Emisphere Technologies, Inc.
May 7, 2009

Emisphere Technologies, Inc. Reports First Quarter 2009 Financial Results

Conference Call/Webcast to be held Today, May 7, 2009 at 10:00 AM EDT

CEDAR KNOLLS, N.J., May 07, 2009 (BUSINESS WIRE) -- Emisphere Technologies, Inc. (NASDAQ: EMIS) today announced its financial results for the three months ended March 31, 2009.

Emisphere will host a conference call to discuss first quarter financial results at 10:00 AM EDT Thursday, May 7, 2009. The live webcast of the conference call can be accessed through the company's web site at: www.emisphere.com. The live conference call dial-in number is: 1-877-440-5785 (United States and Canada) or 1-719-325-4924 (International). In addition, an archive of the webcast can be accessed through the same link; an audio replay of the call will be available following the conference call by calling 1-888-203-1112 (United States and Canada) or 1-719-457-0820 (International). The conference replay PIN is 4035727.

FIRST QUARTER FINANCIAL RESULTS

For the three months ended March 31, 2009

Emisphere reported a net loss of $5.1 million, or $0.17 cents per basic and diluted share for the three months ended March 31, 2009, including a $0.35 million one time favorable adjustment to the restructuring charge associated with the closure of its research and development facility in Tarrytown, New York. This compares with a net loss of $3.9 million, or $0.13 cents per basic and diluted share for same period last year.

The operating loss for the three months ended March 31, 2009 was $4.7 million, compared to operating loss of $6.5 million for same period last year.

Total operating expenses were $4.7 million for the three months ended March 31, 2009; a decrease of approximately $2.0 million, or 30%, compared to $6.6 million for the same period last year. Total operating expenses for the three months ended March 31, 2009 include research and development costs of $1.9 million, general and administrative expenses of $2.9 million, and the $0.35 million one time favorable adjustment to the restructuring charge, compared to $3.8 million and $2.7 million respectively, for the same period last year.

Other expense for the three months ended March 31, 2009 was $0.4 million, compared to other income of $2.5 million for the same period last year.

LIQUIDITY

At March 31, 2009, Emisphere Technologies reported cash and restricted cash of $4.2 million, compared to $7.5 million at December 31, 2008.

On April 29, 2009, the Company entered into a Lease Termination Agreement with its landlord BioMed Realty Trust, Inc. ("BMR") in connection with its laboratory facilities in Tarrytown. Under the agreement, Emisphere's lease obligations were terminated on April 1, 2009 in exchange for $2.25 million, payable in installments of $1.0 million on April 30, 2009; $0.5 million on October 29, 2009; and $0.75 million on April 29, 2010.

By terminating its Tarrytown lease, the Company's monthly cash burn rate is reduced by approximately $0.3 million immediately. In addition, a total of approximately $14 million in future lease payments were eliminated.

"During the quarter, we realized a critical milestone in our cost control plan, which will help the Company meet its cash burn target of between $7 and $8 million per year," said Michael V. Novinski, President and Chief Executive Officer of Emisphere Technologies, Inc. "Together with the recent achievement of provisional GRAS status for our SNAC carrier for use with nutrients added to foods and dietary supplements, we are now well on our way to reaching our goal, not only of extending our cash runway, but also toward realizing the commercial promise of our proprietary Eligen® Technology."

The Company anticipates that its existing capital resources are sufficient to enable it to continue operations through August 2009. The Company continues to implement aggressive cost controls to conserve its cash and evaluate both non-dilutive and traditional financing options.

PRODUCT AND CORPORATE DEVELOPMENTS

Emisphere Technologies reported the following recent corporate developments:

About Emisphere Technologies, Inc.

Emisphere is a biopharmaceutical company that focuses on a unique and improved delivery of therapeutic molecules or nutritional supplements using its Eligen® Technology. These molecules and compounds could be currently available or in development. Such molecules are usually delivered by injection; in many cases, their benefits are limited due to poor bioavailability, slow on-set of action or variable absorption. The Eligen® Technology can be applied to the oral route of administration as well other delivery pathways, such as buccal, rectal, inhalation, intra-vaginal or transdermal. The company's website is: www.emisphere.com.

