November 1, 2002

LSR ANNOUNCES THIRD QUARTER RESULTS

East Millstone, New Jersey, November 1, 2002 – Life Sciences Research, Inc. (OTCBB:LSRI) announced today that revenues for the quarter ended September 30, 2002 were $30.0 million, 16.5% above the revenues for the same period in the prior year of $25.7 million.  The Company reported net income for the quarter ended September 30, 2002 of $1.5 million, compared with $0.1 million for the quarter ended September 30, 2001.   Net income per common share for the quarter ended September 30, 2002 was $0.13 compared with $0.09 in the quarter ended September 30, 2001.  Net income included non-cash foreign exchange transaction gains on the conversion of the Company’s dollar denominated bonds into UK pound sterling of $1.6 million compared to $2.2 million in the same period last year. Excluding the foreign exchange transaction gains, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) was $3.7 million for the third quarter, or 12.3% of revenues, compared with $1.6 million, or 6.4% of revenues, for the same period in the prior year.

Revenues for the nine months ended September 30, 2002 were $84.7 million, which were 16.9% above the revenues for the same period in the prior year of $72.4 million.  The Company reported net income for the nine months ended September 30, 2002 of $1.1 million compared with a net loss of $6.0 million in the nine months ended September 30, 2001.  Net income per common share for the nine months ended September 30, 2002 was $0.11 compared with a loss of $1.02 in the nine months ended September 30, 2001.  Net income included non-cash foreign exchange transactions gains on the conversion of the Company's dollar denominated bonds into UK pound sterling of $3.9 million compared to a $0.8 million foreign exchange transaction loss in the same period last year.  Excluding the foreign exchange transaction gain/loss, EBITDA was $7.3 million for the first nine months of the year, or 8.6% of revenues, compared with $3.0 million, or 4.1% of revenues, for the same period in the prior year.

Brian Cass, LSR's President and Managing Director said "Our third quarter operating results reflect continued and meaningful progress on each of our key measures.  Top line growth in both the US and the UK has been very solid, both sequentially and compared with last year.  Another excellent quarter for new orders means we are now some 20% ahead on a year to date basis resulting in a record backlog of $85 million."

Mr. Cass continued, "We remain focused on operating profits and cash generation, both of which are showing solid progress.  Operating profit is the highest level in over five years, and this has driven positive cash flow from operations for the second quarter in a row.  Furthermore, we've made significant progress in reducing working capital levels during 2002. These two things together have helped us achieve an increase in our cash position and a decrease in our debt since the beginning of the year."

Andrew Baker, LSR's Chairman and CEO, added "This is an exciting time for LSR, not just because of the improving operating results that Brian and his team are achieving, but also because of the encouraging prospects for our whole industry sector.  Our excellent order growth this year is indicative of the strong market demand for drug discovery services which is also reflected in the interest shown by investors in the Contract Research sector.  Now that our stock is trading exclusively on the US market we look forward to benefiting from this very positive environment of support and understanding." 

Life Sciences Research, Inc. is a global Contract Research Organization providing product development services to the pharmaceutical, agrochemical and biotechnology industries.  LSR brings leading technology and capability to support its clients in non-clinical safety testing of new compounds in early stage development and assessment.  The purpose of this work is to identify risks to humans, animals or the environment resulting from the use or manufacture of a wide range of chemicals which are essential components of LSR's clients' products.  The Company's services are designed to meet the regulatory requirements of governments around the world.  LSR operates research facilities in the United States (the Princeton Research Center, New Jersey) and the United Kingdom (Huntingdon and Eye, England).

This announcement contains statements that may be forward-looking as defined by the USA’s Private Securities Litigation Reform Act of 1995.  These statements are based largely on LSR’s expectations and are subject to a number of risks and uncertainties, certain of which are beyond LSR’s control, as more fully described in LSR’s Registration Statement on Form S-1, dated July 12, 2002, and the Company’s Form 10-K for the fiscal year ended December 31, 2001, each as filed with the US Securities and Exchange Commission.

– tables to follow –

Unaudited

(Dollars in thousands, except per share data)

2002

2001

2002

2001

Net revenues

29,951

25,707

84,676

72,408

Cost of revenue

(24,122)

(21,648)

(68,887)

(63,017)

Gross profit

5,829

4,059

15,789

9,391

Selling, general and administrative expenses

(4,538)

(3,786)

(13,165)

(11,970)

Operating income/(loss)

1,291

273

2,624

(2,579)

Interest income

20

14

53

89

Interest expense

(1,522)

(1,621)

(4,672)

(4,905)

Foreign exchange transaction gain/(loss) on capital bonds

1,573

2,164

3,858

(815)

Other (expense)/income

174

(1,078)

(1,494)

(521)

Income/(loss) before income taxes

1,536

(248)

369

(8,731)

Income tax (expense)/ benefit

(34)

300

734

2,775

Net income/(loss)

1,502

52

1,103

(5,956)

Income/(loss) per common share

- Basic

0.13

0.09

0.11

(1.02)

- Diluted

0.12

0.09

0.10

(1.02)

Weighted average common shares outstanding

- Basic     (000's)

11,932

5,870

10,256

5,868

- Diluted  (000's)

12,224

5,870

10,642

5,868

Life Sciences Research Inc.

Balance Sheet

(Dollars in thousands)

September 30,

December 31,

2002

2001

ASSETS

Current assets:

Cash and cash equivalents

7,376

2,240

Accounts receivable, net of allowance of $62 and $150 in
    2002 and 2001 respectively

21,361

18,257

Unbilled receivables

9,628

13,920

Inventories

1,358

1,275

Prepaid expenses and other current assets

4,437

2,777

Deferred income taxes

-

73

Total current assets

44,160

38,542

Property and equipment, net

93,217

90,353

Investments

236

202

Unamortized capital bonds issue costs

621

691

Deferred income taxes

5,004

4,176

Total assets

143,238

133,964

LIABILITIES AND SHAREHOLDERS' EQUITY/(DEFICIT)

Current liabilities:

Accounts payable

8,928

9,899

Accrued payroll and other benefits

1,512

2,323

Accrued expenses and other liabilities

7,278

10,336

Fees invoiced in advance

23,755

17,722

Short-term debt

1,723

158

Total current liabilities

43,196

40,438

Long-term debt

85,151

59,302

Related party loans

552

28,821

Other long-term liabilities

-

174

Deferred income taxes

10,310

9,953

Total liabilities

139,209

138,688

Commitments and contingencies

-

-

Shareholders' equity/(deficit)

Voting Common Stock, $0.01 par value

Authorized: 50,000,000

Issued and outstanding at September 30, 2002: 11,932,338 (December 31, 2001: 5,870,305)

114

59

Non-Voting Common Stock, $0.01 par value

Authorized: 5,000,000

Issued and outstanding None

-

-

Preferred Stock, $0.01 par value

Authorized: 5,000,000

Issued and outstanding: None

-

-

Paid in capital

74,312

66,035

Foreign currency translation adjustments

(5,042)

(4,360)

Accumulated deficit

(65,355)

(66,458)

Total shareholders' equity /(deficit)

4,029

(4,724)

Total liabilities and shareholders' equity

143,238

133,964