For release at 6:30 a.m.
 Contact:
 DUSA Pharmaceuticals Reports
Second Quarter 2009 Corporate Highlights and Financial Results
 Q2 Domestic PDT revenues up 24% year over year;
Kerastick margins reach a record high of 85%
 WILMINGTON, Mass.  August 11, 2009 ® ®
 Financial highlights for the second quarter and first half of the year include:
 
    
    Domestic PDT revenues totaled $6.1 million for the second quarter of 2009, representing
a $1.2 million, or 24%, improvement as compared to the second quarter of 2008. First half
2009 domestic PDT revenues totaled $12.4 million, representing a $2.3 million, or 22%,
improvement year over year.
    
    Domestic Kerastick® revenues totaled $5.6 million for the second quarter of
2009, representing a $1.0 million, or 23%, improvement as compared to the second quarter of
2008. First half 2009 domestic Kerastick®revenues totaled $11.3 million,
representing a $2.0 million, or 21%, improvement year over year.
    
    Domestic BLU-U® revenues totaled $0.5 million for the second quarter of 2009,
representing a $0.1 million, or 38%, improvement as compared to the second quarter of 2008.
First half 2009 domestic BLU-U® revenues totaled $1.1 million, representing a
$0.3 million, or 36%, improvement year over year.
    
    Kerastick® gross margins for the second quarter of 2009 reached a record high
of 85%.
 Management Comments:
 ®




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® ®
  Second Quarter 2009 Financial Results:
 ® ® ® ® ® ® ® ® ®




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First Half 2009 Financial Results:
 ® ® ® ® ® ® ® ®
    Other Updates:
 
    
    Clinical Development.
 
    
    On May 11, 2009, the Company announced the initiation of its Phase II clinical trial
that will examine the safety and efficacy of broad area PDT for the treatment of
actinic keratoses and the reduction of new non-melanoma skin cancer (NMSC) in high risk
chronically immunosuppressed solid organ transplant recipients (SOTRs). In May 2008,
we filed an Orphan Drug Designation Application with the FDA with respect to the
prevention of cancer occurrence in these patients. We recently received correspondence
that the application was not granted on the basis that the agency believes that the
prevalence of the target population with the disease state is greater than 200,000,
which is the maximum number of patients allowed under the Orphan Drug legislation. The
Company has requested a meeting with the FDA to provide further clarification on the
application and the related target population.




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
    
    BLU-U® Claims Expansion.
 
    
    In May of 2009, the Company filed a 510(k) application with the FDA to expand
the allowed claims on BLU-U® to include severe acne. The filing was based
on the results of our Phase IIb clinical trial. We received a response to our
application from the FDA in June 2009. The agency has requested additional information
in order to complete its review of our application, including supplementary clinical
data in support of our claims. The Company has requested a meeting with the FDA to
clarify its position and is currently evaluating its next steps as it relates to the
application.
 
    
    Nicomide®.
 
    
    On April 27, 2009, the Company announced that it had amended its existing
non-exclusive license agreement with Rivers Edge, granting them an exclusive license
to the patent that covers Nicomide® (U.S. Patent No. 6,979,468) and associated
know-how, as well as a license to use the trademark associated with the licensed
products. DUSA received the first $200,000 installment payment under the License
Amendment during the three-month period ended June 30, 2009. DUSA has not received
payments which were due on June 1, July 1, and August 1, 2009 respectively. We are
evaluating our options to collect the amounts due from Rivers Edge under the License
Agreement.




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Three-months ended June 30,
    
    
    Six-months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)PDT Drug & Device Product RevenuesKerastick® Product Revenues:United States
    
    $
    5,621,000
    
    
    $
    4,572,000
    
    
    $
    11,306,000
    
    
    
    $9,346,000Canada
    
    
    108,000
    
    
    
    218,000
    
    
    
    243,000
    
    
    
    377,000Korea
    
    
    126,000
    
    
    
    159,000
    
    
    
    296,000
    
    
    
    524,000Other
    
    
    84,000
    
    
    
    133,000
    
    
    
    171,000
    
    
    
    190,000Subtotal Kerastick® Product Revenues
    
    
    5,939,000
    
    
    
    5,082,000
    
    
    
    12,016,000
    
    
    
    10,437,000BLU-U® Product Revenues:United States
    
    
    479,000
    
    
    
    347,000
    
    
    
    1,121,000
    
    
    
    822,000Subtotal BLU-U® Product Revenues
    
    
    479,000
    
    
    
    347,000
    
    
    
    1,121,000
    
    
    
    822,000Total PDT Drug & Device Product Revenues
    
    
    6,418,000
    
    
    
    5,429,000
    
    
    
    13,137,000
    
    
    
    11,259,000Total Non-PDT Product Revenues
    
    
    548,000
    
    
    
    2,683,000
    
    
    
    967,000
    
    
    
    4,783,000TOTAL PRODUCT REVENUES
    
    $
    6,966,000
    
    
    $
    8,112,000
    
    
    $
    14,104,000
    
    
    $
    16,042,000




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June 30,2009
    
    December 31,(Unaudited)
    
    2008ASSETSCURRENT ASSETSCash and cash equivalents
    
    $
    3,894,037
    
    
    $
    3,880,673Marketable securities
    
    
    12,488,406
    
    
    
    15,002,830Accrued interest receivable
    
    
    144,523
    
    
    
    155,728Accounts receivable, net
    
    
    1,550,149
    
    
    
    2,367,803Inventory
    
    
    2,550,463
    
    
    
    2,812,825Prepaid and other current assets
    
    
    1,341,263
    
    
    
    1,718,073TOTAL CURRENT ASSETS
    
    
    21,968,841
    
    
    
