STELLAR INTERNATIONAL REVENUES/GROSS PROFITS MORE THAN DOUBLE.

Stellar International Inc. (TSXV:YYS), a Canadian pharmaceutical developer and marketer of high-quality, cost- effective products for select health care markets, has reported sharp revenue and gross profit increases for the second quarter and first half periods ended June 30, 2002 (all amounts are in Canadian dollars).

2002 second quarter revenues rose over 125% to $257,383 from the $114,055 recorded for the 2001 second quarter. Gross profit rose to $204,27l, more than double the $81,207 gross profit for the 2001 second quarter. The net loss for the 2002 second quarter was $l20,421, or a net loss of $0.01 per share, compared to a net loss of $188,921, or a net loss of $0.01 per share, for the 2001 second quarter.

Revenues for the first half of 2002 increased to $435,396 from the $198,372 recorded for the first half of 2001. Similarly, first half gross profit more than doubled to $338,366 from the $145,847 gross profit recorded for the first half of 200l. The 2002 first half net loss amounted to $323,745, or a net loss of $0.02 per share, down about 4% from the $337,408, or a net loss of $0.02 per share, for the 200l first half.

The company noted that both of its product groups, NeoVisc and Uracyst-S, continue to demonstrate excellent growth. NeoVisc increased gross sales by 108% in the first half and Uracyst-S sales were up 265% over the same period in 2001.

Peter Riehl, Stellar's president and CEO, stated, "The losses we incurred were directly related to continuous spends in Research and Development and increased administrative costs related to the expansion of field representation and the support infrastructure. Revenue increases in the last quarter stemmed from a greater field activity that should continue a more positive trend in the ensuing quarters."

Stellar International, London, Ontario, has developed and is marketing three products in Canada based on its core polysaccharide technology: NeoVisc, for the treatment of osteoarthritis, Uracyst-S and the Uracyst Test Kit, Stellar's patented technology for the diagnosis and treatment of Interstitial Cystitis (IC), an inflammatory disease of the urinary bladder wall. The Uracyst treatment for IC costs less than competing products and has shown a good symptomatic response rate.

For more information, call 800/639-0643 or 519/434-1540.