About PharmaNetics : Press Releases : PHARMANETICS ANNOUNCES THIRD QUARTER RESULTS

FOR IMMEDIATE RELEASE
October 31, 2000

PHARMANETICS ANNOUNCES THIRD QUARTER RESULTS
Pharmaceutical Collaborations With Bayer Diagnostics and Aventis
Continue to Support Theranostic Strategy

RALEIGH, N.C. (October 31, 2000) - PharmaNetics, Inc. (NASDAQ /NM: PHAR) , a leading company specializing in theranostic management of various therapeutics affecting coagulation, announced today results for the third quarter and nine months ended September 30, 2000. The Company also discussed the importance of its collaborations with pharmaceutical firms.

John P. Funkhouser, president and chief executive officer of PharmaNetics, said, "We continue to be very excited about our collaborations with major pharmaceutical companies. To date, we have formed relationships with Aventis, AstraZeneca and Knoll BASF to develop and use specific diagnostic tests in the management of various drugs. These alliances present us with an opportunity to link our proprietary diagnostic technology to multiple new compounds both during the clinical trials phase and subsequent to FDA approval. In effect, we are diversifying our product line across a therapeutic segment of drugs affecting coagulation without having to modify our core diagnostic platform."

Revenues for the third quarter ended September 30, 2000, were $743,000 compared with revenues of $745,000 in the same period in 1999. Slightly higher test card revenue in the third quarter of 2000 was offset by slightly lower analyzer sales. Operating expenses for the quarter were $2.0 million compared with $1.5 million in 1999, principally due to higher personnel costs in administration and research and development as well as higher clinical trial costs compared with the prior year. After other income and preferred dividends, the net loss for the third quarter of 2000 was $1.9 million, or $0.25 per share, compared with $1.4 million, or $0.19 per share, in the same period a year ago.

Revenues for the nine months ended September 30, 2000, increased 24% to $3.6 million compared with $2.9 million in the same nine-month period in 1999. This increase was due to higher sales of test cards and analyzers that occurred in the first half of 2000. Year-to-date operating expenses were $5.8 million compared with $4.5 million for the nine months ended September 30, 1999. This increase was mainly due to increased personnel costs, larger research expenditures for personnel and clinical trials and increased marketing costs earlier in 2000. Other income for the nine-month period ended September 30, 2000, increased to $815,000 from $60,000 in 1999 as a result of the platelet development agreement with Bayer and because of increased interest income from higher average cash balances. After giving effect to preferred dividends and the non-cash amortization related to the beneficial conversion feature of the Series A Convertible Preferred Stock, the net loss for the nine months ended September 30, 2000, was $5.4 million, or $0.72 per share, compared with $4.8 million, or $0.64 per share, for the same period in 1999. The 1999 net loss was impacted by the divestiture of the Coeur Laboratories division.

Earnings for the third quarter were lower than analyst estimates due to a slow down in Bayer sales. The less than expected third quarter sales reflect Bayer's efforts to use routine test card inventories acquired in the first half of 2000. Bayer sells routine coagulation tests for monitoring heparin and coumadin as part of a total critical care product solution that includes blood gases, chemistries, electrolytes and immunoassays. PharmaNetics routine sales strategy depends on a comprehensive technology critical care offering which has not been available to date. Thus, routine coagulation sales are more dependent on the Rapidpoint Accent and Heparin Management Panel ("HMP") sold as a stand alone product managing the coagulation status of patients during open heart surgery. The development delay of the HMP from March to October has negatively impacted sales.

The Company does not expect Bayer's fourth quarter sales of Company products to improve though it anticipates the launch of the Rapidpoint Accent and their Rapidpoint blood gas system, initiating Bayer's comprehensive critical care product sales strategy. PharmaNetics now projects Bayer will buy 1.1 million routine tests this year, down from the Company's prior estimate of 1.5 million routine tests. The Company continues to believe in Bayer's critical care product strategy and renewed efforts to both technically support and commit to a comprehensive critical care product launch.

In keeping with the new SEC regulations regarding full disclosure, which is designed to provide fuller disclosure to all shareholders, the Company provides the following information: For the year, the Company anticipates losing approximately $7.6 million, or $0.99 per diluted share, which is $1.4 million greater than analyst expectations. The Company anticipated that slower routine sales would have been offset by $1.0 million of development funds received in early October from Aventis. Unfortunately, under SAB 101 issued by the SEC and effective this year, development income cannot be recognized immediately, but must be amortized over the life of the marketing agreement (five years), even though PharmaNetics has completed its development obligations. This will have a negative $900,000 impact to earnings in 2000 and a potential negative $3.6 million impact in 2001. The Company expects that the move to a new corporate headquarters will negatively impact earnings by an additional $300,000 in 2000 and another $600,000 in 2001. The Company also expects that previously estimated losses of approximately $1.0 million in 2001 should be in the range of $5.5 to $6.5 million, primarily due to lower revenue than originally estimated for routine tests, the headquarters move and the restriction on recognizing development funds as income. These estimates could change if routine critical care coagulation sales efforts do not meet internal estimates and the enoxaparin test is delayed beyond the fourth quarter of 2001. Because PharmaNetics expects to receive Aventis' development funds, the negative impact will be on earnings, not cash.

