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Exhibit 99.1
Contact: Zonagen
Joseph Podolski
(281) 719-3447
ZONAGEN ANNOUNCES PLAN TO REVIEW STRATEGIC ALTERNATIVES
AND REDUCE CASH EXPENDITURES
The Woodlands, TX, July 27, 2000 - Zonagen, Inc. (NASDAQ: ZONA; Pacific ZNG)
today announced that Deutsche Banc Alex. Brown has been engaged to review
strategic alternatives for redeploying its assets.
"The most recent delays in the regulatory approval process of
VASOMAX(TM) have caused Zonagen's Board to actively pursue strategic
alternatives that will maximize shareholder value in the near term," commented
Martin P. Sutter, Chairman of the Board. He further noted, "While we feel that
the Company's technology portfolio has promising potential, the uncertainties
surrounding the VASOMAX(TM) regulatory process lead us to seek to diversify the
risks of our product development programs, while retaining a substantial
portion of the upside potential of VASOMAX(TM). We expect to accomplish this
objective by finding a business combination that will allow us to redeploy a
significant portion of our approximately $34.0 million in cash into other
development programs that will diversify Zonagen's investors' opportunities to
realize meaningful returns. To preserve cash and to maximize the impact of this
decision, the Board has instructed management to immediately implement a cost
reduction program involving a significant headcount reduction and other major
cost cutting measures."
The Company's Board of Directors has made the decision to review
strategic alternatives as a result of the previously announced delays
associated with the Company's lead product VASOMAX(TM). At the same time, the
Board has elected to reduce cash expenditures and conserve resources as part of
the redeployment strategy. Accordingly, Zonagen will pare headcount to the
minimum required to maintain existing technologies and commitments during this
transitional period. As a result of this decision, more than one-half of the
Company's employees will be laid-off immediately, leaving approximately 13
fulltime employees including Joseph S. Podolski, President and CEO.
Zonagen, Inc. is engaged in the development of pharmaceutical
products for the reproductive system, including sexual dysfunction, urology,
contraception, and infertility.
A copy of this press release may be obtained via facsimile by
dialing 1-888-329-0920 or via the Internet by accessing www.zonagen.com.
Any statements that are not historical facts contained in this
release are forward-looking statements that involve risks and uncertainties,
including but not limited to those relating to the company's early stage of
development, clinical trial results and the uncertainty of obtaining FDA
approval in the U.S. and approval of regulatory authorities in other
jurisdictions, substantial dependence on one product, history of operating
losses, future capital needs and uncertainty of additional funding, ability to
protect patents and proprietary technology, litigation, governmental
regulation, limited sales and marketing experience and dependence on
collaborators, limited manufacturing capabilities and reliance on third
parties, competition and technological change, product liability and
availability of insurance and other risks identified in the Company's Annual
Report on Form 10-K for the year ended December 31, 1999, as filed with the
Securities and Exchange Commission.
