SAN DIEGO, Feb. 24 /PRNewswire/ -- Houghten Pharmaceuticals, Inc. (HPI)
(Nasdaq: HPIP) today reported financial results for the year ended
December 31, 1996.  Total revenues for the year increased significantly to
$8.3 million from $1.4 million for 1995.  The net loss for 1996 was $11.7
million, or $0.95 per share, compared with a net loss of $9.5 million, or
$1.00 per share, reported for the year ended December 31, 1995.  Excluding the
one-time costs associated with the acquisition of ChromaXome Corporation
(CXC), the net loss for the year was $9.1 million, or $0.74 per share.  HPI
ended the year with $27.4 million in cash, cash equivalents, and short-term
investments.
    Annual revenue growth resulted primarily from the one-time receipt of
Magainin Pharmaceuticals' common stock in exchange for HPI's royalty interest
in Magainin's lead compound and the increased shipment of combinatorial
libraries to collaborators.  The increase in expenses resulted principally
from the expansion of HPI's chemistry effort, one-time costs associated with
the acquisition of CXC, and increased administrative costs due to being a
publicly traded company.
    "During the year we expanded our in-house combinatorial chemistry program
and initiated an advanced-generation robotics program.  We also broadened our
molecular diversity capabilities through the acquisition of CXC, adding a
dedicated scientific team and a unique technology to apply to the discovery of
novel small-molecule compounds, further differentiating our technology from
our competitors'," stated Robert S. Whitehead, HPI's president and chief
executive officer.
    Mr. Whitehead continued, "As importantly, we made advances in the
development of HP 228, our compound for the treatment of obese, type II
diabetics.  A preliminary dose tolerance study, completed during the year,
showed no significant safety concerns in this patient population, encouraging
us to move forward with additional trials.  Recently, our belief that HP 228
works by influencing certain molecules called melanocortin receptors (MCr) was
supported by independent research findings linking MC-4r and obesity.  HPI
scientists, working in this area since 1993, have discovered numerous
compounds of this type and we are the first company to advance a compound of
this kind into clinical testing."
    For the fourth quarter 1996, total revenues increased to $1.2 million from
$0.3 million in the same period for 1995.  The net loss for the quarter was
$5.8 million, or $0.43 per share, compared with $3.2 million, or $0.33 per
share, in the prior period for 1995.  Excluding one-time costs associated with
acquiring CXC, the net loss for the quarter was $4.5 million, or $0.34 per
share.
    HPI is a drug discovery company which utilizes combinatorial chemistry and
combinatorial biology technologies to create novel small-molecule drug
candidates.  The company leverages its technology platform by entering into
pharmaceutical alliances, enabling partners to access HPI's technologies in
exchange for licensing fees, potential milestone payments and royalties, or by
establishing joint-discovery alliances with biotechnology companies.  HPI also
uses its drug discovery technologies in its internal development programs.
HP 228, the company's lead compound, is in Phase II trials for the treatment
of inflammatory and metabolic diseases.
    Except for the historical information contained herein, the matters
discussed in the news release are forward-looking statements that involve
risks and uncertainties, including (i) whether any proposed product can be
successfully formulated, scaled-up, developed and commercialized, (ii) whether
combinatorial libraries of the company, CXC's technology, or HPI's robotics
program can be successfully developed or will have utility or value to
potential partners or internally, (iii) whether regulatory approvals can be
obtained, (iv) the impact of competitive products and pricing, (v) whether any
collaborations, alliances, or licensing agreements will be successful, and
(vi) other risks detailed from time to time in HPI's Securities and Exchange
Commission (SEC) filings.  These forward-looking statements represent HPI's
judgment as of the date of this release.  Actual results may differ materially
from those predicted.  HPI disclaims, however, any intent or obligation to
update these forward-looking statements.

                        Houghten Pharmaceuticals, Inc.
                Condensed Consolidated Statement of Operations
                                 (unaudited)
                    (in thousands, except per share data)

                             Three Months Ended         For The Year Ended
                                December 31,                December 31,
                             1996          1995         1996          1995

    Revenues:
     Net sales           $1,233         $337       $4,888       $1,370
     License fees                                   3,369
    Total revenues        1,233          337        8,257        1,370

    Operating expenses:
     Cost of sales          597          393        2,025        1,313
     Research and
      development         3,371        2,202       11,781        7,289
     In process research
      and development     1,282          ---        2,585          ---
     Selling, general and
      administrative      1,536          936        4,191        2,722

    Total operating
     expenses             6,786        3,531       20,582       11,324
    Loss from operations(5,553)      (3,194)     (12,325)      (9,954)
    Interest and other
     income/(expense), net(211)            2          637          464
    Net loss           $(5,764)     $(3,192)    $(11,688)     $(9,490)
    Net loss per share  $(0.43)      $(0.33)      $(0.95)       (1.00)
    Weighted average common
     and common equivalent
     shares              13,366        9,668       12,340        9,647

                        Houghten Pharmaceuticals, Inc.
                     Condensed Consolidated Balance Sheet
                                (in thousands)

                                         December 31,           December 31,
                                            1996                    1995
                                         (unaudited)
    ASSETS
    Current assets:
    Cash, cash equivalents and
     short term investments            $27,443                 $1,161
    Accounts receivable                    481                    241
    Other current assets                   282                    132
     Total current assets               28,206                  1,534

    Property and equipment, net          1,745                    935
    Other assets                           562                    277
                                       $30,513                 $2,746

    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
    Current liabilities:
     Accounts payable                     $810                   $216
     Accrued liabilities                 2,720                  1,298
     Current portion of capital
       lease obligations                   433                    361
     Deferred revenue                    1,761                  2,004
      Total current liabilities          5,724                  3,879

     Obligations under capital leases      633                    470
    Redeemable preferred stock             ---                  2,772
                                         6,357                  7,121

Stockholders' equity (deficit):
     Convertible preferred stock           ---                     16
     Common stock                           14                    ---
     Additional paid-in capital         72,330                 30,367
     Deferred compensation, net        (1,931)                  (236)
     Accumulated deficit              (46,257)               (34,522)
      Total stockholders' equity (deficit)24,156              (4,375)
                                       $30,513                 $2,746

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