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: : Paula Schwartz (212) 661-8030
For Analyst Info: Julie Tu (212) 661-8030
For Media Info: Judith Sylk-Siegel (212) 661-8030

FOR IMMEDIATE RELEASE: April 24, 2001

CLOSURE Medical Corporation Reports First Quarter Profit

Highlights

RALEIGH, N.C., April 24 -- CLOSURE Medical Corporation (Nasdaq: CLSR), a medical tissue adhesive products company, today announced financial and operating results for the period ended March 31, 2001.

Total revenues for the three months ended March 31, 2001 were $3,917,000, a 39% increase over revenue of $2,822,000 in the corresponding period of 2000.

Net income for the first quarter of 2001 was $269,000, or $0.02 per basic and diluted common share, compared to a net loss of $3,118,000, or ($0.23) per basic and diluted common share in the corresponding 2000 period. As required by the Securities and Exchange Commission, the Company's adoption of Staff Accounting Bulletin No. 101 resulted in the amendment of the March 31, 2000 results from the previously filed Form 10-Q and includes a $2,656,000 charge for the cumulative effect of a change in accounting principle. Earnings before the cumulative effect of accounting change were a loss of $462,000 in the comparable quarter of 2000.

Total cash, cash equivalents and investments decreased to $10.3 million at March 31, 2001 compared to $11.8 million at December 31, 2000. This decrease resulted primarily from the timing of shipments, specifically a new DERMABOND® adhesive line extension utilizing a "chisel tip" configuration (see "First Quarter Milestones"), which occurred later in the quarter and the seasonal payment of accrued liabilities.

Commenting on today's news, Robert V. Toni, President and Chief Executive Officer of CLOSURE Medical, stated, "Our positive earnings announcement today is another milestone for the Company and further demonstrates our commitment to the ultimate goal of maximizing value for our shareholders. Based upon first quarter 2001 results, we can reaffirm our previously stated full-year 2001 EPS guidance of $0.15 to $0.20 per basic and diluted common share, as provided in January."

First Quarter Milestones
During the quarter ended March 31, 2001, Closure and its marketing partners introduced two new products. In February, the first shipment of SOOTHE-N-SEAL™ canker sore relief, an over-the-counter ("OTC") product to treat oral ulcers and mouth sores, was delivered to the Company's marketing partner, Colgate Oral Pharmaceuticals, Inc., for launch to both professionals and consumers. Additionally, in March, a new DERMABOND® adhesive line extension utilizing a "chisel tip" configuration versus the original "dome tip", was shipped to Ethicon, Inc., a subsidiary of Johnson & Johnson and the Company's marketing partner for DERMABOND® adhesive.

Mr. Toni continued, "Although a majority of Closure's revenue is generated from the sale of DERMABOND® adhesive, the introduction of the SOOTHE-N-SEAL™ product and new DERMABOND® adhesive line extension provides the Company with important expansion of its product portfolio. It also reflects one of our major focuses which is aggressive new product development."

Two additional milestones were achieved during the quarter ended March 31, 2001. First, in January 2001 the Company was notified of FDA clearance for its LIQUIDERM™ liquid adhesive bandage, an OTC product which can be used for the treatment of minor cuts and abrasions. The Company expects to sign a distribution agreement with a top-tier marketing partner for the LIQUIDERM™ liquid adhesive by mid-year 2001, leading to an initial consumer launch of the product during the first quarter of 2002.

Also during the quarter, the Company signed a Cooperative Research and Development Agreement with Walter Reed Army Medical Center and Uniformed Services University of the Health Sciences for the development of an internal medical adhesive to be used in the treatment of emphysema. The partnership is currently conducting additional animal studies to optimize the Endobronchial Lung Volume Reduction procedure prior to entering human clinical trials.

Products
DERMABOND® Topical Skin Adhesive is a topical tissue adhesive used to close wounds from skin lacerations and incisions, minimally invasive surgery and plastic surgery. DERMABOND® adhesive can be used as a replacement for topical sutures or staples and is marketed and distributed by Ethicon Inc., a subsidiary of Johnson & Johnson and the world leader in wound closure products.

SOOTHE-N-SEAL™ adhesive forms a protective barrier that shields oral ulcers from irritation due to eating and drinking while providing immediate and long-term pain relief. Additionally, the product utilizes the same proprietary technology as the Company's professional product, DERMABOND® adhesive. SOOTHE-N-SEAL™ adhesive is in the early stages of the product launch to the professional and consumer markets by Colgate Oral Pharmaceuticals, Inc. LIQUIDERM™ adhesive is the first and only cyanoacrylate medical device approved by the FDA for the OTC adhesive bandage market. LIQUIDERM™ adhesive is painted on the wound, sealing it from dirt and germs, creating a healing environment which allows natural healing to take place quickly. As the wound heals, the adhesive sloughs off naturally. CLOSURE's negotiations with a top-tier marketing partner include rights to its LIQUIDERM™ adhesive and its overall OTC wound care platform, including distribution rights to all present and future products, except for SOOTHE-N-SEAL™ adhesive.

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: DERMABOND® Topical Skin Adhesive, which is used to replace sutures and staples for closure of certain lacerations and incisions; SOOTHE-N-SEAL™ canker sore relief, an over-the-counter product to treat oral ulcers and mouth sores; and NEXABAND® topical adhesives used in veterinary wound closure and management. The Company's LIQUIDERM™ liquid adhesive bandage has been approved by the FDA for the over-the-counter adhesive bandage market.

DERMABOND® adhesive is a registered trademark of Ethicon, Inc.; SOOTHE-N-SEAL™ adhesive is a licensed trademark of Colgate Oral Pharmaceuticals, Inc.; LIQUIDERM™ adhesive is a trademark of CLOSURE Medical Corporation; and NEXABAND® adhesive is a registered trademark 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; the satisfactory conclusion of negotiations with, and 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, 2000 filed with the Securities and Exchange Commission.

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

 
THREE MONTHS ENDED MARCH 31,
 
2001
2000
     
Product sales
$ 3,738
$ 2,666
License and product development revenues
179
156
Total revenues
3,917
2,822
Cost of products sold
1,167
816
Gross profit
2,750
2,006
 
Research, development and regulatory affairs expenses
1,280
1,466
General and administrative expenses
1,330
1,124
Total operating expenses
2,610
2,590
 
Income (loss) from operations
140
(584)
Interest expense
(46)
(58)
Investment and interest income
175
180
Income (loss) before cumulative effect of accounting change
269
(462)
Cumulative effect of accounting change*
-
(2,656)
Net income (loss)
$269
$(3,118)
   
Shares used in computation of net income (loss) per share:  
Basic
13,441
13,353
Diluted
13,710
13,353
   
Net income (loss) per common share:  
Basic and diluted
$0.02
$(0.23)

* See the Company's Annual Report on Form 10-K for the year ended December 31, 2000.

CLOSURE Medical Corporation
Balance Sheet Data
(In thousands)

 
December 31, 2000
December 31, 1999
Cash, cash equivalents and investments
$ 10,297
$ 11,832
Working capital
8,661
8,462
Total assets
21,222
22,139
Total debt obligations
1,336
1,487
Total stockholders' equity
14,358
13,907
     
Total shares outstanding
13,446
13,428