COLLAGENEX REPORTS FIRST QTR TOTAL REVENUES INCREASE 13%.

CollaGenex Pharmaceuticals, Inc. (Nasdaq: CGPI), Newton. Pa., has reported financial results for the first quarter ended March 31, 2003. Total revenues increased 13% to $12.2 million compared to $10.8 million in the first quarter of 2002. Net product sales were $11.4 million in the first quarter of 2003, a 15% increase over net product sales of $9.9 million recorded in the first quarter of 2002.

During the first quarter of 2003, net income was $1.2 million compared to a net loss of $600,000 during the first quarter of 2002. Net income allocable to common stockholders for the first quarter of 2003 was $828,000, or $0.07 per basic and diluted share, compared to a net loss of $1.0 million, or $0.09 per basic and diluted share, in the first quarter of 2002. The net income earned in the first quarter of 2003 included a one-time, non-cash compensation charge of $251,000, or $0.02 per basic and diluted share, related to certain modifications of stock option agreements held by Brian M. Gallagher, PhD, the company's chairman, president and chief executive officer. CollaGenex announced in March 2003 that Dr. Gallagher, who has been chief executive officer and president of CollaGenex for nine years, will be leaving the company to pursue other interests but has agreed to remain in his present position until a new chief executive is appointed. Dr. Gallagher will also remain as a consultant to the company for a period of two years after his departure.

"The first quarter of 2003 marked our third consecutive quarter of increased profitability and indicates the continued market penetration by our sales force and increased acceptance of our dental and dermatology products," stated Dr. Gallagher. "We look forward to further organic growth going forward, as well as the addition of revenues from new products, including the three exciting new products added to our dermatology product line through our co-promotion agreement with Sirius Laboratories. We are also pleased to have received marketing approval for Periostat in Switzerland and Canada, bringing the number of approved countries to seven. Additionally, we made significant progress in our R&D development program, advancing new products and investigating additional potential indications for Periostat. We are executing our stated goals and investing in the future of CollaGenex while posting increases in revenues and profitability."

"During the first quarter of 2003, we increased our net product sales by 15%, or $1.5 million, compared to a year ago while reducing our SG&A expense (before stock compensation charge) by 13%, or about $1.2 million, over the same period," added Nancy C. Broadbent, chief financial officer of CollaGenex. "Most of these SG&A expense reductions were achieved by the planned redirection of our marketing efforts from consumer advertising to direct professional promotion, based on exciting recent findings from Phase IV clinical studies of Periostat. We also invested in our pipeline by increasing our R&D spending by about $200,000, or more than 23%, primarily to fund our clinical trials of Periostat in dermatology, our once-a-day, sustained release formulation of Periostat and the development of products based on our Restoraderm platform technology."

During the first quarter of 2003, CollaGenex announced a number of additional important achievements related to marketed products and those in clinical development.

-- The company entered into a joint marketing agreement with Sirius Laboratories, under which CollaGenex will promote Sirius' AVAR product line: AVAR Gel, AVAR Green and AVAR Cleanser. These unique, proprietary prescription formulations are indicated for the topical control of acne vulgaris, rosacea and seborrheic dermatitis. Sirius will promote CollaGenex' product, Pandel(R) (hydrocortisone probutate cream, 0.1%), to U.S. dermatologists. The principal goal of the agreement is to leverage the companies' combined sales and marketing infrastructures, and to improve both companies' abilities to reach key dermatologists and increase frequency of contact.

-- CollaGenex announced the initiation of a double-blinded, placebo-controlled Phase IV clinical study to evaluate the combined efficacy of Periostat(R), which is a systemically absorbed medication, and Atridox(R) (doxycycline hyclate) 10%, a locally applied antimicrobial gel, in the treatment of adult periodontitis. In addition to the evaluation of traditional clinical indices, a subset of patients will be tested for levels of the inflammatory marker, C-reactive protein (CRP), at baseline and during the course of the study, to establish the impact of periodontal pharmacotherapy on this key marker of cardiovascular risk.

-- The AIDS Malignancy Consortium completed enrollment of a multi-center, open-label Phase II study evaluating CollaGenex' Metastat in the treatment of HIV-related Kaposi's Sarcoma. Results from the study should be available in approximately 8 months, and will form the basis for continued development in an NDA-directed Phase III study.

-- Significant new data presented in four papers at the American Association for Dental Research annual meeting in March highlighted several potential new benefits and applications of Periostat beyond its utility in treating adult periodontitis. Two independent studies provided new insights into the adjunctive use of Periostat in the treatment of periodontitis patients with diabetes; a third paper described the use of Periostat to modulate wound healing in patients undergoing a form of periodontal surgery called Access Flap Surgery; and a fourth abstract described the impact of Periostat on biomarkers of systemic inflammation, including C-reactive protein, in patients with acute coronary syndromes. A study conducted by researchers at Brigham and Women's Hospital and Harvard Medical School and published in the New England Journal of Medicine in November 2002 concluded that C-reactive protein level is a stronger predictor of cardiovascular events than LDL cholesterol level.

During the first quarter of 2003, CollaGenex also strengthened its intellectual property position with the issuance by the United States Patent and Trademark Office of a new patent for the first of its next-generation IMPACS compounds, a completely new chemical compound. Patents for numerous other IMPACS compounds are currently pending; the company intends to continue to fortify its patent position going forward.

CollaGenex Pharmaceuticals, Inc. is a specialty pharmaceutical company currently focused on providing innovative medical therapies to the dental and dermatology markets. Currently, the company's 115-person professional dental pharmaceutical sales force markets Periostat(R), which is indicated as an adjunct to scaling and root planing for the treatment of adult periodontitis. Periostat is the first and only pharmaceutical to treat periodontal disease by inhibiting the enzymes that destroy periodontal support tissues, and by enhancing bone protein synthesis.

The sales force also promotes Vioxx(R), a Merck & Co. drug that CollaGenex co-promotes for the treatment of acute dental pain; Denavir(R), a Novartis Group prescription anti-viral medication for the treatment of cold sores; Pandel(R), a prescription, topical corticosteroid licensed from Altana, Inc.; Sirius Laboratories' AVAR(TM) product line for the topical control of acne vulgaris, rosacea and seborrheic dermatitis; and Atridox(R), Atrisorb(R) FreeFlow(TM) and Atrisorb-D(R) FreeFlow(TM), Atrix Laboratories Inc.'s products for the treatment of adult periodontitis.

Research has shown that certain unique properties of the tetracyclines discovered during the development of Periostat may be applicable to other diseases involving inflammation and/or destruction of the body's connective tissues, including acne, rosacea, meibomianitis and cancer metastasis, among others.

CollaGenex is further evaluating Periostat, as well as the new IMPACS(R) compounds, to assess whether they are safe and effective in these applications. In addition, CollaGenex has licensed the Restoraderm(TM) technology, a unique, proprietary dermal drug delivery system, in order to develop a range of topical dermatological products with enhanced pharmacologic and cosmetic properties.

For more information, call 215/579-7388 or visit http://www.collagenex.com.