MEDICIS REPORTS 2ND QTR FISCAL 2004 NET REVENUES OF $70.6 MIL.

Medicis (NYSE:MRX), Scottsdale, Ariz., has announced second quarter fiscal 2004 net revenues of $70.6 million with "if- converted" net income of $16.0 million, or $0.25 per diluted share, absent a $1.6 million tax-effected special charge associated with a research and development collaboration, compared to second quarter fiscal 2003 net revenues of $59.5 million with net income of $15.3 million, or $0.27 per diluted share. Including the tax-effected special charge of $1.6 million, the company reported net income of $13.6 million, or $0.23 per diluted share for the second quarter of fiscal 2004. Second quarter fiscal 2004 diluted per share amounts are calculated using the "if-converted" method of accounting in accordance with Generally Accepted Accounting Principles ("GAAP") due to the outstanding 2.5% Convertible Senior Notes meeting the criteria for conversion, regardless of whether the bondholders actually convert their bonds into shares. Second quarter fiscal 2003 diluted per share amounts do not reflect the "if-converted" method, as the criteria for conversion had not been met.

Second quarter fiscal 2004 net revenues increased 19% primarily as a result of net overall growth in sales of the company's core brands. At the end of the second quarter, the company's core brands included RESTYLANE(R), DYNACIN(R), LOPROX(R), OMNICEF(R), ORAPRED(R), PLEXION(R) and TRIAZ(R). These core brands represented approximately 91% of total product sales, with no U.S. sales of RESTYLANE(R). The company's gross profit margin remained consistent at approximately 84%.

For the first six months of fiscal 2004, Medicis reported net revenues of $133.9 million with "if-converted" net income of $27.2 million, or $0.43 per diluted share, absent a $37.5 million tax-effected loss associated with the early extinguishment of debt reported in the first quarter of fiscal 2004, absent a $1.6 million tax-effected special charge associated with a research and development collaboration reported in second quarter fiscal 2004. Including the tax-effected special charges of $37.5 million and $1.6 million reported in the first half of fiscal 2004, Medicis reported a net loss of $13.5 million, or $(0.25) per diluted share for the first six months of fiscal 2004. Comparatively, in the first half of fiscal 2003, Medicis reported net revenues of $118.3 million with net income of $30.6 million, or $0.54 per diluted share, absent a $3.4 million tax-effected special charge reported in the first quarter of fiscal 2003 associated with a research and development collaboration. Including the tax-effected special charge of $3.4 million, Medicis reported net income of $27.2 million, or $0.48 per diluted share for the first six months of fiscal 2003. First half of fiscal 2004 diluted per share amounts are calculated using the "if-converted" method of accounting in accordance with GAAP. First half of fiscal 2003 diluted per share amounts do not reflect the "if-converted" method, as the criteria for conversion had not been met.

For the first six months of fiscal 2004, net revenue increased 13% primarily as a result of net overall growth in sales of the company's core brands. In the first half of fiscal 2004, the company's core brands represented approximately 88% of total product sales, with no U.S. sales of RESTYLANE(R). Additionally, the company's gross profit margin for the first half of fiscal 2004 was consistent at 84%. Selling, general and administrative expenses in second quarter fiscal 2004 increased approximately 30% to $29.1 million, as the company incurred incremental costs associated with the establishment of a sales and marketing strategy for RESTYLANE(R).

The company has incurred incremental costs associated with the hiring of a dedicated aesthetics sales force, additional headquarters personnel to support sales force efforts, including product management, customer service and training personnel, expenses associated with public relations, physician training and continuing medical education, and other administrative expenses. A Pre-Market Approval application for RESTYLANE(R) was approved by the Food and Drug Administration on December 12, 2003, followed by the product launch and first U.S. commercial sales of RESTYLANE(R) on January 6, 2004.

On January 2, 2004, the company announced a 2 for 1 stock split in the form of a stock dividend payable on January 23, 2004, to stockholders of record at the close of business on January 12, 2004.

"We are pleased to have completed a strong quarter, driven by sales growth in our core brands," said Jonah Shacknai, chairman and CEO. "As we had indicated in previous guidance, the first half of fiscal year 2004 was a period of significant investment in building the company's capacity to commercialize RESTYLANE(R). With the recent approval of this important addition to our core brand group, our product offerings to physicians are nicely diversified across therapeutic categories. We continue to focus on the growth of our other core brands, furtherance of our research and development program and corporate development opportunities."

Medicis previously released updated fiscal 2004 revenue guidance of approximately $291 million and earnings per share guidance of $1.08. The company is raising its previous fiscal 2004 revenue guidance by $1 million to approximately $292 million, and earnings per share guidance by $0.01 to $1.09, excluding special charges.

Medicis is the leading independent specialty pharmaceutical company in the United States focusing primarily on the treatment of dermatological, pediatric and podiatric conditions, and aesthetics medicine. Medicis has leading branded prescription products in a number of therapeutic categories, including acne, asthma, eczema, fungal infections, hyperpigmentation, photoaging, psoriasis, rosacea, seborrheic dermatitis and skin and skin-structure infections. The company's products have earned wide acceptance by both physicians and patients due to their clinical effectiveness, high quality and cosmetic elegance.

The company's products include the prescription brands RESTYLANE(R), DYNACIN(R) (minocycline HCl), LOPROX(R) (ciclopirox), LUSTRA(R) (hydroquinone), LUSTRA-AF(R) (hydroquinone) with sunscreen, ALUSTRA(R) (hydroquinone) with retinol, OMNICEF(R) (cefdinir), ORAPRED(R) (prednisolone sodium phosphate), PLEXION(R) Cleanser (sodium sulfacetamide/sulfur), PLEXION TS(R) (sodium sulfacetamide/sulfur), PLEXION SCT(R) (sodium sulfacetamide/sulfur), TRIAZ(R) (benzoyl peroxide), LIDEX(R) (fluocinonide), and SYNALAR(R) (fluocinolone acetonide), the over-the-counter brand ESOTERICA(R), and BUPHENYL(R) (sodium phenylbutyrate), a prescription product indicated in the treatment of Urea Cycle Disorder.

For more information, visit http://www.medicis.com or call 602/808-3854.