Tripos Reports Third-Quarter 2004 Financial Results; Company Achieves Continued Sales Growth and Operating Profits.

ST. LOUIS -- Tripos, Inc. (Nasdaq:TRPS), a leading provider of drug discovery chemistry and informatics products and services, today announced continuing improvement in its financial results this year.

For the three months ended Sept. 30, 2004, those results included the following:

--Tripos posted revenues of $16.1 million, a 16 percent increase from the previous year's third-quarter revenues of $13.8 million.

--Operating profit was $735,000, compared with an operating loss of $835,000 in the third quarter of 2003, an improvement of $1.6 million year over year.

--Pretax income was $367,000, compared with pretax income of $1.7 million for the same period in 2003. Pretax income for the third quarter of 2003 included $1.5 million from the sale of shares of Arena Pharmaceuticals Inc. common stock.

--Net loss was $145,000, or $0.02 per basic share, compared with income of $964,000, or $0.10 per diluted share, for the third quarter of 2003. The third-quarter 2004 tax rate included a valuation allowance for certain deferred tax assets. Third-quarter 2003 included $868,000 of after-tax gain, $0.09 per diluted share, from the sale of shares of Arena Pharmaceuticals.

For the nine months ended Sept. 30, 2004, the financials were as follows:

--Tripos posted revenues of $47.5 million, a 14 percent increase from the previous year's first nine-month revenues of $41.5 million.

--Operating profit for this period in 2004 was $1.5 million, compared with an operating loss of $3 million in the first nine months of 2003, an improvement of $4.5 million year over year.

--Pretax income was $721,000, compared with pretax income of $4.5 million for the same period in 2003. Pretax income in the first nine months of 2003 included $6.1 million from the sale of shares of Arena Pharmaceuticals.

--Net loss was $14,000, or $0.00 per basic share after including a valuation allowance for certain deferred tax assets in 2004. This compares with net income of $2.5 million, or $0.27 per diluted share, for the first nine months of 2003. The nine-month period ended Sept. 30, 2003, included an after-tax gain of $3.5 million or $0.37 per diluted share from the sale of Arena stock.

"Consistent with our performance objectives for the year, Tripos successfully delivered double-digit revenue growth and recorded another quarter of operating profitability," said Dr. John P. McAlister, president and CEO of Tripos. "This solid performance stems from a concentration on operational efficiencies across our business and from investments we have made over the past two years to develop innovative products and capabilities."

Third-Quarter Operational Highlights

Tripos announced the following strategic initiatives during the third quarter:

--Expanded contract with Schering AG related to the company's ongoing Tripos Discovery Informatics collaboration on the Enterprise Chemical Information Management System (ECIMS). The expanded contract includes the final development and deployment of the initial phase of the new system and provides Tripos with increased incremental funding.

--Released SARNavigator(TM) 1.5, a new research application that allows scientists to rapidly and objectively analyze the large quantities of chemical and biological data that were the result of real or virtual high-throughput screening.

--Selected by the European Molecular Biology Laboratory (EMBL) and the German Cancer Research Center (DKFZ) to assist in rapid identification of potential molecular leads. EMBL, a leading molecular biology research institute, and DKFZ, a member of the Helmholtz Association of National Research Centres, jointly established one of the first European academic small-molecule screening facilities in Heidelberg, Germany.

--Established a new partnership with Divergence Inc., a leader in the discovery of genomics-based solutions for the prevention and treatment of parasitic infections, which will bring drug discovery technologies to crop protection and veterinary applications. Tripos will assist in the rapid optimization of molecular leads discovered by Divergence.

--Formally opened Tripos Discovery Research Ltd.'s (TDR's) new research facility in Bude, England, with His Royal Highness the Duke of York KCVO ADC officiating. The new TDR facility is designed to meet increased demand created by the continuing trend for outsourced research in the global pharmaceutical industry and TDR's expanding partnership base.

Webcast Information

Tripos will host a conference call and webcast today at 10 a.m. EDT to discuss these financial results in detail. Those who want to participate in the webcast should visit the Tripos Web site at http://www.tripos.com. An archived copy of the Tripos webcast will be available beginning at 1 p.m. EDT today, and will remain on the Tripos Web site through Nov. 26.

About Tripos, Inc.

