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Epitope Announces Third Quarter Operating Results

    BEAVERTON, Ore., Aug. 14 /PRNewswire/ -- Epitope, Inc. (Nasdaq: EPTO)
today reported its third quarter operating results for fiscal 1997.  Revenues
for the quarter ended June 30, 1997 and first nine months of fiscal 1997 were
$3.3 million and $8.5 million, respectively, as compared to revenues of
$1.3 million and $4.1 million, respectively, for the comparable periods in
1996.  The Company reported a net loss of $2.3 million for the third quarter,
or $0.17 a share, compared with a net profit of $3.5 million (including a
one-time license fee of $5.0 million), or $0.25 a share, in the third quarter
of fiscal 1996.  For the nine months ended June 30, 1997, the company reported
a net loss of $16.9 million (including a loss of $8.2 million from
discontinued operations), or $1.25 per share, as compared to a profit of
$30 thousand for the first nine months of fiscal 1996.

    Epitope Medical Products
    Epitope Medical Products (EMP) recorded a net loss of $1.0 million on
revenues of $2.9 million in the third quarter of fiscal 1997, as compared to a
profit of $3.9 million (including a one-time license fee of $5.0 million) on
revenues of $1.1 million in the quarter ended June 30, 1996.  Product sales
were $2.5 million, as compared to $1.1 million in the third quarter of fiscal
1996, primarily due to increased purchases of the EpiScreen(TM) oral specimen
collection device by the company's distributors for the life insurance testing
market plus increased sales in the public health market.  Several distributors
have recently advised the company that they intend to reduce inventory levels
in the fourth quarter of 1997.  Accordingly, the company anticipates that
fourth quarter sales of the device will be significantly below those for the
current quarter.
    The company recently announced that it has regained marketing rights to
its OraSure(R) oral diagnostics product line from SmithKline Beecham (SB) as a
result of SB's decision to discontinue pursuit of a plan to develop and market
over-the-counter products for disease detection.  In connection with the
termination of the contract, SB agreed to purchase approximately 200,000
shares of common stock of the company at the closing market price on July 25,
1997.
    "Our 2-1/2 year relationship with SB has resulted in wide acceptance of
OraSure by public health departments, major HIV testing sites and private
physicians.  At the same time, our in-house sales force has made significant
progress in gaining adoption of our related EpiScreen testing system by
insurance underwriters," said W. Charles Armstrong, president and chief
executive officer.  "The SB decision to invest in Epitope not only shows
confidence in our future prospects, but provides funding for continued
marketing and development of the product line."

    Agritope
    Agritope incurred a loss of $1.3 million in the current quarter as
compared to a loss of $0.4 million in the third quarter of fiscal 1996.  For
the nine months ended June 30, 1997, Agritope reported a loss of $14.5 million
as compared to a loss of $1.5 million in the first nine months of fiscal 1996.
Nine month results include a loss of $0.8 million related to Vinifera, which
was not a part of the Agritope group in 1996; a second quarter charge of
$8.2 million related to discontinued operations; and two non-recurring first
quarter charges totaling $3.1 million.
    A tabulation of operating highlights and balance sheet data follows (in
thousands, except per share data):

                            Three Months Ended           Nine Months Ended
                           6/30/97       6/30/96      6/30/97       6/30/96
    Operating Highlights:
    Epitope Medical Products
    Revenues                $2,884        $1,107       $7,860        $3,539
    Loss from operations   (1,121)       (1,400)      (2,969)       (4,298)
    Net income (loss) from
     continuing operations   (991)         3,945      (2,401)       (1,490)
    Net income (loss)        (991)         3,945      (2,401)       (1,490)
    Agritope
    Revenues                  $416          $165         $668          $514
    Loss from operations   (1,337)         (525)      (3,395)       (1,541)
    Loss from continuing
     operations            (1,323)         (446)      (6,257)       (1,460)
    Net loss               (1,323)         (446)     (14,464)       (1,460)
    Epitope, Inc. and
     Subsidiaries
    Revenues                $3,299        $1,272       $8,528        $4,053
    Loss from operations   (2,458)       (1,925)      (6,364)       (5,839)
    Loss from continuing
     operations            (2,314)         3,500      (8,658)            30
    Net loss               (2,314)         3,500     (16,864)            30
    Per share:
    Net income (loss) from
     continuing operations  $(.17)          $.25       $(.64)          $ --
    Net income (loss)       $(.17)          $.25      $(1.25)          $ --

    Selected Balance Sheet Data:
    Epitope, Inc. and
     Subsidiaries                 6/30/97                 9/30/96
    Cash and marketable
     securities                   $11,206                 $24,517
    Working capital                12,530                  21,630
    Shareholders' equity           18,822                  27,967

    Epitope, Inc. is an Oregon corporation utilizing biotechnology to develop
and market medical diagnostic products through its Epitope Medical Products
group and superior new plants and related products through its Agritope group.

Source: EPITOPE Inc.


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