New York, NY, April 28, 1999 -- SmallCaps Online LLC reiterated its BUY recommendation today on Cypress Bioscience, Inc. (Nasdaq: CYPB) following several recent announcements by CYPB.

Excerpts from the report follow:

Over the past ten days, CYPB has made two significant announcements that we believe position the Company’s stock for further upward movement. The two events, the sale of the manufacturing facility and the exercise of warrants (discussed in detail below) resulted in proceeds of approximately $10.4 million to the Company. From a financial perspective, we believe these events put CYPB on a more solid financial footing. But more importantly, we believe the early exercise of the purchase option reflects Fresenius’ positive view of the prospects for the Prosorba column within the rheumatoid arthritis (RA) market. CYPB management also believes that Fresenius’ ownership of the facility will accelerate the manufacturing scale-up, facilitate the ramp-up in marketing, and shorten the timeframe for CYPB to reach profitability. We reiterate our BUY recommendation for investors tolerant of risks associated with small-cap investments.

April 27^th Announcement: CYPB announced that Fresenius AG, its global partner in the manufacturing and marketing of the Prosorba column, had exercised an option to purchase the Prosorba manufacturing facilities from CYPB. The option was granted earlier this year as part of the partnering agreements between the two companies, and was exercisable until the end of 2000. Total proceeds to CYPB, a portion of which was previously drawn down in the form of an interest-free line of credit, was approximately $5.2 million. We believe the early exercise of this option by Fresenius is a very positive development for CYPB, as it reflects Fresenius’ positive views on the prospects for the Prosorba column in the RA market, should accelerate manufacturing and marketing activities, and could result in a shortened timeframe to profitability for CYPB.

April 21^st Announcement: CYPB announced that approximately 2.6 million outstanding publicly traded warrants had been exercised, resulting in proceeds to CYPB of approximately $5.2 million. Approximately 200,000 warrants that were not exercised were redeemed by CYPB at ten cents per warrant on April 19, 1999. Again, we feel this is a very positive development for CYPB. It not only provides additional capital to support the commercialization ramp-up of Prosorba, but also provides additional financial flexibility with respect to other development programs and/or financing plans.

SmallCaps Online LLC is a registered investment advisor (NY State) focused on identifying emerging growth companies in the healthcare and information technology sectors that offer compelling investment opportunities over the long term. By providing comprehensive financial services, including corporate finance, M&A advisory, strategic partnering and communications consulting, the company positions itself to provide a fully integrated package of value-added services to emerging growth companies.

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