For Immediate Release: July 23, 2002

Contact: Allen & Caron Inc   CLOSURE Medical Corp
  Rob Weir (investors Len Hall (media) Benny Ward, CFO
  (212) 691-8087 (949) 474-4300 (919) 876-7800
  joe@allencaron.com len@allencaron.com  

CLOSURE MEDICAL REPORTS SECOND QUARTER 2002 RESULTS

Earnings Double as DERMABOND and Liquid Bandage Sales Increase
High Viscosity DERMABOND Clinical Trial Completed

RALEIGH, NC (July 23, 2002) . . . CLOSURE Medical Corporation (Nasdaq:CLSR), a leader in medical tissue adhesives for wound closure and wound care, announced today that earnings for the second quarter ended June 30, 2002 more than doubled to $958,000, or $0.07 per share, compared to the year-earlier period when net income was $441,000, or $0.03 per share. Revenues were up by 28 percent for the quarter to $5.7 million from $4.4 million for the same period last year. For the six months ended June 30, 2002 revenues were $11.1 million, a gain of 33 percent over the $8.3 million reported for the same period of 2001. Earnings for the six months grew faster than revenues reflecting the advantages of volume operations, as well as close control of expenses. For the six months, net income was $1.8 million or $0.13 per share, a strong increase over the $710,000 or $0.05 per share reported for the first six months of 2001.

President & CEO Robert V. Toni commented, “Our main revenue contributors, DERMABOND Topical Skin Adhesive and the liquid bandage product, have realized significant exposure during the quarter as a result of the consumer-oriented marketing campaigns, including television advertising and other media, initiated by our Johnson & Johnson partners. Although it is still early, we are encouraged by the initial feedback from the launch of the liquid bandage by Johnson & Johnson Consumer Products. Also, Ethicon has initiated a direct-to-consumer television and print campaign, the first time ever for any of its products, to increase awareness and preference for DERMABOND adhesive among consumers. We are optimistic that these campaigns will continue to drive awareness of our products to higher levels, providing for sales improvements.”

“In addition, we have completed the enrollment and follow-up of an 84-patient definitive clinical trial for a high-viscosity version of DERMABOND adhesive. This version is our second product line extension and will allow for more precise application without the “rundown” experienced with the less viscous versions. Once the data from the trial is assembled, we will seek marketing clearance for the product through submission of an amendment to our current PMA supplement.”

At June 30, 2002, the Company had cash and investments of $13.4 million, a current ratio of 3.7:1, and stockholders’ equity of $19.4 million which compares favorably to total debt of $778,000. Benny Ward, CFO, noted that the Company has refinanced its equipment term loan by incorporating the outstanding portion of the loan, approximately $640,000 at June 30, 2002, within the Company’s $3.0 million line of credit. The line of credit was also extended from a one-year to a more attractive two-year facility.

About CLOSURE Medical Corporation
CLOSURE Medical Corporation is a global leader in the development, manufacture, and commercialization of medical adhesive brands for wound closure and care based on its proprietary medical grade cyanoacrylate technology. CLOSURE’s proprietary technology has customized the physical and chemical properties of cyanoacrylates to develop medical adhesive formulations to close and seal topical skin wounds and incisions.

For additional information on CLOSURE Medical visit its website at www.closuremed.com or visit the "Clients" section of the Allen & Caron website at www.allencaron.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’s 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, 2001, filed with the Securities and Exchange Commission. Although the Company believes that the expectations in the forward-looking statements are reasonable, the Company cannot guarantee such results. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

Financial Tables Follow

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

 
THREE MONTHS ENDED
SIX MONTHS ENDED
 
June 30
June 301
 
2002
2001
2002
2001
         
Product sales
$ 5,399
$ 4,227
$ 10,554
$ 7,965
License and product development revenues
258
181
503
360
Total revenues
5,657
4,408
11,057
8,325
Cost of products sold
1,614
1,166
3,277
2,334
Gross profit
4,043
3,242
7,780
5,991
 
Research, development and regulatory affairs expenses
1,743
1,455
3,343
2,735
General and administrative expenses
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