TheraTech Reports Second Quarter 97 Earnings Are Up 24 Percent Versus Second Quarter 96.

SALT LAKE CITY--(BUSINESS WIRE)--July 22, 1997--TheraTech Inc. (NASDAQ:THRT) Tuesday reported second quarter 1997 earnings of $1,321,000, or 6 cents per share.

This represents a 24 percent increase over the $1,069,000, or 5 cents per share reported for the same three month period ended June 30, 1996, and marks the company's fifth successive profitable quarter. Total revenues for the period were $9,203,000, compared to $8,823,000 in second quarter 1996.

Year-to-date, the company reported net income of $2,108,000, or 10 cents a share for the six months ended June 30. That compares to a net loss of $206,000, or 1 cent per share reported for the first half of 1996. Total revenues year-to-date were $18,039,000, compared to $15,175,000 in 1996.

TheraTech achieved several milestones during the quarter. One was marketing partner Procter and Gamble's U.S. launch of Alora(TM), the company's estradiol transdermal system for hormone replacement therapy in women.

Others included the Food and Drug Administration's May action that cleared the new Androderm(R) 5-milligram-per-day (5 mg/day) One-Patch testosterone transdermal system for marketing, and the product's June U.S. launch by SmithKline Beecham.

While it is still early in the launch periods, sales to date of both products are consistent with expectations.

Factors contributing to TheraTech's continuing profitability included: product sales revenues, which are continuing to grow as a result of the Alora and Androderm One-Patch launches; strong research and development revenues; and management's ongoing success in controlling expenses.

TheraTech Inc. is an industry leader in the development of pharmaceutical products based on its permeation-enhancer and controlled-release drug delivery technologies.

Working both independently, and with corporate partners, TheraTech has pioneered the development of a wide range of drug delivery technologies and products, including: oral transmucosal systems for the delivery of peptide drugs; a variety of transdermal patches; oral controlled release systems; pulmonary technologies for delivery of peptide, protein and respiratory drugs; and topical preparations.

TheraTech currently has equity and/or research and licensing agreements with many of the world's leading pharmaceutical companies including Astra, Eli Lilly, Pfizer, Procter & Gamble, SmithKline Beecham, Roche and Wyeth-Ayerst. -0-

The statements contained in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including TheraTech's beliefs, expectations, hopes or intentions regarding the future.

All forward-looking statements included in this release are made as of the date hereof and are based on information available to TheraTech as of such date. TheraTech assumes no obligation to update any forward-looking statement. It is important to note that actual outcomes and TheraTech's actual results could differ materially from those in such forward-looking statements.

Factors that could cause actual results to differ materially include risks and uncertainties such as marketplace competitive changes. Readers should also refer to the risk disclosures outlined in TheraTech's filings with the Securities and Exchange Commission on Forms 10-K and 10-Q.

For additional information on TheraTech Inc., visit the company's Web Site at http://www.thrt.com or e-mail at [e-mail] . -0-

                         TheraTech Inc.
           Condensed Consolidated Financial Information
                          (Unaudited)

                       Three Months Ended       Six Months Ended
                            June 30,                June 30,
                        1997        1996        1997        1996
Revenues:
  Research and
   development       $4,812,211  $5,916,508  $10,366,698  $8,768,853
  Product sales       3,672,664   2,438,276    6,576,799   4,612,610
  Licensing             340,000     135,000      345,000     985,000
  Interest and other    377,623     332,740      750,844     808,389
    Total revenues    9,202,498   8,822,524   18,039,341  15,174,852

Costs and expenses:
  Research and
   development        3,630,365   4,341,479    8,065,398   8,217,513
  Cost of products
   sold               2,657,633   1,866,106    4,810,182   4,101,174
  General and
   administrative     1,335,134   1,253,101    2,561,219   2,473,671
  Interest and other    257,957     292,741      494,287     588,922
    Total costs and
     expenses         7,881,089   7,753,427   15,931,086  15,381,280

Net income (loss)    $1,321,409  $1,069,097   $2,108,255   $(206,428)

Net income (loss)
 per share                $0.06       $0.05        $0.10      $(0.01)

Shares used in
 calculation of net
 income (loss) per
 share               21,635,838  20,233,658   21,723,536  20,160,597


                                               June 30,    Dec. 31,
ASSETS                                           1997        1996

Current assets:
  Cash, cash equivalents and short-term
   investments (a)                           $25,048,272 $23,214,410
  Contracts and accounts receivable            5,410,547   4,726,112
  Inventories                                  2,879,598   2,277,021
  Prepaid expenses                               336,389      36,127
    Total current assets                      33,674,806  30,253,670
Investments in long-term securities (a)        1,999,736   2,000,468
Plant and equipment, net                      19,055,840  19,430,686
Other assets                                   1,648,412   2,161,978
    Total assets                             $56,378,794 $53,846,802

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued liabilities    $3,683,834  $3,744,210
  Current portion of notes payable and
   capital lease obligations                   1,599,695   1,609,587
  Unearned revenue                             3,274,563   2,597,942
    Total current liabilities                  8,558,092   7,951,739
Notes payable and capital lease obligations,
 less current portion                          7,927,139   8,660,744
Unearned revenue                               1,212,000   1,212,000
Stockholders' equity:
  Common stock                                   206,858     205,634
  Additional paid-in capital                  69,642,548  69,116,551
  Accumulated deficit                        (30,952,908)(33,061,163)
  Cumulative translation adjustment             (214,935)   (238,703)
    Total stockholders' equity                38,681,563  36,022,319
      Total liabilities and stockholders'
       equity                                $56,378,794 $53,846,802

(a)  TheraTech's total cash position as of June 30, 1997 and
     Dec. 31, 1996 was $27,048,008 and $25,214,878, respectively,
     which includes cash, cash equivalents, and short- and long-term
     investments.

CONTACT: TheraTech Inc., Salt Lake City

Alexander L. Searl or Alan Behunin, 801/588-6200