Protein Polymer Announces Extension of Current R&D Agreement With Ethicon

    SAN DIEGO, Aug. 15 -- Protein Polymer Technologies, Inc.(Nasdaq: PPTI), today announced that the initial R&D phase of its collaboration with Ethicon, Inc., a subsidiary of Johnson & Johnson, has been extended by mutual agreement until the end of 1996.  The collaboration is focused on jointly developing and commercializing surgical tissue adhesives and sealants for wound closure and related surgical applications.  Products targeted for development are based upon proprietary protein polymers specifically designed and genetically engineered by PPTI to meet the performance and biocompatibility standards required of surgical wound closure and sealant products.
    In the extended agreement, Ethicon will provide PPTI an additional $400,000 for R&D expenses.  PPTI must successfully complete the initial R&D phase for the Agreement to continue beyond year end.  If successful, Ethicon will continue to contribute to ongoing R&D costs during product development as well as make payments to PPTI for the achievement of certain regulatory and product development milestones.  If all of the milestones including final FDA approval are achieved for both tissue adhesive and sealants products, PPTI estimates it will receive approximately $10 million in license fees, R&D and milestone payments prior to product commercialization.  PPTI has an option to manufacture the protein components and some or all of the final products, and Ethicon has worldwide product marketing rights.     In addition, Johnson Johnson Development Corporation (JJDC), also a subsidiary of Johnson & Johnson, will invest an additional $375,000 in PPTI through the exercise of certain warrants for PPTI common stock that it received as part of PPTI's Series D preferred stock transaction.
    "We look forward to continuing our collaboration with Ethicon.  Surgeons have long sought safe and effective adhesive and sealant products as alternatives to traditional sutures and staples.  PPTI and Ethicon bring together complementary strengths that optimize the chances of technical and commercial success in developing and marketing these unique surgical sealants and adhesives," said J. Thomas Parmeter, President and Chief Executive Officer of Protein Polymer Technologies, Inc.
    Protein polymers are synthetic proteins created "from scratch" through chemical DNA (gene) synthesis, and produced in quantity by bacteria through large scale fermentation.  By design, they combine the biological functionality and biocompatibility of natural proteins (e.g., silk, collagen, elastin, fibrin) with the chemical functionality and exceptional physical properties of synthetic polymers (e.g., nylon, spandex, polyester, polyacrylamide).  Because of their modular polymeric design, protein polymer components can be assembled and reassembled into a wide variety of different materials (such as films, fibers and gels), while also incorporating both chemical and biological functionality as part of the final protein design. PPTI holds several pioneering patents on the design and production of protein polymers, and has numerous U.S. and international applications covering the technology and specific products and product classes.
    Protein Polymer Technologies, Inc. is a development stage biomaterials company focused on tissue repair and drug delivery.  In addition to surgical adhesives and sealants, products being developed include bioactive coatings, surgical adhesion barriers, tissue augmentation materials, and drug delivery devices.  PPTI also markets a line of protein polymer-activated cell culture products under the trade names of ProNectin(R) and SmartPlastic(R).