TELOR OPHTHALMIC PHARMACEUTICALS, INC. REPORTS THIRD QUARTER 1994 FINANCIAL RESULTS, REORGANIZATION AND RESIGNATION OF CHIEF EXECUTIVE OFFICER.

WILMINGTON, Mass--(BUSINESS WIRE)--NOVEMBER 14, 1994--TELOR OPHTHALMIC PHARMACEUTICALS, INC. (NASDAQ NM Symbol: TELR), today reported a net loss of $2,084,233, or $0.27 per share, for the third quarter ended September 30, 1994, compared to a net loss of $1,808,330, or $0.24 per share, in the third quarter of 1993, and a net loss of $2,100,155, or $0.28 per share, for the second quarter of 1994. Research and development expenses for the third quarter of 1994 increased 14% to $1,689,438, compared to research and development expenses of $1,485,032 for the same period in 1993. As expected, continued expansion of clinical trials, manufacturing development costs and new portfolio developments contributed to the increase in research and development expenses. For the nine months ended September 30, 1994, growth in research and development expenses resulted in a net loss of $6,565,578, or $0.86 per share, compared to $4,946,023, or $0.79 per share, for the first nine months of 1993.

At September 30, 1994, the Company had approximately $12.9 million in cash and short-term investments. The number of employees at the end of the third quarter of 1994 remained unchanged from the second quarter of 1994 at 43, compared to staff of 35 at December 31, 1993.

The Company announced on November 7, 1994, that based on the results of the Phase II clinical trial of TEKRON(TM), it does not intend to proceed with further development of a topical formulation of ethacrynic acid (ECA) for the treatment of glaucoma. As a consequence of the loss of this program, TELOR today announced a reorganization within the Company, which includes a reduction of the workforce by approximately 35%. The objectives of this action are to conserve cash and short-term TELOR OPHTHALMIC PHARMACEUTICALS, INC. Page Two investments, while continuing the development of the Company's key clinical and preclinical programs for XARANO(TM), surgical miosis, presbyopia and ocular pain. The Company anticipates that current resources will be sufficient to fund its reorganized operations into the third quarter of 1996.

Stephen J. Riggi, Ph.D. resigned as Chief Executive Officer, President and a Director of the Company and Michael R.N. Thomas resigned as Vice President, Business Development and Finance and Treasurer, effective today. John K. Herdklotz, Ph.D. will become Chairman of the Board of Directors and acting Chief Executive Officer and President of the Company. Mark J. Gabrielson will become the Company's acting Chief Financial Officer and Treasurer. The Company intends in the near future to undertake a search to fill the positions vacated by Dr. Riggi and Mr. Thomas.

Commenting on Dr. Riggi's resignation, Dr. Herdklotz said, "The Company thanks Dr. Riggi for the many contributions he has made since he joined Telor five years ago."

Dr. Herdklotz is President of Hoechst-Roussel Pharmaceuticals, Inc. a position he assumed in 1992. He has announced his retirement from that position effective December 31, 1994. For the year prior to serving as President of Hoechst-Roussel Pharmaceuticals, he served as a member of the Hoechst AG Pharmaceutical Management Committee. From April 1990 to November 1991, he was the Executive Vice President of Hoechst-Roussel Pharmaceuticals, Inc., and from April 1988 to April 1990, he was Vice President of Industrial Fibers for Hoechst Celanese Corporation. Dr. Herdklotz holds a Ph.D. in physical chemistry from Rice University and was a National Institute of Health (NIH) post-doctoral fellow at Baylor College of Medicine.

Mr. Gabrielson is a Director of Telor and a General Partner of Prince Ventures, L.P. Prior to joining Prince Ventures, Mr Gabrielson held a number of management positions with SmithKline Beecham p.l.c. "The loss of the TEKRON clinical program was clearly a disappointment," stated Dr. Herdklotz "However, by discontinuing that effort, and restructuring the Company, we are able to concentrate, more efficiently, our available resources on other developmental products in our portfolio: the multi-center, pivotal, Phase III trials with XARANO, a potential product for preventing elevated intraocular pressure associated with cataract surgery; the recently initiated clinical program in surgical miosis; the feasibility studies of a pharmacological approach to treatment of presbyopia, the age-related loss of the ability to focus on near objects, as in reading; and the preclinical program in ocular pain. These portfolio programs will be the focus of TELOR's efforts in the coming quarters."

TELOR has also recently announced the filing of an Investigational New Drug (IND) application and the recent commencement of a Phase I/II clinical trial of a potential product (EY-128), to treat surgical miosis. When an ophthalmic surgeon operates to remove a cataractous lens and replace it with an artificial lens, the surgeon must operate through the pupil. The pupil, which initially may be only 5-8 mm. in diameter, often decreases in size, which is referred to as surgical miosis. The Company believes that EY-128 may have the potential to prevent the release of inflammatory mediators, which may be the cause of surgical miosis. There are approximately 1.5 million cataract surgeries performed each year in the United States.

TELOR OPHTHALMIC PHARMACEUTICALS, INC. is dedicated to the development and commercialization of innovative prescription pharmaceuticals for use in ophthalmic surgery and age-related eye diseases. The Company's strategy is to introduce into the expanding $3.6 billion worldwide ophthalmic market a broad-based portfolio of patent protected products. TELOR is currently focused on chronic therapies for the treatment of presbyopia and ocular pain, and acute use surgical adjuncts for the prevention of post operative pressure spikes and surgical miosis, both common problems associated with cataract surgery.

TELOR relocated to new headquarter facilities in Wilmington in October, 1994. -0-

                          TELOR OPHTHALMIC PHARMACEUTICALS, INC.
                               (A Development Stage Company)
                            CONDENSED STATEMENTS OF OPERATIONS
                                        (Unaudited)

                      Three Months Ended         Nine Months Ended
                        September 30,               September 30,
                     1994           1993         1994        1993

Revenues         $      --    $     --      $     --     $     --
Operating expenses:
  Research and
   development   $ 1,689,438  $ 1,485,032   $ 5,456,291  $ 4,089,809
  General and
  administrative     490,054      403,916     1,403,597      938,669
  Marketing           60,884       96,721       169,767      224,981
Less: Interest
  income, net        156,143      177,339       464,077      307,436
Net loss         $(2,084,233)  (1,808,330)  $(6,565,578)  (4,946,023)

Net loss
 per share           $ (0.27)     $ (0.24)      $ (0.86)     $ (0.79)

Weighted average shares
  outstanding      7,637,024    7,625,550     7,632,034    6,221,925


                                    BALANCE SHEET DATA
                                        (Unaudited)

                                   September 30,         December 31,
                                      1994                  1993

Cash and short-term
 investments                     $ 12,903,981         $ 20,678,204
Fixed assets,
 less depreciation                  1,389,913              565,672
Total assets                       15,112,641           21,669,425
Total liabilities                     748,443              834,540
Total stockholders' equity         14,364,198           20,834,885
    CONTACT:  John K. Herdklotz, Ph.D.          Michele Fasano, ext. 105
              President & CEO                   Kristen Mahan, ext. 122
              Telor Ophthalmic Pharmaceuticals  Lippert/Heilshorn & Assoc.
              508/657-8400                      212/838-3777