Alteon Announces Year-End and Fourth Quarter Results

Alteon Announces Year-End and Fourth Quarter Results 


PARSIPPANY, N.J., March 15  /PRNewswire-FirstCall/ -- Alteon Inc. (AMEX: ALT)
announced today a net loss of $13,958,646 for the year ended December 31, 2004.
 This compared to a net loss of $14,452,418 for the same period in 2003. The
net loss applicable to common stockholders, which included a non-cash charge
for a preferred stock dividend, was $18,093,791, or $0.41 per basic/diluted
share, for the year ended December 31, 2004, as compared to $18,243,265, or
$0.50 per basic/diluted share, for the same period in 2003. Research and
development expenses increased to $10,147,298 for the year ended December 31,
2004, from $9,929,704 for the same period in 2003, primarily due to increased
clinical study costs and manufacturing expenses related to SPECTRA, offset by
lower facility costs.  General and administrative expenses decreased to
$4,531,953 for the year ended December 31, 2004, from $5,046,357 for the same
period in 2003.

The decrease included reduced facility expenses in 2004 associated with the
Company's relocation to Parsippany and higher patent expenses in 2003.

For the three months ended December 31, 2004, Alteon had a net loss of
$3,711,756, which compared to a net loss of $2,460,622 for the same period in
2003.  The net loss applicable to common stockholders, which included a non-
cash charge for a preferred stock dividend, was $4,784,171, or $0.10 per
basic/diluted share, as compared to $3,446,300, or $0.09 per basic/diluted
share, for the same period in 2003.  This increase in net loss applicable to
common stockholders in the three months ended December 31, 2004 is related to
SPECTRA, as compared to lower clinical study expense for the three months ended
December 31, 2003, due to the completion of the Phase 2b SAPPHIRE/SILVER trial
in July 2003.

Investment income increased in the year ended December 31, 2004, due to an
increase in short-term interest rates, partially offset by lower investment
balances.  In 2004, other income included $51,821 derived from the sale of
fully depreciated laboratory equipment and supplies and a reimbursement of
$100,000 for improvements made to our former Ramsey facility.  Cash and cash
equivalents at December 31, 2004 totaled $11,175,762.

In January 2005, Alteon completed a public offering of 9,523,813 shares of
common stock at $1.05 per share, which provided net proceeds of approximately
$9,545,000.  In connection with this offering, Alteon issued a five-year
warrant to its placement agent to purchase 312,381 shares of common stock at
$1.37 per share.

As noted in Item 9A of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2004, as filed today with the Securities and Exchange
Commission, J.H. Cohn LLP, Alteon's independent registered public accounting
firm, has noted that, based on its preliminary review of the Company's internal
controls as required by Section 404 of the Sarbanes-Oxley Act, Alteon has
certain weaknesses, which, in J.H. Cohn's opinion, have the potential to be
deemed to be material weaknesses in its internal controls relating to
information technology controls and process controls with respect to processing
of outgoing checks.  Alteon is working with J.H. Cohn to be able to determine
definitively the classification of these control deficiencies. Alteon intends
to file its management's report on internal controls and J.H. Cohn's related
attestation report as part of an amendment to its Annual Report on Form 10-K no
later than May 2, 2005.  Alteon will include its conclusions with respect to
the issues referred to above in the Form 10-K amendment.

About Alteon

Alteon is developing several new classes of drugs that have shown the potential
to reverse or slow down diseases of aging and complications of diabetes.  These
compounds appear to have an impact on a fundamental pathological process caused
by the progressive formation of protein-glucose complexes called Advanced
Glycation End-products (A.G.E.s).  The formation and crosslinking of A.G.E.s
lead to a loss of flexibility and function in body tissues and organs and have
been shown to be a causative factor in many age- related diseases and diabetic
complications.  Alteon has created a library of novel classes of compounds
targeting the A.G.E. pathway.