Tripos (Nasdaq:TRPS) combines leading-edge technology and innovative science to deliver consistently superior chemistry-research products and services for the biotechnology, pharmaceutical and other life science industries. Tripos collaborates with clients to accelerate and improve the creation of life-enhancing products. Within Tripos' Discovery Informatics (DI) business, the company provides software products and consulting services to develop, manage, analyze and share critical drug discovery information. Within Tripos' Discovery Research (DR) business, Tripos' medicinal chemists and research scientists partner directly with clients in their research initiatives, leveraging state-of-the-art information technologies and research facilities. Headquartered in St. Louis, Mo., Tripos spans the world with global research operations and an international client base. Further information on Tripos can be found at http://www.tripos.com.

This press release may contain certain statements that are forward-looking and involve risks and uncertainties. Words such as "expects," "anticipates," "projects," "estimates," "intends," "plans," "believes," variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are based on current expectations and projections made by management and are not guarantees of future performance. Therefore, actual events, outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. We have identified certain factors that could cause actual results to differ materially from the forward-looking statements in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K. Except as otherwise required under federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

Tripos, Inc.
                    Condensed Results of Operations
                 (in thousands, except per-share data)

                               Three Months Ended   Nine Months Ended
                               ------------------- -------------------
                               30-Sep-04 30-Sep-03 30-Sep-04 30-Sep-03
Net sales                                 Restated            Restated
  Discovery software products
   and support                 $  6,005  $  5,779  $ 18,225  $ 17,611
  Discovery informatics
   services                       1,247       759     2,681     3,034
  Discovery research products
   and services                   8,824     7,154    26,459    20,105
  Hardware                           24       152        98       781
                                ------------------  ------------------
Total net sales                  16,100    13,844    47,463    41,531

  Cost of sales                   8,333     6,236    23,435    18,768
                                ------------------  ------------------
Gross profit                      7,767     7,608    24,028    22,763

Operating expenses
  Sales and marketing             3,089     3,260     9,464     9,901
  Research and development        2,140     3,369     7,433    10,200
  General and administrative      1,803     1,814     5,585     5,646
                                ------------------  ------------------
Total operating expenses          7,032     8,443    22,482    25,747

Income (loss) from operations       735      (835)    1,546    (2,984)

  Other income (loss), net         (368)    2,521      (825)    7,445
                                ------------------  ------------------
Income before income taxes          367     1,686       721     4,461

  Income tax expense                512       722       735     1,909
                                ------------------  ------------------
Net income                     $   (145) $    964  $    (14) $  2,552
                                ==================  ==================

Basic income per share         $  (0.02) $   0.11  $  (0.00) $   0.29
Diluted income per share       $  (0.02) $   0.10  $  (0.00) $   0.27
Basic weighted average shares     9,290     8,988     9,170     8,934
Diluted shares outstanding        9,290     9,459     9,170     9,310


                             Tripos, Inc.
                      Consolidated Balance Sheets
                 (in thousands, except per-share data)

                                               30-Sep-2004 31-Dec-2003
                                                 Unaudited
Assets:
Current assets:
   Cash and cash equivalents                     $  4,768    $  2,945
   Marketable securities                               49       1,121
   Accounts receivable                             10,391      16,662
   Inventory                                       11,873      12,863
   Deferred income taxes                              419          --
   Prepaid expenses                                 2,870       5,054
                                                  --------------------
        Total current assets                       30,370      38,645
Property and equipment, less accumulated
 depreciation                                      29,376      27,926
Capitalized development costs, net                  2,420       2,417
Goodwill                                              965         965
Investments recorded at cost                        1,482       1,352
Deferred income taxes                                  --          --
Other, net                                            181         390
                                                  --------------------
        Total assets                             $ 64,794    $ 71,695
                                                  ====================

Liabilities and shareholders' equity:
Current liabilities:
   Current portion of long-term debt and
    capital leases                               $  3,617    $ 10,510
   Accounts payable                                 1,576       2,405
   Accrued expenses                                 4,235       7,688
   Deferred revenue                                18,804      17,079
   Deferred income taxes                               --         219
                                                  --------------------
        Total current liabilities                  28,232      37,901
Long-term portion of capital leases                 3,579       2,463
Long-term debt                                      3,752       3,915
Deferred income taxes                                 967         422
Shareholders' equity
   Common stock                                        47          45
   Additional paid-in capital                      37,142      36,502
   Retained earnings (deficit)                     (8,336)     (8,321)
   Other comprehensive income (deficit)              (589)     (1,232)
                                                  --------------------
        Total shareholders' equity                 28,264      26,994
        Total liabilities and shareholders'
         equity                                  $ 64,794    $ 71,695
                                                  ====================