Breast Cancer Products Receive New Technology Pass-through Reimbursement; Reimbursement Code for SenoRx Inc. Products Established.

Business Editors/Health/Medical Writers

IRVINE, Calif.--(BUSINESS WIRE)--Nov. 25, 2003

SenoRx Inc., a Breast Cancer Interventional Medical Device Company, is pleased to announce that the Centers for Medicare and Medicaid Services have created a Transitional Device Pass-through Reimbursement Code for its Tissue Localization Excision Medical device products. This new code, C1819 -- Tissue Localization and Excision Device, will be effective Jan. 1, 2004. The SenoRx Anchor Guide(R) Device is an example of a medical device that is represented by this new C-code.

Lloyd H. Malchow, president and CEO of SenoRx Inc., commented, "We believe that the agency's action is a significant step forward for breast cancer patients, as healthcare institutions are now able to "pass-through" the costs associated with new breast cancer technologies, such as the Anchor Guide(R)."

Dr. Mark Gittleman, director of Breast Care Specialists in Allentown, