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ADA to Establish New Reimbursement Code for Oral Cancer Screening; Applicable to Zila's ViziLite and Potentially to OraTest.

Business Editors/Health/Medical Writers

PHOENIX--(BUSINESS WIRE)--June 2, 2004

Zila, Inc. (Nasdaq:ZILA) announced today that the Code Revision Committee of the American Dental Association (ADA) has approved a new dental reimbursement code for oral cancer screening products. Zila's ViziLite(R) product provided the pathway for the new code, and Zila anticipates that OraTest(R) will also satisfy the code requirements once its FDA clearance is obtained.

Zila said it recently received notice that the Committee approved a code for an "adjunctive pre-diagnostic test that aids in detection of mucosal abnormalities including pre-malignant and malignant lesions, not to include cytology or biopsy."

Douglas D. Burkett, Ph.D., Chairman, CEO and President of Zila, Inc., said, "The ADA Committee's action is further evidence that the dental profession recognizes the importance of early detection in the prevention and treatment of oral cancer."

Dr. Burkett continued, "There has never been such a reimbursement code available to dentists, because there has never been an FDA approved product for oral pre-cancer and early cancer identification -- until ViziLite. ViziLite's recent clinical efficacy data was cited as a factor in the Committee's decision."

"We are unaware of any available products, other than ViziLite, that will be covered under this new code. We expect that the code will encourage the use of ViziLite, and we anticipate that this reimbursement code will be available for OraTest when its regulatory approval is achieved."

Zila envisions ViziLite and OraTest to be synergistic products that provide a means for all adults to benefit from improved identification of oral pre-cancers and early cancers, and possibly prevent the disease through early intervention. ViziLite is currently being sold to dental offices nationally and OraTest is in phase III clinical trials as part of the FDA approval process.

The ADA-administered Code on Dental Procedures and Nomenclature supports accurate recording and reporting of dental treatments. The codes can be used to report dental procedures provided under public and private dental insurance benefit plans. Obtaining insurance reimbursement from specific carriers is a separate process. Zila is now engaged in this process for the ViziLite product.

The Code Revision Committee is balanced to include representatives from the dental profession and third-party payers. It receives regular requests for code revisions, reflecting the dynamic changes in dentistry. Each request receives structured and rigorous evaluation before it can become part of the code, which is the national standard for reporting dental procedures electronically under the Health Insurance Portability and Accountability Act of 1996. The new code will be published in the next version of the Code on Dental Procedures and Nomenclature (the Code) and will be effective on January 1, 2005.

About Zila

Zila, Inc., headquartered in Phoenix, is an innovator in preventative healthcare technologies and products, focusing on enhanced body defense and the detection of pre-disease states. Zila has three business units:

-- Zila Biotechnology, a research, development and licensing

business specializing in pre-cancer/cancer detection through

its patented Zila(R) Tolonium Chloride and OraTest(R)

technologies.

-- Zila Nutraceuticals, manufacturer and marketer of Ester-C(R)

and Ester E(TM), branded, highly effective forms of vitamin C

and E for Whole Body Protection.

-- Zila Pharmaceuticals, marketer of superior products to promote

oral health and prevent oral disease, including ViziLite(R)

oral examination kits, Peridex(R) prescription periodontal

rinse and Zilactin(R) OTC oral care products.

For more information about Zila, visit www.zila.com.

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based largely on Zila's expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the Company's control. Therefore, actual results could differ materially from the forward-looking statements contained herein. A wide variety of factors could cause or contribute to such differences and could adversely impact Zila's revenues, profitability, cash flows and capital needs. There can be no assurances regarding the ultimate market acceptance of the ViziLite product or in our ability to secure insurance reimbursement for ViziLite. Further, there can be no assurances regarding the FDA's ultimate decision regarding the OraTest product; the limitations on the indicated uses for the OraTest product; our ability to successfully commercialize such product; the ultimate market reception for the OraTest product; and our ability to secure insurance reimbursement for it. There can be no assurance that the forward-looking statements contained in this press release will, in fact, transpire or prove to be accurate. For a more detailed description of these risks and other cautionary factors that may affect Zila's future results, please refer to Zila's Form 10-K for its fiscal year ended July 31, 2003 and its Form 10-Q for the quarter ended January 31, 2004, filed with the Securities and Exchange Commission.
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Geographic Code:1USA
Date:Jun 2, 2004
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