Alteon's lead compound alagebrium chloride (formerly ALT-711), the only A.G.E.
Crosslink Breaker in advanced human testing, has demonstrated safety and
efficacy in several Phase 2 trials and is being developed for systolic
hypertension, heart failure and erectile dysfunction.  Approximately 1,300
patients have been involved in alagebrium's human clinical trials to date, of
whom approximately 1,000 have received active compound.  Clinical studies of
alagebrium include the Phase 2b systolic hypertension trial, SPECTRA (Systolic
Pressure Efficacy and Safety Trial of Alagebrium), the Phase 2a heart failure
study, PEDESTAL (Patients with Impaired Ejection Fraction and Diastolic
Dysfunction: Efficacy and Safety Trial of ALagebrium), the Phase 2a EMERALD
study (Evaluation of Alagebrium in Erectile Dysfunction in Diabetic Males on
PDE5 Inhibitors), as well as a fourth study exploring mechanism of action in
endothelial dysfunction.

In February 2005, Alteon voluntarily and temporarily suspended enrollment of
new patients into the Company's ongoing alagebrium clinical studies pending
receipt of additional pre-clinical data, which are expected by mid-year 2005.
The Company expects that decisions regarding resumption of enrollment will be
made at that time.

For more detailed information about alagebrium, please visit the scientific
publications section of the Alteon website, http://www.alteon.com/.

Any statements contained in this press release that relate to future plans,
events or performance are forward-looking statements that involve risks and
uncertainties including, but not limited to, those relating to technology and
product development (including the possibility that early clinical trial
results may not be predictive of results that will be obtained in large-scale
testing or that any clinical trials will not demonstrate sufficient safety and
efficacy to obtain requisite approvals or will not result in marketable
products), regulatory approval processes, intellectual property rights and
litigation, competitive products, ability to obtain financing, and other risks
identified in Alteon's filings with the Securities and Exchange Commission. The
information contained in this press release is accurate as of the date
indicated.  Actual results, events or performance may differ materially. Alteon
undertakes no obligation to publicly release the result of any revision to
these forward-looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

                               Alteon Inc.
                         Statements of Operations
                               (Unaudited)

                                Year Ended          Three Months Ended
                                December 31,             December 31,
                            2004         2003          2004         2003
  Income:
    Investment income     $182,574     $179,006      $60,959      $39,484
    Other income           151,821          ---          ---          ---
      Total income         334,395      179,006       60,959       39,484

  Expenses:
    Research and
     development
     (which includes
     non-cash variable
     stock compensation
     expense/(benefit)
     for the years ended
     December 31, 2004
     and 2003, of $0 and
     $20,019,
     respectively)      10,147,298    9,929,704    2,885,721    1,599,584
    General and
     administrative
     (which includes
     non-cash variable
     stock compensation
     expense/(benefit)
     for the years ended
     December 31, 2004
     and 2003, of $0
     and $0,
     respectively)      4,531,953     5,046,357    1,273,204    1,245,159
      Total expenses   14,679,251    14,976,061    4,158,925    2,844,743

  Loss before income
   tax benefit        (14,344,856)  (14,797,055)  (4,097,966)  (2,805,259)

    Income tax benefit    386,210       344,637      386,210      344,637

  Net loss            (13,958,646)  (14,452,418)  (3,711,756)  (2,460,622)
    Preferred stock
      dividends         4,135,145     3,790,847    1,072,415      985,678

  Net loss applicable
   to common
   stockholders      $(18,093,791) $(18,243,265) $(4,784,171) $(3,446,300)

  Basic/diluted net
   loss per share
   applicable to
   common
   stockholders            $(0.41)       $(0.50)      $(0.10)      $(0.09)

  Weighted average
   common shares used in
   computing basic/diluted
   net loss per share
   applicable to common
   stockholders        44,349,015    36,189,655   48,472,898   39,203,773


                       Selected Balance Sheet Data
                               (Unaudited)

                                            December 31,    December 31,
                                                2004           2003

  Cash and cash equivalents                 $ 11,175,762   $ 16,678,582

  Total assets                                11,642,395     17,254,985

  Accumulated deficit                       (205,712,650)  (187,618,859)

  Total stockholders' equity                   9,046,920     15,384,432


DATASOURCE: Alteon Inc.



CONTACT:  Susan M. Pietropaolo, Director, Corporate Communications &

Investor Relations of Alteon Inc., [phone], 



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

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