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Epitope, Inc. Announces First Quarter Results

                     Sales Increase 40% Over Fiscal 1998

    BEAVERTON, Ore., Feb. 2 /PRNewswire/ -- Epitope, Inc. (Nasdaq: EPTO) today
reported its first quarter operating results for fiscal 1999.  Revenues for
the quarter ended December 31, 1998 were $2.2 million, compared to revenues of
$1.6 million for the prior year period.  Net loss for the first quarter was
$700,000, or $0.05 per share, compared to a net loss of $955,000, or $0.07 per
share, for the same period in fiscal year 1998.
    The company noted that first quarter revenues increased 40 percent over
the same period in the prior year.  Sales of Epitope's OraSure(R) device for
the quarter totaled $1.6 million compared to $1.1 million in the first quarter
of fiscal 1998.  OraSure sales increased in all major market segments.  In
addition, sales of the company's Western blot products were up 45 percent from
the prior year period to $666,000 in the most recent quarter.
    Cash and marketable securities balances ended the fiscal quarter at
$5.0 million, reflecting a cash usage for the quarter of $0.6 million.  In
addition, Epitope reported receipt of nearly $1.9 million in cash from the
exercise of common stock options in the month following the close of the
quarter, following a rise in Epitope's common stock price.
    Gross profit margin increased to 63 percent for the quarter, up from
59 percent in the prior year period.  The improvement was primarily
attributable to an increase in the margin on the OraSure oral fluid collection
device because of higher production volumes, and to a shift in the sales mix
to this higher margin product.
    John W. Morgan, President and CEO, commented, "The sales increase over
last year reflects the important growth of OraSure in the life insurance,
public health and international markets.  We are continuing to add to our
customer base and expand our business, while controlling cost and improving
gross margins."  Morgan continued, "Financially, Epitope is in a strong
position to continue execution of our growth and product development strategy.
We plan to continue investing in key new products like OraQuick to strengthen
the foundation of the company."

                           Condensed Financial Data

    In Thousands                                      Quarter ended Dec. 31
                                                      1998            1997
    Operating Results
    Revenues                                          $2,244         $1,604
    Operating costs and expenses                       3,003          2,654
    Other income, net                                     59             95
    Net loss                                            (700)          (955)
    Basic net loss per share                           (0.05)         (0.07)
    Diluted net loss per share                         (0.05)         (0.07)
    Shares used in per share calculations(A)          13,595         13,454

                                                     Dec. 31        Sept. 30
                                                       1998           1998
                                                   (Unaudited)      (Audited)
    Balance Sheet Data
    Cash and marketable securities                    $5,032         $5,619
    Working capital                                    6,040          6,510
    Total assets                                       9,648         10,357
    Shareholders' equity                               7,836          8,274

    (A) Basic and diluted per share amounts are the same due to losses.

    Epitope, Inc. is an Oregon-based corporation that develops and markets
medical devices and diagnostic products.  Its focus is on products that use
oral fluid in the detection of HIV infection, with emphasis in the life
insurance and public health markets, and on the use of oral fluid testing for
detection of drugs of abuse and other analytes.
    Statements in this press release about future sales levels or other future
events or performance are forward-looking statements.  The company's actual
results could be significantly different.  Factors that could affect results
include the extent of future use of oral fluid testing and OraSure in the
insurance industry or other key markets; loss or impairment of sources of
capital; ability of the company to develop product distribution channels;
ability of the company to develop new products; development of competing
products; changes in international, federal or state law or regulations;
uncertainties related to customers' and suppliers' ability to achieve year
2000 compliance; and loss of key personnel.  Although forward-looking
statements help to provide complete information about the company, readers
should keep in mind that forward-looking statements are much less reliable
than historical information.

Source: EPITOPE Inc.

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