Protein Polymer Technologies Reports Third Quarter 1996 Financial Results

    SAN DIEGO, Oct. 25, 1996 -- Protein Polymer Technologies, Inc.(Nasdaq: PPTI), reported today a net loss applicable to common shareholders of $719,000 ($.10 a share) for the third quarter ended September 30, 1996, as compared to a net loss of $152,000 ($.03 a share) for the comparable period a year ago.  For the nine months ended September 30, 1996 and 1995, the net losses applicable to common shareholders were $2,410,000 ($.37 a share) and $1,721,000 ($.30 a share) respectively.  The net loss and loss per share figures include accumulated and/or paid dividends related to the Company's preferred stock.
    Sales, contract revenues and interest income totaled $357,000 for the quarter, compared to $841,000 for the same period last year.  The current quarter includes $300,000 in research and development reimbursements from Ethicon, Inc. (Ethicon), a subsidiary of the Johnson & Johnson Company.  The comparable period last year included an $800,000 payment upon the signing of a licensing and development agreement with Ethicon.  For the nine months ended September 30, 1996 total revenues were $521,000, compared to $932,000 in the prior year.
    Operating expenses for the quarter were $953,000, as compared to $732,000 for the same period in 1995, a 30% increase.  For the nine months ended September 30, 1996 and 1995, operating expenses were $2,563,000 and $2,392,000 for 1996 and 1995 respectively, a 7% increase.  These increases were attributed to expanded research and development activities as required for its ongoing surgical adhesives and sealants efforts with Ethicon, and increased patent and investor relations efforts over the past year.
    "We are dedicated to strengthening our relationship with our corporate partner Ethicon in developing a new generation of surgical adhesives and sealants," said J. Thomas Parmeter, PPTI's President and Chief Executive Officer.  "We are also actively pursuing partnerships to accelerate the development of products in the area of protein-based coatings for contact lenses and cardiovascular applications.  In addition, our cash position has improved during the quarter due to the exercise of privately held warrants."
    Protein Polymer Technologies, Inc. is a development stage biomaterials company focused on surgical repair and drug delivery.  PPTI's genetically engineered protein-based biomaterials are specifically designed to control or direct the activities of mammalian cells.  Product candidates being developed include tissue adhesives and sealants, drug delivery systems, wound healing materials and surgical adhesion barriers.  PPTI also markets a line of activated cell culture products under the trade names of ProNectin(R) and SmartPlastic(R).