Medicis Reports First Quarter Fiscal 2001 Financial Results

SCOTTSDALE, Ariz.--Oct. 19, 2000--Medicis Pharmaceutical Corporation (NYSE:MRX) today announced first quarter fiscal 2001 revenues of $40.3 million and net income of $12.0 million, or $0.38 per diluted share, compared to first quarter fiscal 2000 revenues of $31.6 million and net income of $9.6 million, or $0.33 per diluted share. Reported fiscal 2001 first quarter results exclude the tax-effected special charge for the research and development expense of $11.5 million relating to the $17.8 million incurred in the collaboration with Corixa Corporation for a novel psoriasis immunotherapeutic product currently under development.

Net revenue increased approximately 27% for the first quarter from the prior year, commensurate with the increase in prescription volumes of the Company's core growth brands, DYNACIN(R), LOPROX(R), LUSTRA(R), TRIAZ(R) and OVIDE(R). The aggregate prescription growth of the Company's core growth brands increased approximately 52% as compared to the first quarter of the prior fiscal year. Additionally, the Company launched during the quarter PLEXION(TM), a novel prescription rosacea cleanser. Medicis reported consistent gross profit margins of approximately 81.4% and consistent net income margins of approximately 29% as a percentage of net revenues. Medicis was able to maintain the high net income margins (excluding the special charge) while increasing promotional spending by approximately 82% as compared to the same quarter in the previous year.

Cash flow from operations for the fiscal 2001 first quarter was $9.3 million. Operational cash was generated during the quarter as a result of net income, an income tax receivable collected during the quarter, reductions in receivables and inventories, and positive cash flow fluctuations in other balance sheet accounts offset by the research and development expenses associated with the Corixa collaboration.

"We are pleased to announce another record quarter driven by continued strong performance of our core growth brands," said Jonah Shacknai, chairman and chief executive officer of Medicis. "We believe the future of Medicis is extremely bright, with growth of our brands, launch of novel products like PLEXION(TM) and our recently announced collaboration with Corixa, which has the potential to yield a breakthrough drug in dermatology. This novel psoriasis product provides a unique glimpse within the Medicis pipeline and represents only one of several exciting projects we are developing. Additionally, we are extremely encouraged by the enthusiastic response by physicians and patients to our newly launched prescription rosacea cleanser, PLEXION(TM)."

Medicis is the leading independent pharmaceutical company in the United States focusing primarily on the treatment of dermatological conditions. Medicis develops and markets leading products for major segments within dermatology including acne, fungal infections, psoriasis, eczema, rosacea, seborrheic dermatitis, head lice and cosmesis (improvement in the texture and appearance of skin). Primary products include the prescription brands DYNACIN(R) (minocycline HCl), TRIAZ(R) (benzoyl peroxide), LUSTRA(R) (hydroquinone), LOPROX(R) (ciclopirox), OVIDE(R) (malathion), PLEXION(TM) (sodium sulfacetamide/sulfur), LIDEX(R) (fluocinonide), SYNALAR(R) (fluocinolone acetonide), TOPICORT(R) (desoximetasone), NOVACET(R) (sodium sulfacetamide/sulfur) and A/T/S(R) (erythromycin); the over-the-counter brand ESOTERICA(R); and BUPHENYL(TM) (sodium phenylbutyrate), a prescription product indicated in the treatment of Urea Cycle Disorder.

Except for historical information, this news release contains certain forward-looking statements that involve risks and uncertainties which may cause actual results to differ materially from the statements made, including the Company's dependence on sales of key products, uncertainty of future financial results and fluctuations in operating results, dependence on the Company's acquisition strategy, new product introductions and other risks described from time to time in the Company's SEC filings. These forward-looking statements represent the judgment of the Company, as of the date of this release, and Medicis disclaims any intent or obligation to update these forward-looking statements.

NOTE: Full prescribing information for any Medicis prescription product is available by contacting the Company.

                  Medicis Pharmaceutical Corporation
                 (in thousands, except per share data)
                   Summary Statements of Operations

                                               Three Months Ended
                                                  September 30,
                                                 2000        1999
  Revenues                                      $ 40,254     $ 31,644
  Cost of sales                                    7,480        5,786
                                               --------     --------
   Gross profit                                  32,774       25,858
 Operating expenses:
   Selling, general and administrative           15,164        9,941
   Research and development                      19,226(a)     1,596
   Depreciation and amortization                  1,939        1,693
                                               --------     --------
     Total operating expenses                    36,329       13,230
   Operating (loss)/income                       (3,555)      12,628
 Interest income, net                             4,357        2,645
 Income tax expense                                (285)      (5,633)
                                               --------     --------
   Net income                                  $    517     $  9,640
                                               ========     ========
 Basic net income per common share             $   0.02     $   0.34
                                               ========     ========
 Diluted net income per common share           $   0.02     $   0.33
                                               ========     ========
 Shares used in basic net income per
  common share                                   29,645       28,750
 Shares used in diluted net income
  per common share                               31,624       29,471

 Cash flow from operations                     $  9,265     $ 10,168
 Absent tax-effected adjustment for special R&D charge of $11,473:

   Net income                                  $ 11,991     $  9,640
                                               ========     ========
   Basic net income per common share           $   0.40     $   0.34
                                               ========     ========
   Diluted net income per common share         $   0.38     $   0.33
                                               ========     ========
 (a) Reported R&D expenses include special charge of $17,788 relating
 to the Corixa collaboration

                             Balance Sheets

                                           At September 30, At June 30,
                                                 2000          2000
                                           ---------------- -----------
   Cash and short-term investments             $304,437     $285,737
   Accounts receivable, net                      32,199       33,164
   Inventory, net                                 9,189       10,002
   Other current assets                          16,824       22,385
                                               --------     --------
     Total current assets                       362,649      351,288
   Property and equipment, net                    1,868        1,759
   Intangible assets, net                       140,444      141,182
   Other assets                                   3,532        1,110
                                               --------     --------
     Total assets                              $508,493     $495,339
                                               ========     ========

 Liabilities and stockholders' equity
   Current liabilities                         $ 39,014     $ 38,987
   Deferred tax liabilities                          --        4,000
   Long-term obligations                         15,360       14,913
   Stockholders' equity                         454,119      437,439
                                               --------     --------
     Total liabilities and stockholders'
      equity                                   $508,493     $495,339
                                               ========     ========
 Working capital                               $323,635     $312,301
                                               ========     ========
Medicis Pharmaceutical Corporation, Scottsdale
Libby Ivy, 602/808-3854
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