SAN DIEGO, Nov. 5 /PRNewswire-FirstCall/ -- Protein Polymer Technologies,
Inc. (OTC Bulletin Board: PPTI), reports today its financial results for the
third quarter and for the nine months ended September 30, 2002. For the
quarter, the Company had a net loss applicable to common shareholders of
$215,698 ($0.01 per share), and for the nine-month period, a loss of
$1,125,400 ($0.04 per share). Net losses for the comparable periods in 2001
were $752,178 ($0.03 per share) and $2,561,636 ($0.12 per share),
respectively. The net loss and the net loss per share amounts include
accumulated and distributed dividends related to the Company's preferred
stock.
    Contract and licensing revenue, and product and interest income totaled
$714,800 and $2,133,279, respectively, for the quarter and the nine month
period ended September 30, 2002, compared to $295,508 and $588,895,
respectively, for the same periods last year. The increase in contract and
licensing revenue is due primarily to research and development payments from
Spine Wave, Inc. for the development of a spinal disc repair product for the
treatment of lower back pain. Following Spine Wave's completion in the first
quarter of 2002 of an $18 million equity financing, The Company's contractual
research and development services for Spine Wave were expanded to include much
of the spinal product's pre-clinical development. Also included is the
amortized portion of an up-front license payment associated with the formation
of a partnership with Femcare Ltd., of Nottingham, England, to commercialize
the Company's product for the treatment of female stress urinary incontinence
in Europe and Australia. The $1 million Femcare license fee is being
recognized as income over a three-year period ending January 2003 at a rate of
approximately $83,333 per quarter.
    Operating expenses for the quarter and the nine months ended September 30,
2002 were $860,518 and $3,051,020, respectively, as compared to $977,706 and
$2,942,872, respectively, for the same periods in 2001. To the extent that
capital resources become available, expenses are expected to rise in
subsequent quarters due to the increased expenditures for expanded human
clinical testing and patient follow-up of the Company's injectable urethral
bulking agent for the treatment of female stress urinary incontinence, and of
the Company's injectable hydrogel for the treatment of dermal contour defects
(scars, wrinkles, and lines). In addition, as resources become available, we
plan on expanding our research and product development activities derived from
our cross-linked tissue adhesive technology platform. However, there can be no
assurance that additional resources will become available.
    The Company's cash balance as of September 30, 2002 was $666,067, as
compared to $234,271 as of December 31, 2001. In combination with anticipated
additional contract and license payments, and revenue projected for the
delivery of clinical testing materials, the Company's cash is expected to meet
its anticipated capital requirements through January 2003. The Company is
seeking to raise additional capital to support further product development and
continued clinical testing of its products for female incontinence and
cosmetic dermal corrections. If additional capital is not obtained in the near
future, the Company will be required to reduce the use of cash through layoffs
and other cost reduction steps.

    About Protein Polymer Technologies, Inc.
    Protein Polymer Technologies, Inc., is a tissue engineering company
focused on developing bioactive devices to improve medical and surgical
outcomes. From its inception in 1988, PPTI has been a pioneer in protein
design and synthesis, developing an extensive portfolio of proprietary
biomaterials. These genetically engineered biomaterials are high molecular
weight proteins, processed into products with physical and biological
characteristics tailored to specific clinical performance requirements.
Targeted products include urethral bulking agents for the treatment of stress
urinary incontinence, dermal augmentation products for cosmetic and
reconstructive surgery, surgical adhesives and sealants for repair of spinal
discs and other surgical applications, scaffolds for wound healing and tissue
engineering, and depots for local drug delivery.

    This press release contains forward-looking statements that are based on
management's views and 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 clinical product development uncertainties, competitive products and
approaches, continuing collaborative partnership interest and funding,
regulatory testing and approvals, and manufacturing scale-up. To further
ascertain the risks associated with the above statements, the reader is
encouraged to refer to the Company's 2001 Annual Report on Form 10-KSB, Forms
10QSB for periods ending March 31, 2002 and June 30, 2002 and other recent
filings with the Securities and Exchange Commission, copies of which are
available from the Company.


                      Protein Polymer Technologies, Inc.
                        Condensed Financial Statements
                                 (unaudited)

                              Three months ended         Nine months ended
                                  September 30,             September 30,
                               2002        2001         2002          2001
    SUMMARY OF OPERATIONS
    Contract revenue        $713,742    $283,333   $2,127,084      $550,000
    Interest income            1,058      12,175        4,695        38,857
    Product and other income      --          --        1,500            38
    Total revenues           714,800     295,508    2,133,279       588,895

    Total expenses           860,518     977,706    3,051,020     2,942,872

    Net loss               $(145,718)  $(682,198)   $(917,741)  $(2,353,977)

    Undeclared and/or paid
     dividends on Preferred
     Stock                    69,980      69,980      207,659       207,659

    Net loss applicable to
     common shareholders   $(215,698)  $(752,178) $(1,125,400)  $(2,561,636)

    Net loss per common share -
     basic and diluted        $(0.01)     $(0.03)      $(0.04)       $(0.12)

    Shares used in computing net loss
     per share - basic
     and diluted          29,713,871  21,735,420   26,964,186    20,749,940


                                         As of            As of
                                    Sept. 30, 2002  Dec. 31, 2001
    BALANCE SHEET INFORMATION
    Cash and cash equivalents           $666,067         $234,271
    Working capital                      232,055         (584,980)
    Total assets                         927,745          526,717
    Total capital invested            44,179,339       42,492,125
    Accumulated deficit             $(43,808,142)    $(42,890,401)

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