About PharmaNetics : Press Releases : PHARMANETICS REPORTS FOURTH QUARTER AND YEAR END RESULTS

Revenues for the three months ended December 31, 1999 were up 16% to $1,028,000, compared with revenues of $885,000 for the same period in 1998. Fourth quarter 1999 operating expenses increased to $1,747,000 compared to $1,501,000 in the 1998 fourth quarter, mainly due to higher personnel costs. The resulting operating loss for the quarter was $1,540,000, compared with an operating loss of $1,319,000 in the same period a year ago. The net loss for the 1999 fourth quarter was $1,453,000, or $0.19 per basic and diluted share, compared with a net loss of $1,174,000, or $0.16 per basic and diluted share, for the 1998 fourth quarter. The 1998 quarter includes the operations of the Coeur Laboratories subsidiary, which was sold by the Company in June 1999.

For the 12 months ended December 31, 1999, revenues were $3,909,000, compared with $4,141,000 in the same period last year. An increase in test card and controls revenue during 1999 was offset by decreased analyzer sales from Knoll AG, a collaborative partner of PharmaNetics, which in 1998 purchased 450 analyzers for use in their clinical trials. These analyzers were sold at higher average sales prices than analyzers sold during 1999. Full year operating expenses increased 4% from 1998 to $6,291,000 as the Company continued to increase its research and development of specialty test cards. The resulting 1999 operating loss before other income and discontinued operations was $5,561,000, or $0.74 per basic and diluted share, compared with a loss of $4,737,000, or $0.68 per basic and diluted share, in the prior year. Other income, which is mainly dependent on the timing of collaborations and milestones, decreased during 1999 compared to 1998. After other income, the operations of the discontinued Coeur Laboratories segment and the goodwill write-off on the disposal of this subsidiary, for the year the Company reported a net loss of $6,222,000, or $0.83 per basic and diluted share, compared with a net loss of $3,643,000, or $0.52 per basic and diluted share, for the same period in 1998.

In commenting on the financial results for the year, John Funkhouser, President and Chief Executive Officer, noted, "our overall loss versus our budget was primarily effected by the non-cash write-off of goodwill and lost earnings associated with the sale of Coeur. In addition, about $200,000 of budgeted collaborative income was delayed until the first quarter of 2000. Notwithstanding, our operating loss versus budget had a slight favorable variance. However, the excitement within the Company is around the continued technical progress in expanding pharmaceutical collaborations and our comprehensive rapid test menu for therapeutics effecting coagulation."

"The flexibility of the Company’s technology platform was evident during the year as we began a collaboration with Hoechst to monitor Refludan™, and the existing collaboration with AstraZeneca to monitor a thrombin inhibitor under development was expanded." Mr. Funkhouser continued, "we are aligned with some of the largest pharmaceutical companies in the world and represent a proxy for the success of numerous drugs because the TAS technology is flexible enough to manage almost any drug affecting coagulation."

During 1999, the Company initiated clinical plans with Duke Medical Center and the Cleveland Clinic to monitor low molecular weight heparins with tests being developed by PharmaNetics. "We expect our relationships with these coagulation thought leaders to assist us in obtaining pharmaceutical acceptance of theranostic testing," stated Mr. Funkhouser. "While clinical trials will ultimately decide the need for rapid management, we believe that physicians will demand point-of-care evaluation of coagulation status due to narrow therapeutic ranges and short half-lives of new drug therapies. Our ability to provide a comprehensive menu of tests for numerous therapeutics is a competitive advantage because our future is not tied to a particular compound, but rather to a therapeutic category, drugs effecting coagulation."

The Company moved to improve its liquidity through the sale of its Coeur Laboratories subsidiary during 1999 and through the completion of a $12 million convertible preferred stock private placement during February 2000. These events will help PharmaNetics complete development of existing tests and enable the pursuit of new tests and technologies. The private placement accomplished three important objectives: broadening the institutional investor base, improving the cash position and providing funding for new collaborative opportunities.

The Company will hold a conference call to discuss these results beginning at 11:00 a.m. Eastern today. Individual investors are invited to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at http://www.vcall.com. To listen to the live call, please go to the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software.

PharmaNetics, Inc. develops, manufactures and markets rapid turnaround diagnostics to assess blood clot formation and dissolution. The Company develops tests based on its proprietary, dry chemistry Thrombolytic Assessment System for its principal target market of new drug compounds, some of which have narrow therapeutic ranges, as well as for monitoring routine anticoagulants. The Company’s therapeutic diagnostics are used to monitor the effect of antithrombotic agents in the treatment of angina, myocardial infarction (heart attack), stroke, deep venous thrombosis, and pulmonary and arterial emboli.

This press release contains forward-looking statements regarding future events and the future performance of PharmaNetics that involve risks and uncertainties, such as risks related to market acceptance, clinical trials, dependence on third-party distributors and collaborative partners, and continuing losses that could cause actual results to differ materially from those projected in the forward-looking statements. Information concerning these and other factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company’s SEC filings, including Form 10-K, Form 10-Q and Form 8-K reports.