Company Focuses on Aids and Cancer Following Pacific Pharmaceuticals Acquisition CAMBRIDGE, Mass., May 24 /PRNewswire/ -- Procept, Inc. (Nasdaq: PRCT) today announced its financial results for the first quarter ended March 31, 1999. The Company reported a net loss of $0.6 million or $0.16 per share, prior to a non-recurring charge of $9.4 million associated with the acquisition of Pacific Pharmaceuticals, Inc. ("Pacific"). This net loss represents an improvement over the first quarter of 1998 when the Company reported a net loss of $1.4 million or $2.69 per share. The decrease in the net loss resulted from lower operating expenses, mainly as a result of scaling back research expenditures consistent with the Company's in-licensing and clinical development strategy. As previously announced, Procept consummated its acquisition of Pacific mainly with the issuance of Procept common stock. For the three months ended March 31, 1999, the net loss including the non-recurring charges associated with the acquisition of Pacific was $10.0 million or $2.69 per share. As of March 31, 1999, the Company had cash, cash equivalents and marketable securities of $6.6 million. The increase in cash is primarily attributable to the acquisition of Pacific which resulted in a cash infusion of approximately $2.8 million. Based upon its planned utilization of cash ("burn rate") going forward, the Company expects that its current resources, combined with anticipated government support, will be sufficient to fund Procept's operations and clinical development through June 2000. "We continue to make significant progress in implementing Procept's clinical development strategy," said John F. Dee, President and Chief Executive Officer of Procept, Inc. With the Pacific acquisition, we now have three compounds in human clinical trials focused on AIDS and cancer. These compounds have the potential for significant medical advancement and accelerated approval. In addition, PRO 2000 Gel and O6-benzylguanine have government support and funding, which should allow the Company to advance clinical trials and improve the potential for securing corporate partnerships." Procept, Inc., located in Cambridge, MA, is a biopharmaceutical company currently engaged in the in-licensing, development and commercialization of novel drugs with a focus on anti-infectives and oncology. The Company's lead AIDS product, PRO 2000 Gel, is being developed as a female-controlled topical microbicide for the prevention of HIV infection and other sexually transmitted diseases. O6-benzylguanine is a chemosensitizing agent designed to break down tumor resistance and therefore enhance the efficacy of certain chemotherapeutic agents in several cancer indications. The proprietary photodynamic therapy compound, Boronated Protoporphyrin, is designed to be used with lasers to selectively kill fast growing cells and may be suitable to treat cancer, pre-cancer and various other medical conditions including macular degeneration. Each of these compounds is in human clinical trials. The Company continues its search for new in-licensing and acquisition opportunities. Certain statements in this press release constitute "forward-looking statements" that involve risks and uncertainties, including those arising under the Company's business strategy; the success of the Company in financing efforts; the pursuit of collaborative arrangements for research and development of product candidates, as well as the pursuit of joint development or licensing arrangements with pharmaceutical, diagnostic or instrumentation companies; the research or development of particular products, compounds or technologies; the uncertainty of the results of such development activities and related clinical trials or required regulatory approvals; and the reliance on collaborative partners and governments for development, regulatory or marketing activities. PROCEPT, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) Three Months Ended March 31 1999 1998 Revenues $82 $114 Costs and expenses: Research and development 219 813 General and administrative 490 522 Charge for purchased in process research and development 9,406 -- Restructuring charges -- 225 Other income (expense) (43) 1 Total costs and expenses 10,072 1,561 Net loss $(9,990) $(1,447) Net loss per common share $(2.69) $(2.69) Weighted-average number of common shares outstanding -- basic and diluted 3,719,797 537,321 CONDENSED BALANCE SHEETS (in thousands) March 31, December 31, 1999 1998 Assets Cash and cash equivalents $5,587 $2,285 Marketable securities 1,002 2,003 Other current assets 500 1,353 Total current assets 7,089 5,641 Property and equipment, net 138 180 Deferred charges -- 176 Other assets 191 191 Total assets $7,418 $6,188 Liabilities and Shareholders' Equity Accounts payable $569 $269 Notes payable 200 -- Other current liabilities 1,292 337 Total current liabilities 2,061 606 Other noncurrent liabilities 180 186 Total liabilities 2,241 792 Minority interest 4,663 -- Shareholders' equity: Common stock 73 30 Additional paid-in capital 75,643 70,370 Accumulated deficit (75,190) (64,992) Treasury stock (12) (12) Total shareholders' equity 514 5,396 Total liabilities and shareholders' equity $7,418 $6,188  