Safe Harbor Statement Regarding Forward-looking Statements

The statements in this release and oral statements made by representatives of Emisphere relating to matters that are not historical facts (including without limitation those regarding the timing or potential outcomes of research collaborations or clinical trials, any market that might develop for any of Emisphere's product candidates and the sufficiency of Emisphere's cash and other capital resources) are forward-looking statements that involve risks and uncertainties, including, but not limited to, the likelihood that future research will prove successful, the likelihood that any product in the research pipeline will receive regulatory approval in the United States or abroad, the ability of Emisphere and/or its partners to develop, manufacture and commercialize products using Emisphere's drug delivery technology, Emisphere's ability to fund such efforts with or without partners, and other risks and uncertainties detailed in Emisphere's filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in Emisphere's Annual Report on Form 10-K (file no. 000-17758) filed on March 16, 2009.

 
EMISPHERE TECHNOLOGIES, INC.
     
CONDENSED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2009 and 2008
(in thousands, except share and per share data)
(unaudited)
         
      For the three months ended
    March 31,
    2009   2008
Revenue  

$

-

    $ 154  
Costs and expenses:          
Research and development     1,923       3,832  
General and administrative expenses     2,921       2,693  
Restructuring costs     (353 )     -  
Gain on disposal of fixed assets     (43 )     (135 )
Depreciation and amortization     211       226  
Total costs and expenses     4,659       6,616  
Operating income (loss)     (4,659 )     (6,462 )
           
Other non-operating income (expense):          
Other income (expense)     41       142  
Sublease income     232       90  
Sale of patents     -       1,500  
Change in fair value of derivative instruments          
Related party     51       724  
Other     39       769  
Interest expense          
Related party     (662 )     (575 )
Other     (135 )     (130 )
Total other non-operating income (expense)     (434 )     2,520  
Net loss  

$

(5,093

)   $ (3,942 )
Net loss per share, basic and diluted  

$

(0.17

)   $ (0.13 )
Weighted average shares outstanding, basic and diluted     30,341,078       30,336,928  
                 
 
EMISPHERE TECHNOLOGIES INC.
         
CONDENSED BALANCE SHEETS
March 31, 2009 and December 31, 2008
(in thousands, except share and per share data)
         
         
    March 31,   December 31,
    2009   2008
    (unaudited)    
Assets:        
Current assets:        
Cash and cash equivalents   $ 3,951     $ 7,214  
Accounts receivable, net of allowance of $9 in March '09 and December '08     15       232  
Prepaid expenses and other current assets     300       273  
Total Current Assets     4,266       7,719  
Equipment and leasehold improvements, net     312       465  
Purchased technology, net     1,256       1,316  
Restricted cash     255       255  
Other assets     404       421  
Total Assets   $ 6,493     $ 10,176  
         
Liabilities and Stockholders' Deficit:        
Current liabilities:        
Notes payable, including accrued interest and net of related discount   $ 12,146     $ 12,011  
Accounts payable and accrued expenses     3,288       2,361  
Deferred revenue, current     110       87  
Derivative instruments        
Related party     102       153  
Others     75       114  
Restructuring charge, current     1,503       927  
Other current liabilities     22       20  
Total Current Liabilities     17,246       15,673  
Notes payable, including accrued interest and net of related discount     18,854       18,209  
Restructuring charge     750       1,953  
Deferred revenue     11,403       11,240  
Deferred lease liability and other liabilities     123       129  
Total Liabilities     48,376       47,204  
Stockholders' deficit:        
Preferred stock, $.01 par value; authorized 1,000,000 shares; none issued and outstanding        

Common stock, $.01 par value; authorized 100,000,000 shares; issued 30,630,810

shares (30,341,078 outstanding) as of March 31, 2009 and December 31, 2008

    306       306  
Additional paid-in-capital     400,544       400,306  
Accumulated deficit     (438,781 )     (433,688 )
Common stock held in treasury, at cost; 289,732 shares     (3,952 )     (3,952 )
Total Stockholders' Deficit     (41,883 )     (37,028 )
Total Liabilities and Stockholders' Deficit   $ 6,493     $ 10,176  

SOURCE: Emisphere Technologies, Inc.

Emisphere Technologies, Inc.
Michael Garone, 973-532-8005
Chief Financial Officer
mgarone@emisphere.com
or
Rx Communications Group:
Eric Goldman (media), 917-322-2563
egoldman@rxir.com
or
Rhonda Chiger, 917-322-2569
rchiger@rxir.com

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