of ILEX's product portfolio was $1.5 million for the quarter, an increase of 65% over the same period last year. Performance of this segment of the business was mixed in the second quarter. The FDA's Oncologic Drug Advisory Committee recommended against approval of mitoguazone as a second line therapy for patients with AIDS-related non-Hodgkin's lymphoma based upon their belief that agents for this indication should demonstrate a higher response rate. ILEX and Sanofi Pharmaceuticals Inc., ILEX's partner for the development of mitoguazone, are evaluating alternative development plans for obtaining marketing approval of this agent. Sanofi is also reviewing its continued support of mitoguazone. In another development, ILEX and its partner Janssen Pharmaceutica decided to wind down the development of crisnatol, a compound under development for the treatment of brain tumors. This decision was based upon unexpected observations of pulmonary embolism occurring in several patients in a Phase III study in patients with brain tumors as well as in an ongoing phase I study evaluating a continuous infusion regimen. Janssen and ILEX are currently exploring ways to collaborate for the development of other anticancer agents. ILEX has a royalty interest in both mitoguazone and crisnatol.

ILEX added a promising compound to its product portfolio during this quarter through a 50/50 joint venture with LeukoSite, Inc. for the development of CAMPATH-1H, a monoclonal antibody. Published data from Phase II trials of this agent in patients with chronic lymphocytic leukemia (the most common form of adult leukemia) have demonstrated a 40-70% objective response rate in patients who have failed front line therapy. ILEX and LeukoSite have scheduled a meeting with the FDA to discuss the appropriate strategy for obtaining marketing approval of this agent.

ILEX continued to initiate clinical trials of its other proprietary products on schedule during the quarter. Research and development spending was $1.8 million for the second quarter and in line with the Company's plan.

"Our strategy of building two businesses around service and products is serving us well. It allows us to reallocate resources as promising products or profitable contract opportunities arise. This helps maintain our growth when inevitable setbacks occur during the development of some of our pharmaceutical products," stated Mr. Love. "We believe our strategy will allow us to continue to grow our revenue base while maintaining our burn rate within plan."

ILEX Oncology, Inc. is a drug development company focused exclusively on the development and marketing approval of drugs for the treatment and prevention of cancer. ILEX provides pharmaceutical and biotechnology companies with compounds for their pipeline as well as drug development and manufacturing services on a contract basis. ILEX's close association with cancer research and treatment institutions allows access to both the opinion leaders and patients necessary for the development of oncology drugs.

Certain statements contained in this press release, including statements regarding the anticipated development and expansion of the Company's business, the intent, belief or current expectations of the Company, its directors or its officers, primarily with respect to the future operating performance of the Company and other statements contained herein regarding matters that are not historical facts, are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, those discussed in other filings made by the Company with the Securities and Exchang - - -

Total revenue 1,162 3,046 2,175 5,661

OPERATING EXPENSES: Research and development costs - (442) - (546)

NET LOSS $(574) $ (1,325) $ (990) $ (1,793)

NET LOSS PER SHARE $(0.07) $ (0.11) $ (0.12) $ (0.15)

Weighted average number of common stock 27,374 $ 55,814

LIABILITIES AND STOCKHOLDER'S EQUITY CURRENT LIABILITIES 2,322 3,107

OTHER LONG-TERM LIABILITIES  Christine Flaherty