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Epitope Adopts Plan to Spin Off Agricultural Unit;
Re-acquires Marketing Rights from SmithKline Beecham
    BEAVERTON, Ore., July 28 /PRNewswire/ -- Epitope, Inc. (Nasdaq: EPTO)
announced today that it will spin off its Agritope agricultural biotechnology
unit.
    The company also announced that it will re-acquire all rights from
SmithKline Beecham (SB) to its patented oral fluid diagnostics technology,
currently marketed by SB as the OraSure(R) oral specimen HIV-1 testing system.

    Agritope Spinoff
    The Agritope spinoff plan results from the Board's 1996 decision to make
changes in corporate structure to allow investors and management to focus
separately on the agricultural and medical products business units of the
company.  In November 1996, the Board proposed creating separate classes of
Epitope, Inc. common stock.  After the Board withdrew that proposal and asked
management to further evaluate alternatives, management recommended a spinoff
of Agritope.  The board of directors approved the recommendation at a special
meeting on July 26, 1997.
    "We believe that the spinoff is the best format to meet our strategic
objective of building shareholder value by providing management of each unit
with the ability to concentrate on developing a single business without
distraction from the other unit.  It will also permit investors to make
decisions based on the performance of each of our business units," said Roger
L. Pringle, chairman of the board of Epitope.  "As we announced in June,
Adolph J. Ferro, Ph.D., will serve as president and chief executive officer of
Agritope."
    The spinoff will be structured to allow Epitope shareholders to retain a
stake in the growth potential of Agritope, while providing a mechanism to
separate the businesses.  The spinoff plan contemplates obtaining capital from
investors and strategic partners to support Agritope's operation as a separate
business.  Completion of the spinoff is subject to reaching agreement with
investors and receiving required regulatory approval.

    Re-acquisition of Marketing Rights
    The company will re-acquire oral diagnostic rights from SB as a result of
SB's decision to discontinue the pursuit of a plan to develop and market
over-the-counter products for disease detection.  During a transition period,
SB will continue to market OraSure to the medical community.  Thereafter,
OraSure will be marketed through distribution channels established by Epitope,
which currently manufactures the product.
    "SB has done an excellent job of developing markets and brand recognition
for OraSure," said W. Charles Armstrong, interim president and chief executive
officer of Epitope, Inc.  "The change will give us an opportunity to
capitalize on these efforts by marketing OraSure directly or through other
partners.  We feel that this decision will provide Epitope with the
flexibility to focus our sales and development efforts on markets with the
most immediate sales potential, while considering a variety of opportunities
arising from the re-acquisition of the oral technology."
    According to Donna J. Sturgess, director of diagnostic products for SB
Consumer Healthcare, "OraSure has been widely accepted by public health
departments, major HIV testing sites and private physicians around the
country.  Despite our change in strategy, we believe in the importance of the
technology.  We are confident that OraSure will continue to play an important
role in the future of HIV testing as it is a highly effective way to test for
HIV without needles, lancets or blood."
    Epitope, Inc. is a biotechnology company that develops and markets medical
diagnostic products through its Epitope Medical Products group.  Its Agritope
group is focused on the development and commercialization of novel
agricultural products using plant genetic engineering and other modern
methods.

Source: EPITOPE Inc.


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