Adolor Corporation Reports Third Quarter 2005 Financial Results

EXTON, Pa., Oct. 28 /PRNewswire-FirstCall/ -- Adolor Corporation today reported financial results for the three and nine months ended September 30, 2005.

For the three months ended September 30, 2005, the Company reported a net loss of $15.2 million or $0.39 per basic and diluted share, compared to a net loss of $8.7 million or $0.22 per basic and diluted share in the three months ended September 30, 2004. For the nine month period ended September 30, 2005, the Company reported a net loss of $41.0 million or $1.05 per basic and diluted share, compared to a net loss of $32.0 million or $0.82 per basic and diluted share for the same period in 2004.

"We made substantial progress this quarter toward the continued development of our lead product, Entereg(R) (alvimopan)," said David Madden, Interim President and CEO of Adolor. "Important developments included the FDA's confirmation that the design of the ongoing Study 314 represented an adequate and well controlled study, the results of which could potentially provide the additional proof of efficacy requested by the FDA. In addition, GlaxoSmithKline (Glaxo) initiated an international Phase 3 clinical program to evaluate alvimopan for the treatment of opioid-induced bowel dysfunction (OBD) in chronic pain patients."

Contract revenues were approximately $4.7 million and $13.8 million for the three months ended September 30, 2005 and 2004, respectively, and were approximately $11.5 million and $21.1 million for the nine months ended September 30, 2005 and 2004, respectively. Revenues decreased in 2005 as compared to 2004 due to the recognition in the third quarter of 2004 of $10.0 million in milestone revenue under our Collaboration Agreement with Glaxo, relating to the FDA's acceptance of our NDA, as well as decreased cost reimbursement revenues recognized in 2005 under this Collaboration Agreement. These decreases were partially offset by revenue recognized in 2005 under our Co-Promotion Agreement with Glaxo relating to Arixtra(R).

Research and development expenses were approximately $14.5 million and $16.7 million for the three months ended September 30, 2005 and 2004, respectively, and were approximately $35.3 million and $38.1 million for the nine months ended September 30, 2005 and 2004, respectively. Expenses decreased due principally to the recognition in the third quarter of 2004 of $4.5 million in license fee expense relating to Entereg(R). These decreases were partially offset by an increase in expenses relating to Study 314, increased expense for reimbursements owed Glaxo for expenses incurred in the OBD program, and increased expenses associated with our sterile lidocaine patch program and delta program.

Marketing, general and administrative expenses were approximately $6.3 million and $6.4 million for the three months ended September 30, 2005 and 2004, respectively, and were approximately $19.6 million and $16.9 million for the nine months ended September 30, 2005 and 2004, respectively. Expense increases in 2005 are principally related to increased personnel expenses, including expenses associated with our sales force, partially offset by decreased legal fees.

As of September 30, 2005, the Company had approximately $118.8 million in cash, cash equivalents and short-term investments.

About Adolor Corporation

Adolor Corporation is a biopharmaceutical company specializing in the discovery, development and commercialization of novel prescription pain management products. Entereg(R) (alvimopan) is Adolor's lead product candidate under development for the management of the gastrointestinal side effects associated with opioid use. Adolor and GlaxoSmithKline are collaborating in the worldwide development and commercialization of Entereg(R) in multiple indications. Adolor is developing a sterile lidocaine patch which is in Phase 2 clinical development for post-incisional pain. Adolor also has a number of discovery research programs focused on the identification of novel compounds for the treatment of pain. By applying its knowledge and expertise in pain management, along with ingenuity, Adolor Corporation is seeking to make a positive difference for patients, caregivers and the medical community. For more information, visit http://www.adolor.com.

This release, and oral statements made with respect to information contained in this release, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward- looking statements include those which express plan, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These statements are based upon management's current expectations and are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. Such known risks and uncertainties relate to, among other factors: the risk that Adolor may not obtain FDA approval for the new drug application (NDA) for Entereg(R) in postoperative ileus (POI), whether due to the risk that: Adolor is not able to provide additional data satisfactory to the FDA to obtain approval for the NDA; the results of Study 314 are not positive; Adolor is not able to justify that the median reduction in time to gastrointestinal (GI) recovery seen in bowel resection patients treated with Entereg(R) is clinically meaningful; the adequacy of the results of the Studies 14CL302, 14CL306, 14CL308 and 14CL313 to support FDA approval of Entereg(R), the results from other clinical trials of Entereg(R), including the GlaxoSmithKline Phase 3 Study 001, the adequacy of the development program, the conduct of the clinical trials, changing regulatory requirements, different methods of evaluating and interpreting data, reliance on third party manufacturers, adverse safety findings or otherwise; the risk that the FDA may not agree with Adolor's analyses of Studies 14CL302, 14CL306, 14CL308 and 14CL313 and may evaluate the results of these studies by different methods or conclude that the results from the studies are not statistically significant, clinically meaningful or do not support safety or that there were human errors in the conduct of the studies or otherwise; the risk that further studies of Entereg(R) in OBD are not positive; the risk that the results of Study 001 do not support a submission of a marketing approval application for alvimopan in Europe; the costs, delays and uncertainties inherent in scientific research, drug development, clinical trials and the regulatory approval process; Adolor's history of operating losses since inception and its need for additional funds to operate its business; Adolor's reliance on its collaborators, including GlaxoSmithKline in connection with the development and commercialization of Entereg(R); market acceptance of Adolor's products, if regulatory approval is achieved; competition; and securities litigation.

Further information about these and other relevant risks and uncertainties may be found in Adolor's Reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Adolor urges you to carefully review and consider the disclosures found in its filings which are available in the SEC EDGAR database at http://www.sec.gov and from Adolor at http://www.adolor.com. Given the uncertainties affecting pharmaceutical companies in the development stage, you are cautioned not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, unknown risks, uncertainties or other factors. Adolor undertakes no obligation to (and expressly disclaims any such obligation to) publicly update or revise the statements made herein or the risk factors that may relate thereto whether as a result of new information, future events, or otherwise.

ADOLOR CORPORATION STATEMENTS OF OPERATIONS DATA (Unaudited) FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, 2005 2004 2005 2004 REVENUES Contract revenues $4,738,414 $13,783,512 $11,462,372 $21,136,081 OPERATING EXPENSES Research and development 14,526,331 16,679,343 35,349,464 38,099,651 Marketing, general and administrative 6,282,488 6,424,987 19,567,944 16,858,797 Total operating expenses 20,808,819 23,104,330 54,917,408 54,958,448 Loss from operations (16,070,405) (9,320,818) (43,455,036) (33,822,367) Interest income and other, net 860,147 612,060 2,501,281 1,820,155 Net loss ($15,210,258) ($8,708,758) ($40,953,755) ($32,002,212) Basic and diluted net loss per share ($0.39) ($0.22) ($1.05) ($0.82) Shares used in computing basic and diluted net loss per share 39,087,516 38,996,874 39,086,858 38,872,108 BALANCE SHEET DATA (Unaudited) SEPTEMBER 30, DECEMBER 31, 2005 2004 Cash, cash equivalents and short-term investments $118,835,417 $162,323,525 Working capital 105,841,847 149,081,261 Total assets 133,203,291 178,103,385 Total stockholders' equity 82,288,923 123,159,917

CONTACT: Michael R. Dougherty, Senior Vice President, COO and CFO ofAdolor Corporation, +1-484-595-1500; or media, Mike Beyer of Sam Brown,Inc. for Adolor Corporation, +1-773-463-4211, or investors, Lilian Stern ofStern Investor Relations for Adolor Corporation, +1-212-362-1200

Web site: http://www.adolor.com/