Late in the third quarter, the Company reported two strategic alignments with pharmaceutical companies. PharmaNetics signed a five-year agreement with Aventis Pharmaceuticals to partner in the development and commercialization of a new therapeutic diagnostic test for use with Aventis Pharmaceuticals' enoxaparin sodium (Lovenox®/Clexane®). Mike Riddle, executive vice president of marketing and sales, stated, "The third quarter was highlighted by an important milestone in the Company's history as we completed the agreement with Aventis to develop an "Enoxaparin Test." The collaboration provides us with an opportunity to benefit from their expertise and market leadership position as we prepare for each phase of the product's development and co-marketing strategy." The "Enoxaparin Test," to be marketed under joint trade names, will be promoted by PharmaNetics and Aventis for use with Lovenox® (enoxaparin sodium) Injection for the treatment and management of certain patients with arterial thrombosis.

In addition, the Company completed an initial development milestone with a platelet function theranostic test, which monitors the effect of platelet inhibitors, and extended its development agreement with Bayer Corporation to fund the next phase of the test development. The Company believes that both transactions are important steps in expanding the Company's product offering and positioning the Company as the leader in the emerging theranostic marketplace.

The Company also announced that, during the next four months, it has the potential to initiate two new clinical trials for monitoring thrombolytics and a thrombin inhibitor being used for a new large cardiovascular indication. In addition, initial enoxaparin trials should be completed, a new reagent source for monitoring a sepsis therapy should become available, and the acquisition of new platelet technology should be completed. Further, the Company is focusing efforts to attract specialty pharmaceutical interest in joint venturing acquisitions of therapeutics that require a coagulation management test. The Company believes that better management of certain drugs could create significant new market opportunities for PharmaNetics. PharmaNetics wants to partner with specialty pharmaceuticals to acquire equity interest in targeted therapeutics.

PharmaNetics, Inc., a leading biotech company, conceived the term "theranostics," defining an emerging new field of medicine that enables physicians to therapeutically manage coagulation parameters of their patients in the treatment of angina, myocardial infarction (heart attack), stroke, and pulmonary and arterial emboli. The Company's proprietary diagnostic platform generates rapid feedback on blood clot formulation and dissolution. The Company's technology platform is the primary driver of existing collaborations with a number of major pharmaceutical companies, including Aventis Pharmaceuticals, AstraZeneca and Knoll BASF, to develop theranostic tests for specific compounds and disease indications being developed by these corporations. If those drugs receive FDA approval, PharmaNetics' tests could become an essential component of the treatment modality of these drugs affecting coagulation.

A listen-only simulcast and 48-hour replay of PharmaNetics' third quarter conference call will be available online at www.unispheremag.com, www.streetevents.com or www.vcall.com on October 31, 2000, beginning at 11:00 a.m. Eastern time.

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 and dependence on third-party distributors and collaborative partners that could cause actual results to differ materially form those projected in the forward-looking statements. Information concerning these and other of the factors that could cause results to differ materially from those in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission, including Form 10-K, Form 10-Q and Form 8-K reports.

PHARMANETICS, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)

CONSOLIDATED INCOME (LOSS) STATEMENTS

Three Months Ended Six Months Ended

Sept. 30, 2000

Sept. 30, 1999

Sept. 30, 2000

Sept. 30, 1999

Net revenue
$743

$745

$3,609

$2,882

Cost of goods sold
788

764

2,670

2,358

Gross profit
(45)

(19)

939

524

Operating expenses
2,008

1,480

5,804

4,545

Loss from operations
(2,053)

(1,499)

(4,865)

(4,021)

Other income (expense), net
304

100

815

60

Loss from continuing operations
(1,749)

(1,399)

(4,050)

(3,961)

Income from operations of discontinued segment
-

-

-

18

Loss on disposal of segment
-

-

-

(826)

Net loss
($1,749)

($1,399)

($4,050)

($4,769)

Dividends on preferred stock

168

-

417

-

Amortization of beneficial conversion feature of Series A Convertible Preferred Stock

-

-

976

-

Net loss applicable to common shareholders
($1,917)

($1,399)

($5,443)

($4,769)

Basic and diluted loss per common share

($0.25)

($0.19)

($0.72)

($0.64)

Basic and diluted weighted average shares outstanding
7,676

7,477

7,594

7,466

CONSOLIDATED BALANCE SHEETS

Sept. 30, 2000

December 31, 1999

Cash and investments
$12,188

$5,161

Other current assets
2,579

2,486

Total assets
$19,290

11,647

Current liabilities
$2,143

1,177

Total liabilities
2,373

2,039

Shareholder's equity & Series A Preferred Stock
16,917

9,608

Total liabilities and equity
$19,290

$11,647