NEWTOWN, Pa., July 21 /PRNewswire/ -- CollaGenex Pharmaceuticals, Inc.
(Nasdaq: CGPI), announced a net loss of $2.1 million, or $0.24 per share, for
the second quarter of 1997 compared to a net loss of $1.8 million, or
$0.31 per share, for the second quarter of 1996.  For the six months ended
June 30, 1997, the Company reported a net loss of $3.5 million, or $0.44 per
share, compared to a net loss of $3.1 million, or $0.56 per share, for the
corresponding period in 1996.
    The 1997 results included revenues of $300,000 in licensing fees from
Boehringer Mannheim Italia, pursuant to the Company's license agreement
executed in July 1996.  There were no revenues during the comparable 1996
periods.  The lower net losses per share recorded during the three and six
months ended June 30, 1997 were due primarily to a greater weighted average
number of shares outstanding subsequent to the Company's initial public
offering of 2,000,000 shares of common stock in June 1996 and its follow-on
offering of 1,000,000 shares of common stock in April 1997.
    Total operating expenses were $2.8 million for the second quarter of 1997
compared to $1.8 million for the corresponding quarter in 1996.  For the six
months ended June 30, 1997, total operating expenses were $4.4 million
compared to $3.2 million for the first half of 1996.  The increase in
operating expenses was due primarily to higher general and administrative
expenses related to the development of a commercial infrastructure, the
initiation of certain prelaunch sales and marketing activities and expenses
associated with becoming a public company.
    Cash and short-term investments at June 30, 1997 were $27.3 million
compared to $18.2 million at December 31, 1996.  This increase was mainly a
result of the 1,000,000 share follow-on common stock offering completed on
April 8, 1997, which generated net proceeds to the Company of $11.6 million,
less the normal operating expenses incurred during the six month period.
    CollaGenex Pharmaceuticals, Inc. is engaged in the development and
commercialization of innovative proprietary medical therapies for the
treatment of periodontal disease and other dental pathologies.  The Company's
lead drug, Periostat(R), completed three pivotal Phase III clinical trials
demonstrating statistically significant improvements in a number of clinically
important endpoints for treatments of periodontal disease.  A new drug
application for Periostat was filed with the FDA in August 1996.  The
Company's core technology involves inhibiting the activity of certain enzymes
that destroy the connective tissues of the body.  In addition to periodontal
disease, the Company and its collaborators are researching and developing
other potential applications of the core technology, including cancer
metastasis, wound healing, osteoarthritis, osteoporosis, rheumatoid arthritis
and diabetic nephropathy.
    To receive additional information on CollaGenex Pharmaceuticals, Inc., via
fax, at no charge, dial 1-800-PRO-INFO and enter code CGPI, or visit the
Company's website at http://www.collagenex.com.
    This news release contains forward-looking statements and therefore it
necessarily involves risks and uncertainties.  Factors that could cause actual
events to differ from these forward-looking statements are set forth under the
caption "Risk Factors" in the company's prospectus dated June 20, 1996, which
is part of its registration statement on file with the Securities and Exchange
Commission.  There can be no assurance that the company will receive
regulatory approval to market any product or, if such approval is received,
that the product will be commercially successful.

                       CollaGenex Pharmaceuticals, Inc.
                            Summary Financial Data

                                 Three Months Ended     Six Months Ended
                                      June 30,               June 30,
                                 1997         1996      1997         1996
                                   (in thousands, except share amounts)

    Statement of Operations Data: (Unaudited)
    Revenues:
    Licensing Fees                $300        $--        $300          $--
    Operating expenses:
      Research and
      Development                1,379      1,301       2,075        2,277
      General and
      Administrative             1,385        535       2,350          953
      Total operating
      expenses                   2,764      1,836       4,425        3,230
    Other income (expense)
      Interest income              382         48         618          109
      Other expense                 --         --          --           --
    Net Loss                   $(2,082)   $(1,788)    $(3,507)     $(3,121)

    Accretion of undeclared
    dividends                      $--        $336        $--         $720
    Net loss allocable to common
    stockholders               $(2,082)    $(2,124)   $(3,507)     $(3,841)

    Proforma net loss
    per share                   $(0.24)     $(0.31)    $(0.44)      $(0.56)

    Shares used in computing
    proforma net loss
    per share                8,521,601   5,734,061  8,030,087    5,623,333


    Balance Sheet Data:             June 30, 1997     December 31, 1996
                                             (Unaudited)
    Cash and cash equivalents          $27,276            $18,215
    Total assets                       $27,646            $18,437
    Total stockholders'equity          $25,744            $17,592

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