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Exhibit 99.1
PRESS RELEASE
SOURCE: AAI International, Inc.
AAI ANNOUNCES SUCCESSFUL COMPLETION OF PRELIMINARY CLINICAL STUDIES FOR
OSMOTICALLY-DELIVERED FORMULATIONS OF FEXOFENADINE AND PSEUDOEPHEDRINE;
POSITIVE RESULTS MAY PROLONG NEGOTIATIONS WHILE AAI SEEKS HIGHER VALUE
WILMINGTON, N.C., Sept. 27 /PRNewswire/ -- AAI International, Inc. (Nasdaq: AAII
- news) today announced the successful completion of early phase, in vivo, human
studies for a unique once-a-day combination of fexofenadine and pseudoephedrine
for allergic seasonal rhinitis. Fexofenadine is an active ingredient in leading
products for this indication. This new preparation, protected by a patent
available through the recently announced partnership between AAI and Osmotica
Corporation, is the result of a rapid development program initiated at the
expense of the partnership.
On-going licensing negotiations, expected to be concluded in the third
quarter, may now extend beyond the end of the quarter. The impact of prolonging
these negotiations, should it occur, will result in a $1 to $2 million shortfall
in third quarter's revenues and earnings. However, AAI is reevaluating its
licensing strategy and price for the product in light of the new clinical data
and the additional time which the delay has provided.
Dr. Fred Sancilio, Chairman and Chief Executive Officer of AAI, noted,
"When this development program started, we did not anticipate bearing the costs
associated with the clinical studies. We assumed that our licensing partner
would bear that risk, and we therefore adjusted the price of the product license
accordingly. At this point, risk associated with this development program has
been substantially reduced, and the new price will reflect that new
risk-profile. In fact, beyond the current negotiations, we are going to use this
clinical data to demonstrate the power of this new technology. We are already
evaluating a similar product development project using another popular
medication currently marketed for the same indication."
Dr. Sancilio also said that, "While the potential for significant
long-term revenues exist from our product development and licensing activities,
we have frequently discussed the volatility of the royalties and fees associated
with the program. In this business, we expense R&D costs as they are incurred
but record revenues only according to milestone achievements noted in a signed
contract. However, I feel comfortable that revenues can exceed those generated
in the third quarter of 1999, even if this particular contract is delayed." Mr.
William Underwood, Executive Vice President of Corporate Development for AAI,
further noted, "We are very pleased with the faster than expected progress of
the development of this new combination product, using the technologies,
expertise and capacity that we have available through our recent partnership
with Osmotica. This clinical proof of our ability to combine two very different
medications, with different delivery profiles, in a single pharmaceutically
elegant dosage form is an important scientific accomplishment."
"However," Underwood continued, "although the scientific progress is
very gratifying, I am disappointed that our commercialization discussions on
this product with our initial customer have not kept pace with the technical and
scientific progress. In fact, it has taken longer to negotiate the license than
to develop the product itself."
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"Now that the technology has been proven in vivo, AAI is eager to
complete negotiations with a pharmaceutical partner on a full-value basis. In
the meantime, AAI's research and development program in allergic seasonal
rhinitis using various combination product formulations continues with the next
clinical study scheduled to be completed in mid-October," concluded Dr.
Sancilio.
About AAI
AAI is a specialty pharmaceutical and product development company with
comprehensive drug development capabilities in the United States, Europe and
Asia. Since 1979, AAI has partnered with pharmaceutical companies on both a
fee-for-service and royalty and milestone payment basis, providing the expertise
and knowledge to create quality health care products. The company has earned a
reputation for solving complex pharmaceutical challenges utilizing analytical
testing and formulations development techniques, as well as validation and
regulatory affairs support services. Its stock is listed on Nasdaq (AAII). For
more information about AAI, visit the company's website at
http://www.aaiintl.com.
Forward-Looking Statements
Information in this press release contains certain "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities and Exchange Act of 1934, including statements
made in the second paragraph with respect to patent protection for the described
combination product, in the third paragraph concerning the potential for delay
(and resulting impact on revenues and earnings) associated with the described
negotiations, and statements by Dr. Fred Sancilio in the fourth, fifth and
eighth paragraphs concerning further development risk, pricing of the product
license, AAI's anticipated third quarter financial results, and on-going
research and development and commercialization negotiations. These statements
involve risks and uncertainties that could cause actual results to differ
materially, including, without limitation, risks and uncertainties pertaining to
the Company's ability to successfully complete development of product solutions
using osmotic and other drug delivery systems and successfully enter into
profitable commercialization contracts on a full-value basis with its customers.
Additional factors that may cause the actual results to differ materially are
discussed in the Company's recent filings with the Securities and Exchange
Commission, including, but not limited to, its registration statement, as
amended, its Annual Report on Form 10-K filed with the SEC on March 30, 2000,
its Quarterly Reports on Form 10-Q filed with the SEC on May 15, 2000 and August
14, 2000, including the exhibits thereof, its Form 8-Ks and its other periodic
filings.
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