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Pain Therapeutics Announces Second Quarter 2006 Financial Results

SOUTH SAN FRANCISCO, Calif., Aug. 9 -- Pain Therapeutics, Inc. (Nasdaq: PTIE), a biopharmaceutical company, today reported financial results for the three and six months ended June 30, 2006. Net income for the quarter ended June 30, 2006 was $1.4 million, or $0.03 per share, compared to a net loss of $10.2 million, or $0.23 per share, in the second quarter of 2005. The net income for the six months ended June 30, 2006 was $2.2 million, or $0.05 per share, compared to a net loss of $18.8 million, or $0.43 per share, for the same period in 2005.

Cash, cash equivalents and marketable securities were $205.3 million at June 30, 2006. Pain Therapeutics continues to expect its cash requirements for 2006 to be $15 million, plus or minus 10%.

"We believe we're in strong financial shape and we continue to make solid progress across our business," said Remi Barbier, Pain Therapeutics' president and chief executive officer. "We are pleased with the continued advancement of our existing pipeline and we continue to uncover attractive and affordable potential in-licensing opportunities from top academic labs in the areas of pain management and hematology/oncology."

Pain Therapeutics recently received a $5 million milestone payment from King Pharmaceuticals, Inc., its worldwide strategic partner for Remoxy(TM), PTI-202 and two other abuse-resistant opioids painkillers. This was the first milestone payment under the strategic alliance between the two companies. A total of up to $150 million may be paid by King Pharmaceuticals to Pain Therapeutics, contingent upon the achievement of regulatory and clinical milestones over the course of the strategic alliance.

2006 Financial Highlights

About Pain Therapeutics, Inc.

Pain Therapeutics is a biopharmaceutical company that develops novel drugs. We have three investigational drug candidates in clinical programs. Remoxy and PTI-202 are proprietary, abuse-resistant forms of currently prescribed opioid drugs. Oxytrex(TM) is a novel, next-generation painkiller that potentially offers less physical dependence than currently marketed opioid painkillers. These three drugs target different segments of the multi-billion dollar market to treat severe chronic pain, such as persistent low-back pain or pain due to advanced stages of osteoarthritis. The FDA has not yet evaluated the merits, safety or efficacy of our drug candidates. For more information, please consult our website: www.paintrials.comwww.paintrials.com.

Our Strategic Alliance with King Pharmaceuticals, Inc.

We have a strategic alliance with King Pharmaceuticals for Remoxy, PTI-202 and two other abuse-resistant opioid painkillers. In December 2005, King paid us $150 million in cash as an up-front payment. King is also obligated to pay us up to $150 million in cash based upon the successful achievement of additional clinical or regulatory milestones for Remoxy, PTI-202 and two other abuse-resistant opioid painkillers. King funds development expenses pursuant to the strategic alliance and is obligated to pay us a 20% royalty on net sales of drugs, except as to the first $1 billion in cumulative net sales, for which the royalty is set at 15%. In exchange, King received worldwide commercial rights to Remoxy, PTI-202 and two other abuse-resistant drugs developed under the strategic alliance.

Note Regarding Forward-Looking Statements: This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the "Act"). Pain Therapeutics disclaims any intent or obligation to update these forward-looking statements, and claims the protection of the Safe Harbor for forward-looking statements contained in the Act. Examples of such statements include, but are not limited to, any statements relating to the timing, scope or expected outcome of the Company's clinical development of its drug candidates, the potential benefits of the Company's drug candidates, the Company's expected cash requirements and fluctuations in income tax expenses in 2006, and the size of the potential market for the Company's products. Such statements are based on management's current expectations, but actual results may differ materially due to various factors. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in development and testing of the Company's drug candidates, unexpected adverse side effects or inadequate therapeutic efficacy of the Company's drug candidates (including the risk that current and past results of clinical trials are not necessarily indicative of future results of clinical trials), the uncertainty of patent protection for the Company's intellectual property or trade secrets and unanticipated research and development and other costs. For further information regarding these and other risks related to the Company's business, investors should consult the Company's filings with the Securities and Exchange Commission.


                            PAIN THERAPEUTICS, INC
                      CONDENSED STATEMENTS OF OPERATIONS
                   (in thousands, except per share amounts)
                                 (Unaudited)

                                         Three Months Ended   Six Months Ended
                                              June 30,           June 30,
                                           2006       2005    2006       2005
    Revenue:
      Program fee revenue                 $6,550       $--  $13,100       $--
      Collaboration revenue                7,196        --   15,972        --
        Total revenue                     13,746        --   29,072        --
    Operating expenses (1):
      Research and development            10,188     9,518   23,042    17,640
      General and administrative           2,049     1,139    4,019     2,177
         Total operating expenses         12,237    10,657   27,061    19,817
    Operating income (loss)                1,509   (10,657)   2,011   (19,817)
    Other income
    Interest income                        2,468       475    4,556     1,046
    Income (loss) before income tax        3,977   (10,182)   6,567   (18,771)
    Income tax expense                     2,610        --    4,323        --
    Net income (loss)                     $1,367  $(10,182)  $2,244  $(18,771)
    Earnings per share
      Basic                                $0.03    $(0.23)   $0.05    $(0.43)
      Diluted                              $0.03    $(0.23)   $0.05    $(0.43)
    Weighted-average shares used to
     compute earnings per share
      Basic                               44,138    43,744   44,067    43,704
      Diluted                             45,258    43,744   45,381    43,704

    (1) Included in research and development and general and administrative
    expenses are non-cash stock-based compensation expenses of $794 thousand
    and $642 thousand, respectively, totaling $1,435 thousand for the three
    months ended June 30, 2006 and $1,750


                           PAIN THERAPEUTICS, INC.
                           CONDENSED BALANCE SHEETS
                                (in thousands)

                                                  June 30,        December 31,
                                                    2006             2005(2)
                                                (Unaudited)
    Assets
    Current assets:
      Cash, cash equivalents and
       marketable securities                      $205,341           $212,652
      Collaboration revenue receivable               6,305                889
      Prepaid expenses                                  47                623
        Total current assets                       211,693            214,164
    Property and equipment, net                      1,475              1,556
    Other assets                                        75                 75
       Total assets                               $213,243           $215,795

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable                                $596               $998
      Accrued development expense                    5,641              4,461
      Deferred program fee
       revenue - current portion                    26,200             26,200
      Accrued compensation and benefits                325                501
      Accrued income tax                             4,357                 --
      Other accrued liabilities                         84                187
        Total current liabilities                   37,203             32,347
    Non-current liabilities:
       Deferred program fee
        revenue - non-current portion              106,988            120,088
          Total liabilities                        144,191            152,435
    Stockholders' equity:
      Common stock                                      44                 44
      Additional paid-in-capital                   210,588            206,489
      Accumulated other comprehensive
       loss                                         (1,130)              (479)
      Accumulated deficit                         (140,450)          (142,694)
        Total stockholders' equity                  69,052             63,360
        Total liabilities and
         stockholders' equity                     $213,243           $215,795

    (2) Derived from audited financial statements.

SOURCE Pain Therapeutics, Inc.
08/09/2006
CONTACT: Christi Waarich, Senior Manager of Investor Relations, Pain
Therapeutics, Inc., +1-650-825-3324, or cwaarich@paintrials.com; or Media,
Carney Duntsch, Burns McClellan, +1-212-213-0006
Web site: http://www.paintrials.com
(PTIE)

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