    25,937,932Restricted cash
    
    
    174,080
    
    
    
    173,844Property, plant and equipment, net
    
    
    1,773,485
    
    
    
    1,937,978Deferred charges and other assets
    
    
    68,099
    
    
    
    160,700TOTAL ASSETS
    
    $
    23,984,505
    
    
    $
    28,210,454LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIESAccounts payable
    
    $
    466,984
    
    
    $
    305,734Accrued compensation
    
    
    497,848
    
    
    
    1,515,912Other accrued expenses
    
    
    2,423,767
    
    
    
    3,226,571Deferred revenue
    
    
    717,897
    
    
    
    611,602TOTAL CURRENT LIABILITIES
    
    
    4,106,496
    
    
    
    5,659,819Deferred revenues
    
    
    3,633,727
    
    
    
    4,157,305Warrant liability
    
    
    498,188
    
    
    
    436,458Other liabilities
    
    
    144,069
    
    
    
    244,673TOTAL LIABILITIES
    
    
    8,382,480
    
    
    
    10,498,255SHAREHOLDERS EQUITYCapital stockAuthorized: 100,000,000 shares;
40,000,000 shares designated as common
stock, no par, and 60,000,000 shares
issuable in series or classes; and 40,000
junior Series A preferred shares. Issued
and outstanding: 24,108,908 and
24,089,452 shares of common stock, no
par, at June 30, 2009 and December 31,
2008, respectively
    
    
    151,683,399
    
    
    
    151,663,943Additional paid-in capital
    
    
    7,915,624
    
    
    
    7,514,900Accumulated deficit
    
    
    (144,310,565
    )
    
    
    (141,850,925
    )Accumulated other comprehensive loss
    
    
    313,567
    
    
    
    384,281TOTAL SHAREHOLDERS EQUITY
    
    
    15,602,025
    
    
    
    17,712,199TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
    
    $
    23,984,505
    
    
    $
    28,210,454




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Three-months ended June 30,
    
    
    Six-months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)Product revenues
    
    $
    6,965,541
    
    
    $
    8,112,239
    
    
    $
    14,103,810
    
    
    $
    16,041,739Cost of product revenues and royalties
    
    
    1,440,864
    
    
    
    1,787,694
    
    
    
    3,379,090
    
    
    
    3,488,011Gross margin
    
    
    5,524,677
    
    
    
    6,324,545
    
    
    
    10,724,720
    
    
    
    12,553,728Operating costs:Research and development
    
    
    1,076,709
    
    
    
    1,375,302
    
    
    
    2,261,804
    
    
    
    3,561,511Marketing and sales
    
    
    3,037,311
    
    
    
    3,496,233
    
    
    
    6,447,415
    
    
    
    6,553,434General and administrative
    
    
    2,340,947
    
    
    
    2,325,137
    
    
    
    4,482,397
    
    
    
    4,692,961Settlements, net
    
    
    75,000
    
    
    
    (47,825
    )
    
    
    75,000
    
    
    
    (283,425
    )Total operating costs
    
    
    6,529,967
    
    
    
    7,148,847
    
    
    
    13,266,616
    
    
    
    14,524,481Loss from operations
    
    
    (1,005,290
    )
    
    
    (824,302
    )
    
    
    (2,541,896
    )
    
    
    (1,970,753
    )Other income:Gain/(loss) on change in fair value of warrants
    
    
    73,183
    
    
    
    468,411
    
    
    
    (61,730
    )
    
    
    123,869Other income, net
    
    
    79,398
    
    
    
    217,100
    
    
    
    143,986
    
    
    
    423,952Net loss
    
    $
    (852,709
    )
    
    $
    (138,791
    )
    
    $
    (2,459,640
    )
    
    $
    (1,422,932
    )Basic and diluted net loss per common share
    
    $
    (0.04
    )
    
    $
    (0.01
    )
    
    $
    (0.10
    )
    
    $
    (0.06
    )Weighted average number of common shares
    
    
    24,100,874
    
    
    
    24,078,610
    
    
    
    24,095,149
    
    
    
    24,078,514




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Use of Non-GAAP Financial Measures
   Three-months ended June 30,
    
    
    Six-months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)
    
    
    (Unaudited)GAAP net loss
    
    $
    (852,709
    )
    
    $
    (138,791
    )
    
    $
    (2,459,640
    )
    
    $
    (1,422,932
    )Stock-based compensation (a)
    
    
    225,466
    
    
    
    357,912
    
    
    
    424,593
    
    
    
    689,550Consideration to former Sirius shareholders (b)
    
    
    305,000
    
    
    
    
    
    
    
    305,000
    
    
    
    Change in fair value of warrants (c)
    
    
    (73,183
    )
    
    
    (468,411
    )
    
    
    61,730
    
    
    
    (123,869
    )Non-GAAP adjusted net loss
    
    $
    (395,426
    )
    
    $
    (249,290
    )
    
    $
    (1,668,317
    )
    
    $
    (857,251
    )Non-GAAP basic and diluted net loss per common
share
    
    $
    (0.02
    )
    
    $
    (0.01
    )
    
    $
    (0.07
    )
    
    $
    (0.04
    )Weighted average number of common shares
    
    
    24,100,874
    
    
    
    24,078,610
    
    
    
    24,095,149
    
    
    
    24,078,514
 
 (a)
    
    Stock-based compensation expense resulting from the application of SFAS 123(R).(b)
    
    Payment of $100,000 and accrual of $205,000 related to the release, consent and the
third amendment to the merger agreement between DUSA and the former Sirius shareholders.(c)
    
    Non-cash gain/loss on change in fair value of warrants.




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