CPEX Pharmaceuticals reports record quarterly royalty revenues from Testim sales

May 5 2010

CPEX Pharmaceuticals, Inc. (NASDAQ: CPEX) today reported financial results for the first quarter ended March 31, 2010. For the quarter CPEX reported revenues of $5.3 million and a net loss of $940,000.

“During the first quarter of 2010, we experienced record quarterly royalty revenues from the sales of Testim”

First-Quarter Highlights

For the first quarter of 2010 compared to the first quarter of 2009:

• Revenues increased 33% to $5.3 million from $4.0 million.
• Operating expenses increased 39% to $6.3 million from $4.5 million.
• Net loss was $940,000, or $0.37 per share, compared to a net loss of $468,000, or $0.19 per share.

The growth in revenues for the first quarter of 2010 was due to increased royalties on sales of Testim^®. This growth is due to a reported 14.8% increase in prescriptions for Testim during the first quarter of 2010 compared to the same period in 2009.

General and administrative expenses for the first quarter of 2010 increased $769,000 compared to the first quarter of 2009. The increase was primarily related to increased advisory and consulting services compared to the same period of the prior year.

Research and development expenses increased $971,000 in the first quarter of 2010 compared to the first quarter of 2009 due to preclinical and clinical trials for Nasulin and other development programs, which were partially offset by a decrease in research employee expenses.

As of March 31, 2010, CPEX had unrestricted cash of approximately $13.3 million, working capital of $16.3 million and no debt.

Business Update

Agreement with Serenity Assigned to Allergan: CPEX recently announced that its partner, Serenity Pharmaceuticals ("Serenity"), entered into a global agreement with Allergan, Inc. ("Allergan") for the development and commercialization of Ser-120, a product candidate that utilizes CPEX's patented intranasal drug delivery technology. Ser-120 is currently in Phase 3 clinical trials for the treatment of nocturia. In connection with CPEX's agreement with Serenity, Allergan is assuming the exclusive license agreement between CPEX and Serenity which was entered into in February 2008. Under this agreement, CPEX granted Serenity an exclusive and sub-licensable license to use CPEX's CPE-215^® permeation technology for the development of Ser-120. In return, CPEX is entitled to sales milestones and low single digit royalties on worldwide net sales following any commercialization of Ser-120.

Management Comments

"During the first quarter of 2010, we experienced record quarterly royalty revenues from the sales of Testim," stated John A. Sedor, CPEX President and Chief Executive Officer. "In addition, we believe the recent global agreement between Serenity and Allergan for Ser-120 further validates our proprietary intranasal technology. In 2010 we look forward to capitalizing on this partnership with Allergan while identifying additional opportunities to out-license the CPE-215 technology and building our development pipeline."

SOURCE CPEX Pharmaceuticals, Inc.