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: July 24, 2001

CLOSURE Medical Corporation Reports Record Revenues for the Second Quarter And First Half of 2001

Highlights

Raleigh, NC, July 24, 2001 -- CLOSURE Medical Corporation (Nasdaq: CLSR), a medical tissue adhesive products company, today announced record revenues for the second quarter and six months ended June 30, 2001.

Total revenues for the three months ended June 30, 2001 were $4,408,000 up 37% from $3,228,000 in the corresponding period of 2000, and up 13% from $3,917,000 in the first quarter of 2001. Net income for the second quarter of 2001 was $441,000, or $0.03 per basic and diluted common share, compared to a net loss of $488,000, or ($0.04) per basic and diluted common share in the corresponding 2000 period and net income of $269,000, or $0.02 per basic and diluted common share in the first quarter of 2001.

Total revenues for the first six months of 2001 were $8,325,000, a 38% increase, compared to $6,050,000 in the first half of 2000. Previously, the record revenue for a comparable period was $8,094,000 for the six months ending June 30, 1999. For the first six months of 2001, net income was $710,000, or $0.05 per basic and diluted common share, compared to a net loss of $3,606,000, or ($0.27) per basic and diluted common share for the same period of 2000. As of June 30, 2001, cash, cash equivalents and investments totaled $11,711,000 compared to $10,297,000 at March 31, 2001 and $11,832,000 at December 31, 2000.

Commenting on today's news, Robert V. Toni, President and Chief Executive Officer of CLOSURE Medical, stated, "Our business continues to strengthen with each milestone achieved. We were pleased to announce during the second quarter that a worldwide supply, distribution and development rights agreement had been signed with Johnson & Johnson Consumer Products Company for our second over-the-counter ("OTC") product, LIQUIDERM(TM) liquid adhesive bandage, which is planned to be launched to the consumer in the first quarter of 2002. Additionally, last week, we signed our third distribution agreement within the last seven months with another top tier partner, Abbott Laboratories ("Abbott"), granting rights to our NEXABAND® veterinary product line."

Mr. Toni continued, "As noted above, both revenue and earnings continue to improve, which is primarily attributable to increased DERMABOND sales accompanied by the additional revenue generated from the launch of SOOTHE-N-SEAL(TM) canker sore relief by our distribution partner Colgate Oral Pharmaceuticals. As we build on these year-to-date accomplishments, we expect to reach our full year 2001 EPS target of $0.15 to $0.20 per basic and diluted common share resulting from revenues of $18 to $20 million."

About Closure Medical
CLOSURE Medical Corporation, headquartered in Raleigh, North Carolina, develops, manufactures, and commercializes medical tissue adhesive products based on its proprietary 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, as well as formulations to close or seal internal wounds. In addition to its products discussed herein, CLOSURE is also developing internal adhesives for the possible treatment of emphysema, as well as developing liquid occlusive dressings for the treatment of a variety of partial thickness wounds, including pressure ulcers and skin tears.

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 division of Johnson & Johnson, the world leader in wound closure products.

LIQUIDERM(TM) adhesive is the first and only cyanoacrylate medical device approved by the FDA for the OTC adhesive bandage market. LIQUIDERM(TM) adhesive is painted on the wound, sealing it from dirt and germs, and creating a healing environment which allows natural healing to take place quickly. As the wound heals, the adhesive sloughs off naturally. CLOSURE recently signed a worldwide supply, distribution and development rights agreement with Johnson & Johnson Consumer Products Company which includes rights to its LIQUIDERM(TM) adhesive and its overall OTC wound care platform, including distribution rights to all present and future products, except for SOOTHE-N-SEAL(TM) adhesive. Distribution of LIQUIDERM(TM) adhesive by Johnson & Johnson Consumer Products Company is expected to begin in early 2002.

SOOTHE-N-SEAL(TM) adhesive is indicated for the treatment of oral ulcers and mouth sores. It forms a protective barrier that shields oral ulcers from irritation due to eating and drinking while providing immediate and long-term pain relief. SOOTHE-N-SEAL(TM) adhesive is in the early stages of the product launch to the professional and consumer markets by Colgate Oral Pharmaceuticals, Inc.

The NEXABAND® liquid adhesive line consists of two products used in veterinary wound closure and wound care. The adhesives are used in cat declaw procedures as well as spay and neuter procedures. In July 2001, the Company entered into an agreement providing Abbott with worldwide supply, distribution and development rights to the NEXABAND® product line. In accordance with the agreement, Abbott has been granted immediate worldwide distribution rights of NEXABAND® adhesives excluding the United States and Canada. Upon the expiration of the Company's prior distribution arrangement in the second quarter of 2002, Abbott can begin the distribution of NEXABAND® products in the United States and Canada.

DERMABOND adhesive is a registered trademark of Ethicon, Inc.; SOOTHE-N- SEAL(TM) is a licensed trademark of Colgate Oral Pharmaceuticals, Inc.; LIQUIDERM(TM) is a trademark of CLOSURE Medical Corporation; and NEXABAND® 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/BSMG Worldwide 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
(In thousands, except per share data)

 
THREE MONTHS ENDED
NINE MONTHS ENDED
 
June 30
June 30
 
2001
2000
2001
2000
         
Product sales
$ 4,227
$ 3,072
$ 7,965
$ 5,738
License and product development revenues
181
156
360
312
Total revenues
4,408
3,228
8,325
6,050
Cost of products sold
1,166
981
2,334
1,797
Gross profit
3,242
2,247
5,991
4,253
 
Research, development and regulatory affairs expenses
1,455
1,600
2,735
3,066
General and administrative expenses
1,444
1,257
2,773
2,381
Total operating expenses
2,899
2,857
5,508
5,447
 
Income (loss) from operations
343
(610)
483
(1,194)
Interest income, net
108
122
237
244
Income (loss) before taxes
451
(488)
720
(950)
Provision for income taxes
(10)
-
(10)
-
Income (loss) before cumulative effect of accounting change
441
(488)
710
(950)
Cumulative effect of accounting change*
-
-
-
(2,656)
Net income
$ 441
$(488)
$ 710
$(3,606)
 
Shares used in computation of net income (loss) per common share:
Basic
13,450
13,380
13,445
13,309
Diluted
13,722
13,380
13,722
13,309
Net income (loss) per common share:
Basic and diluted
$ 0.03
$(0.04)
$0.05
$(0.27)

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

CLOSURE Medical Corporation
Balance Sheet
(In thousands)

 
June 30, 2001
December 31, 2000
Cash, cash equivalents and investments
$11,711
$11,832
Working capital
9,107
8,462
Total assets
22,220
22,139
Total debt obligations
1,236
1,487
Total stockholders' equity
14,995
13,907
 
Total shares outstanding
13,469
13,428