CONTACTS AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Robert V. Toni, President & CEO
Benny Ward, CFO
CLOSURE Medical Corporation (919) 876-7800
For General Info: Stuart Z. Levine, Ph.D. (212) 661-8030
For Analyst Info: Cecelia Heer (212) 661-8030
For Media Info: Deanne Eagle (212) 661-8030

FOR IMMEDIATE RELEASE: October 26, 2000

CLOSURE MEDICAL CORPORATION REPORTS THIRD QUARTER RESULTS

Raleigh, NC, October 26, 2000 -- CLOSURE Medical Corporation (Nasdaq: CLSR), a medical device company engaged in developing, manufacturing and commercializing tissue adhesive products, today announced financial results for the third quarter and nine months ended September 30, 2000.

Third-quarter 2000 revenues were $3,565,000, a 31% increase from $2,732,000 in the corresponding 1999 period, and representing a 16% gain over $3,072,000 in the second quarter of 2000. This was also the third consecutive improvement in quarterly revenues. For the nine months ended September 30, 2000, revenues were $9,302,000 compared to $10,826,000 for the nine months ended September 30, 1999.

The net loss for the third quarter of 2000 narrowed to $243,000, or ($0.02) per basic and diluted common share, compared to a net loss of $1,204,000, or ($0.09) per basic and diluted common share in the third quarter of 1999. For the nine months of 2000, the net loss was $1,505,000, or ($0.11) per basic and diluted share, compared to a net loss of $1,754,000, or ($0.13) per basic and diluted share for the same period of 1999.

As of September 30, 2000, cash, cash equivalents, and total investments were $11.0 million compared to $12.6 million at December 31, 1999.

Robert V. Toni, President and CEO, remarked, “In addition to quarterly improvements in our sales performance, we continue to push forward on negotiations for separate distribution agreements for two over-the-counter (OTC) product platforms. We anticipate the completion of an agreement by year-end for our oral product platform which includes SOOTHE-N-SEAL™ canker sore relief, the Company’s first OTC product to be approved by the Food and Drug Administration (FDA). In addition, we are in negotiations to obtain a partner for our OTC wound care platform for distribution of all of our present and future products, including LIQUIDERM™ liquid adhesive bandage, excluding the OTC rights to SOOTHE-N-SEAL™ adhesive.”

Mr. Toni concluded by noting, “Additionally, we are now well advanced into the review period on the pending 510(k) premarket approval application for LIQUIDERM ™ liquid adhesive bandage which was filed with the FDA on August 1, 2000.”

SOOTHE-N-SEAL™ canker sore relief provides immediate and long-term pain relief associated with oral ulcers and also forms a protective barrier that protects the ulcer from irritation due to eating and drinking. LIQUIDERM™ liquid adhesive bandage is for use in the treatment of minor cuts, abrasions, burns, minor irritations and helps protect them from infection.

CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina, develops, manufactures and commercializes medical tissue adhesive products based on its proprietary cyanoacrylate technology. CLOSURE's nonabsorbable tissue adhesive products may be used to replace sutures and staples for certain topical wound closure applications, while its internal tissue adhesive products can potentially be used for internal wound closure and management. Currently marketed nonabsorbable tissue adhesive products include DERMABONDâ* Topical Skin Adhesive, which is used to replace sutures and staples for closure of certain lacerations and incisions; OCTYLDENTâ* adhesive, which is used as an adjunct in the treatment of adult periodontal disease; and the NEXABANDâ* line of topical adhesives, which are used in veterinary wound closure and management.

* DERMABONDâ adhesive is a trademark of Ethicon, Inc.; SOOTHE-N-SEAL™ canker sore relief and LIQUIDERM™ adhesive are trademarks of CLOSURE Medical Corporation. OCTYLDENTÒ adhesive and NEXABANDÒ adhesives are federally registered trademarks of CLOSURE Medical Corporation.

To receive CLOSURE’s latest news release and other corporate documents via fax, at no cost, call 1-800-PRO-INFO, use the Company’s symbol CLSR. Or visit the Financial Relations Board's website at www.frbinc.com.

This release contains certain forward-looking statements which involve known and unknown risks, delays, uncertainties or other factors not under the Company's control which may cause actual results, performance or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to the early stage of commercialization of the Company products; the progress of its research and development programs for future products; the need for regulatory approval and effects of governmental regulation; technological uncertainties; dependence on marketing partners, and dependence on patents and trade secrets, as well as those detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 1999 filed with the Securities and Exchange Commission

Financial Tables Follow

CLOSURE Medical Corporation
Balance Sheets
(In thousands, except per share data)

 
September 30, 2000
Unaudited
December 31, 1999
 
Assets
Cash and cash equivalents
$180
$ 508
Short-term investments
7,919
9,299
Restricted investments
1,588
1,515
Accounts receivable, net
1,381
732
Inventories
730
591
Prepaid expenses
131
326
Total current assets
11,929
12,971
Restricted investments
1,294
1,292
Furniture, fixtures and equipment, net
6,983
7,351
Intangible assets, net
1,234
897
Total assets
$ 21,440
$ 22,511
 
Liabilities and Stockholders' Equity
Accounts payable
$ 1,281
$1,110
Accrued expenses
1,366
794
Deferred revenue
227
443
Capital lease obligations
311
279
Current portion of long-term debt
600
600
Total current liabilities
3,785
3,226
Deferred revenue
505
505
Capital lease obligations less current portion
417
655
Long-term debt less current portion
1,036
1,500
Total liabilities
5,743
5,886
Commitments and Contingencies
-
-
Preferred Stock, $.01 par value. Authorized 2,000 shares; none issued or outstanding
-
-
Common Stock, $.01 par value. Authorized 35,000 shares;
issued and outstanding 13,411 and 13,347 shares, respectively
134
133
Additional paid-in capital
47,443
46,940
Accumulated deficit
(31,880)
(30,375)
Deferred compensation on stock options
-
(73)
Total stockholders' equity
15,697
16,625
Total liabilities and stockholders' equity
$21,440
$22,511

 

.