CONTACTS AT THE COMPANY AT THE FINANCIAL RELATIONS BOARD
Robert V. Toni, President & CEO
J. Blount Swain, CFO
CLOSURE Medical Corporation
(919) 876-7800
For General Info: Paul G. Henning (212) 661-8030
For Analyst Info: Brian Gill (212) 661-8030
For Media Info: Deanne Eagle (212) 661-8030

FOR IMMEDIATE RELEASE: April 20, 1998

CLOSURE MEDICAL CORPORATION ANNOUNCES FIRST QUARTER RESULTS

Raleigh, NC, April 20, 1998-- CLOSURE Medical Corporation (Nasdaq: CLSR), a medical tissue cohesive products company, today announced that total revenues for the first quarter ended March 31, 1998 were $770,000 compared to $208,000 for the quarter ended March 31, 1997. The net loss for the 1998 quarter was $1.9 million, or ($.15) per share, compared to a net loss of $1.5 million, or ($.12) per share in the corresponding 1997 period.

Cash and cash equivalents and total investments were $22.3 million at March 31, 1998 compared to $24.5 million at December 31, 1997.

On January 30, 1998 the General and Plastic Surgery Devices Panel, a Food and Drug Administration (FDA) advisory committee, unanimously recommended "approval with conditions" of DERMABOND* as a wound closure device. DERMABOND topical skin cohesive is based on CLOSURE’s proprietary cyanoacrylate technology.

In recommending approval of the Closure PMA, The Advisory Panel reviewed an 818 patient ten-center clinical study designed to demonstrate that DERMABOND topical skin cohesive is a safe and effective alternative to topical sutures used in the closure of certain incisions and lacerations. Procedures performed in the clinical trials included emergency lacerations, minimally invasive puncture sites, plastic and reconstructive surgeries, and general surgical incisions. The trials demonstrated DERMABOND topical skin cohesive to be at least equivalent to nonabsorbable 5.0 or smaller diameter sutures, staples or adhesive strips/tapes in wound closure, wound healing, cosmetic outcome and infection rate and also demonstrated that the use of DERMABOND topical skin cohesive substantially reduced procedure time.

"The panel recommendation was a historic milestone for our Company, and we are pleased that our work and advancement toward the introduction of tissue cohesives for wound closure in the U.S. has received this important validation," said Robert Toni, President and Chief Executive Officer. "We are working closely with the FDA to complete the last steps necessary for commercialization.

CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina, develops, manufactures and commercializes medical tissue cohesive products based on its proprietary cyanoacrylate technology. CLOSURE’s nonabsorbable tissue cohesive products may be used to replace sutures and staples for certain topical wound closure applications, while its absorbable tissue cohesive products can potentially be used as surgical sealants and tissue cohesives for internal wound closure and management. Currently marketed nonabsorbable tissue cohesive products include DERMABOND* topical skin cohesive, which is used to replace sutures and staples for closure of certain lacerations and incisions; OCTYLDENT* cohesive, which is used as an adjunct in the treatment of adult periodontal disease; and the NEXABAND* line of topical tissue cohesives, which are used in veterinary wound closure and management.

*DERMABOND is a Trademark of Ethicon, Inc.; OCTYLDENT and NEXABAND are registered Trademarks of CLOSURE Medical Corporation.

To receive CLOSURE’s latest news release and other corporate documents via FAX -- at no cost -- dial 1-800-PRO-INFO. Use Company’s ticker-CLSR.

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’s products; scale-up of manufacturing processes; 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, 1997 and filed with the Securities and Exchange Commission.

Financial Information Follows:

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

 
March 31,1998
December 31,1997
Assets
Unaudited  
Current assets:
Cash and cash equivalents
$ 4,821
$ 7,277
Short-term investments
13,367
14,417
Accounts receivable
431
1,226
Inventories
538
347
Prepaid expenses
361
367
 
Total current assets
19,518
23,634
 
Furniture, fixtures and equipment, net
5,821
3,694
Restricted investments
1,539
1,517
Long-term investments
2,579
1,298
Intangible assets, net
376
276
 
Total assets
$ 29,833
$ 30,419
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
$ 1,342
$ 478
Accrued expenses
1,487
2,598
Deferred revenue
2,025
2,019
Capital lease obligations
98
155
Current portion of long-term debt
350
350
 
Total current liabilities
5,302
5,600
 
Capital lease obligations
1,251
1,250
Long-term debt less current portion
2,650
1,150
 
Total liabilities
9,203
8,000
 
Stockholders’ equity:
Preferred Stock, $.01 par value. Authorized 2,000 shares;none issued or outstanding.
-
-
Common Stock, $.01 par value. Authorized 35,000,000 shares; issued and outstanding 13,251,681 shares.
133
132
Additional paid-in capital
46,149
46,058
Accumulated deficit
(25,031)
(23,075)
Deferred compensation on stock options
(621)
(696)
 
Total stockholders’ equity
20,630
22,419
 
Total liabilities and stockholders’ equity
$29,833
$ 30,419

 

CLOSURE Medical Corporation
Statement of Operations
(Unaudited)
(In thousands, except per share data)

 
THREE MONTHS ENDED
 
March 31,
 
1998
1997
         
Product sales
$ 770
$ 208
License and product development revenues
-
-
Total revenues
770
208
Cost of products sold
534
151
Gross profit
236
57
 
Research, development and regulatory affairs expenses
1,358
750
Selling and administrative expenses
1,100
1,062
Total operating expenses
2,458
1,812
 
Loss from operations
(2,222)
(1,755)
Interest expense
(88)
(1)
Investment and interest income
354
260
     
Net loss
$(1,956)
$(1,496)
 
Shares used in computation of net loss per share-basic and diluted:
13,252
12,210
 
Net loss per share-basic and diluted
$(0.15)
$ (0.12)