Biomune Systems, Inc. Reports Third Quarter Results; Company Significantly Narrows Loss.

SALT LAKE CITY--(BUSINESS WIRE)--Aug. 20, 1998--Biomune Systems, Inc. (NASDAQ: BIME) today reported results for its third quarter ending June 30, 1998. For the quarter, the Company reported revenue of $1,372,751 and a net loss of $124,324 or $.02 per share.

This compares to revenue of $103,804 and a net loss of $1,451,103 or $.67 per share reported for the same period one year ago. If amortization is removed from consideration, the Company achieved a small profit from operations of approximately $14,000. For the nine months ended June 30, 1998, Biomune reported revenue of $1,443,520 and a net loss of $2,068,136 or $.39 per share as compared to revenue of $305,137 and a net loss of $5,419,919 or $2.57 per share reported for the period one year ago.

Michael G. Acton, President and Chief Executive Officer of Biomune Systems, Inc. said: "The increase in revenue and decrease in the Company's net loss for the quarter is primarily attributed to the acquisition of Rockwood International. Overall, the gross margin for the quarter in 1998 was 45 percent of revenue, as compared to 36 percent for the comparable quarter in 1997. Again, this improvement can be attributed to the 52 percent ownership of Rockwood by Biomune Systems.

"We believe that Biomune has made significant overall improvement and is positioned to become profitable in the near future," Acton added. In recent weeks, the company has strengthened the management of its Optim Nutrition subsidiary with the addition of Randy Ohlsen as president; announced distribution of its Optimue(TM) nutritional supplement in Whole Foods Supermarkets; and announced the signing by Rockwood of a five-year agreement with a major wholesaler and beauty aid distributor to develop, manufacture and market "Aroma Gardens," a line of health and beauty products with an initial order for more than $1 million in 1998.

Biomune Systems, Inc. is a biopharmaceutical research and development company that began researching the various applications of its patented whey protein (Biomune Whey Protein Technology) in immune-compromised individuals and cancer research. Biomune Systems, Inc.'s wholly-owned subsidiary, Optim Nutrition, Inc. is engaged in manufacturing, new product development and marketing of nutraceutical, functional foods and dietary supplements. Biomune's majority-owned subsidiary, Rockwood Companies, is a provider of quality health, beauty and cosmetic aids, creating and producing products and marketing them through chain stores and mass merchandisers utilizing celebrity spokepersons. In addition, Rockwood manufactures a number of private label products for major chains in the U.S.

This press release contains certain forward-looking statements about the Company's goals and anticipated future performance, including anticipated revenue and profitability. The industry in which the Company operates is dynamic and intensely competitive and there are many factors beyond the Company's control that could cause the forward-looking statements contained herein not to occur or the timing of their occurrence to be delayed. With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve substantial risks and uncertainties, including, but not limited to, the results of ongoing studies and trials, economic conditions, product and technology development, production efficiencies, product demand, competitive products and the competitive environment, availability of raw materials and critical manufacturing equipment and facilities, profitability and future sales volume, marketing and acceptance of product lines, and other risks identified in filings made with the Securities and Exchange Commission. -0-

                                    For The Quarter Ending June 30

                                          1998               1997

Revenues                            $1,372,751           $103,804
Net Loss                               (87,573)        (1,347,208)
Preferred Stock Dividends              (36,752)          (103,895)
Net Loss Per Share
 Fully Diluted                           (0.02)             (0.60)
Weighted Average Common
 Shares Outstanding                  5,491,560          2,152,914


                                  For The Nine Months Ending June 30

                                          1998               1997

Revenues                            $1,443,520           $305,137
Net Loss                            (1,942,315)        (4,376,721)
Preferred Stock Dividends             (125,821)        (1,043,198)
Net Loss Per Share
 Fully Diluted                           (0.39)             (2.57)
Weighted Average Common
 Shares Outstanding                  5,253,475          2,112,055

CONTACT: Martin E. Janis & Company Inc.

Bev Jedynak, 312/943-1100