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Epitope Announces Second Quarter Operating Results

    BEAVERTON, Ore., April 24 /PRNewswire/ -- Epitope, Inc. (Nasdaq: EPTO)
today reported its fiscal 1998 second quarter operating results.  Revenues
from continuing operations for the quarter ending March 31, 1998 were
$2.1 million, as compared to revenues from continuing operations of
$2.3 million for the comparable period in 1997.  The Company reported a net
loss from continuing operations of $734,000 for the quarter, or $0.05 per
share, compared with a net loss from continuing operations of $964,000, or
$0.07 a share, in the second quarter of fiscal year 1997.  For the six-month
period ended March 31, 1998, the Company incurred a loss from continuing
operations of $1.7 million ($.13 per share) on revenues of $3.7 million as
compared to a loss of $1.3 million ($.09 per share) on revenues of
$5.0 million for the six-month period ended March 31, 1997.
    Operating results for fiscal 1998 were not affected by discontinued
operations of Agritope, Inc, which was spun off to shareholders in December
1997.  The costs of the spin-off and Agritope's operating losses through the
spin-off date were accounted for in fiscal year 1997.  The loss from
discontinued operations in the comparable quarter and six months in
1997, including the former subsidiary Andrew and Williamson Sales Co., was
$9.2 million and $13.3 million respectively.
    Sales of Epitope's OraSure(R) device for the quarter and six months ended
March 31, 1998 totaled $1.6 million and $2.8 million respectively, compared to
$1.7 million and $3.6 million in the same periods of fiscal 1997.  OraSure
sales for the 1998 periods reflected a reduction in inventories by major
testing laboratories which, as previously reported, had built up inventory
during fiscal 1997 as insurance companies made initial decisions about
adoption of OraSure and expansion of use beyond pilot programs.  The inventory
levels are expected to be in line with current customer requirements by the
third quarter of 1998.  Sales of the OraSure device in the third fiscal
quarter are expected to reach at least the levels of the second quarter.
Because of the many smaller customers in the public health market who do not
have a contractual arrangement with the Company, the expectations for future
sales are based on forecasts by individual customer rather than by firm
orders.
    "The insurance testing labs continue to report a strong increase in the
number of OraSure samples being tested on a daily basis, and they expect this
upward trend to continue," said John W. Morgan, President and Chief Executive
Officer of Epitope.  "In addition, the public health market has shown
consistent sales growth and is expected to continue this upward trend with new
product offerings recently introduced by Epitope."
    Sales of the Company's Western blot HIV confirmatory test increased
slightly in the current quarter and six-month period as compared to the same
periods in fiscal 1997.  As of March 31, 1998, the Company had firm orders for
the confirmatory HIV test totaling approximately $600,000 scheduled for
shipment before June 30, 1998.
    Development contract revenue was $11,000 in the first six months of fiscal
1998, compared to $465,000 in the same period of fiscal 1997.  Development
contract revenue for the 1997 period consisted of work being performed by
Epitope for SmithKline Beecham plc under an agreement that was discontinued in
July 1997.
    A tabulation of operating highlights and balance sheet data follows (in
thousands, except per share data):

                                           Three Months Ended   Six Months Ended
                                               (unaudited)        (unaudited)
                                            3/31/98   3/31/97  3/31/98   3/31/97
    Operating Highlights:
    Revenues (continuing operations)         $2,103    $2,336   $3,706    $4,977
    Net loss from continuing operations       (734)     (964)  (1,689)   (1,255)
    Net loss                                  (734)  (10,166)  (1,689)  (14,551)
    Per share:
    Income (loss) from continuing operations $(.05)    $(.07)   $(.13)    $(.09)
    Net income (loss)                        $(.05)    $(.74)   $(.13)   $(1.08)

    Selected Balance Sheet Data:           3/31/98        9/30/97
                                                 (unaudited)

    Cash and marketable securities          $6,013         $9,076
    Working capital                          6,617          9,538
    Shareholders' equity                     8,187         15,014

    Epitope, Inc. is an Oregon corporation that develops and markets medical
diagnostic products.  Its principal products, including the OraSure oral
specimen collection device, focus on the use of oral fluid to detect HIV
infection and other conditions, and are marketed primarily in the life
insurance and public health sectors.
    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 quite different.  Factors that could affect results include
the extent of future use of oral testing and OraSure in the insurance
industry; ability of the company to develop product distribution channels;
development of competing products; changes in 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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