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Epitope, Inc. Announces 5-Year Supply and Distribution Agreement With STC Technologies for Drugs-of-Abuse Product

    BEAVERTON, Ore., Nov. 17 /PRNewswire/ -- Epitope, Inc. (Nasdaq: EPTO)
announced today that it has signed a five-year supply and distribution
agreement with its research partner STC Technologies, Inc. (STC), a privately
held developer and marketer of clinical diagnostic tests.
    Under the terms of the agreement, Epitope's OraSure(R) oral specimen
collection device will be packaged for sale with STC's laboratory-based,
NIDA-5 drugs-of-abuse tests.  Epitope will act as the exclusive supplier of
its oral fluid collection device for use with STC's drugs-of-abuse tests in
the U.S. and Europe, excluding the U.K. and Ireland.  STC will act as the
exclusive distributor of the Orasure device for drugs-of-abuse testing in the
same territory.
    The agreement provides for Epitope to sell OraSure devices to STC for a
per-unit price.  Epitope will receive a percentage of STC's gross revenue from
the resale of OraSure devices and STC drugs-of-abuse test sales.  Epitope will
also be entitled to a percentage of STC's gross revenue from any future
related activities incorporating the use of OraSure.
    The agreement also covers any additional laboratory-based drugs-of-abuse
tests that STC may market, including those STC is now developing using
upconverting phosphor technology.  The agreement will remain in effect for a
minimum term of five years.
    Epitope and STC will participate jointly in marketing activities and
obtaining required international regulatory approvals.  The two companies plan
to begin evaluation of drugs-of-abuse testing products in selected test
markets in early 1999.  Feedback from these early users, along with the
results of additional laboratory testing, will help determine whether
modifications in the OraSure device or the STC tests might be needed for
optimal performance in the market.
    Epitope will continue to hold exclusive distribution rights in Japan for
STC's laboratory-based test for cotinine, a metabolite of nicotine, sold for
use in insurance risk assessment.  Epitope has the option to expand its
exclusive distribution rights for the cotinine test worldwide, excluding the
    Separately the company announced that the FDA is allowing STC to
distribute the PCP assay under "For Investigational Use Only" status in order
to generate data required for FDA review.  Clinical laboratories will be
allowed to purchase the OraSure device and STC tests to perform testing for
PCP under a study protocol.  Earlier this year, the FDA cleared oral fluid
assays for cocaine, methamphetamines, opiates, and cannabanoids (marijuana).
    Use of the OraSure oral fluid sample for drugs-of-abuse testing offers
many advantages over urine samples, which are currently used for most
drugs-of-abuse testing.  These include the ability to observe specimen
collection without embarrassment to the subject, and avoidance of the need for
specially prepared collection facilities necessary to prevent the adulteration
of urine samples.
    John W. Morgan, President and Chief Executive Officer of Epitope stated,
"We are pleased to announce this important agreement with STC on the
drugs-of-abuse platform test.  STC represents an ideal marketing partner since
they have built a strong foundation in this market, combining technical
expertise and solid distribution relationships both domestically and
internationally.  Our products will compete in the analytical portion of the
drugs-of-abuse testing market which was over $350 million, with 36 million
tests performed, in 1997.  Initially, STC will focus on the large
non-regulated employment testing market and is planning to conduct pilot
studies with several influential customers in that market."
    Mike Gausling, President and Chief Executive Officer of STC stated, "We
are excited about the collaboration with Epitope to offer a complete oral
fluid collection and detection system for the drugs-of-abuse testing market.
STC and Epitope have committed to make the investments needed for continual
development of our products to achieve the best results for our customers."
    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.
    STC Technologies, Inc. is a privately held company that develops and
markets proprietary clinical diagnostic tests for use in clinical labs,
physician's offices, and worksite testing.  Since its founding in 1987, STC
has twice been named to Inc. magazine's list of the 500 fastest growing,
privately held companies in America.
    Statements in this press release about future sales or other future events
or performance are forward-looking statements.  The Company's actual results
could be significantly different.  Some of the factors that could affect
results include the acceptance of oral fluid testing in the drugs-of-abuse
markets; the ability of STC and Epitope to develop distribution channels;
development of competing products; changes in international, federal or state
law or regulations; 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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