Protein Polymer Announces Completion of Private Placement, Additional Investment Raises Total to $5.4 Million

Directors Elected During Annual Meeting of Stockholders

    SAN DIEGO, May 19, 1998 -- Protein Polymer Technologies, Inc. (Nasdaq: PPTI) today announced during its annual meeting of stockholders that it has just completed a $5.4 million private placement of convertible preferred stock and warrants.  The Company had previously announced an initial closing of $3.9 million.
    The Company also announced the initial election of J. P. Jones, former head of medical product development at Proctor and Gamble, to its Board of Directors, and the reelection of seven current members of the Company's Board of Directors.  In other business, stockholders approved an amendment to the Company's 1992 Stock Option Plan and ratified Ernst & Young, LLP, as the Company's independent public accountants for the 1998 fiscal year.
    Newly elected to the Board of Directors was J. Paul Jones, Ph.D., Vice President, Research & Product Development (retired), Procter & Gamble Company. Reelected Directors included: Patricia J. Cornell, Vice President and Director of Taurus Advisory Group, a registered investment adviser; Edward E. David, Ph.D., technology consultant and former U.S. Presidential Assistant for Science and Technology; Philip J. Davis, Senior Vice President, Donaldson Lufkin & Jenrette; Edward J. Hartnett, Company Group Chairman (retired), Johnson & Johnson Company; Brent R. Nicklas, Managing General Partner, Lexington Partners; J. Thomas Parmeter, Ph.D., President and Chief Executive Officer, Protein Polymer Technologies, Inc.; and George R. Walker, Vice President- Finance (retired), Esso Europe.  All Directors are elected to annual terms.
    During the meeting, stockholders approved an amendment to the Company's 1992 Stock Option Plan (the "1992 Plan") which increases the shares reserved for issuances by 500,000 from 1,000,000 to 1,500,000 shares.  The purpose of the 1992 Plan is to attract, and provide incentives to key employees, directors and consultants.
    As previously reported, PPTI's private placement of Series E Convertible Preferred Stock was priced at $100 per share, and 54,000 shares were sold. Each share can be converted at any time by the holder into common stock at a price of $1.25 per share.  Each share of Preferred Stock also receives two common stock warrants.  Such securities may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC), or through an exemption from such registration.  The Company has agreed to use its best efforts to register the underlying common stock with the SEC within 120 days following closing.
    Protein Polymer Technologies, Inc., a San Diego-based biotechnology company, has developed a protein-based technology platform that allows the creation of new biomaterials that target multiple applications in biomedical markets.  The biocompatible polymers developed by PPTI have been genetically engineered to enable cell growth, promote the regeneration of tissue, bond to synthetic surfaces and resorb into tissue at controlled rates.  Targeted applications include tissue adhesives and sealants, soft tissue augmentation, tissue engineering and wound healing, and drug delivery vehicles.
    This press release may contain forward-looking statements that are based on management's expectations.  Actual results could differ materially from those expressed here; further, the Company is not obligated to comment specifically on those differences.  Risks associated with the Company's activities include raising adequate capital to continue operations, scientific and product development uncertainties, competitive products and approaches, attaining collaborative partnership interest and funding, regulatory testing and approvals, and manufacturing scale-up.  The reader is encouraged to refer to the Company's 1997 Annual Report and 10-KSB, and recent filings with the Securities and Exchange Commission, copies of which are available from the Company, to further ascertain the risks associated with the above statements.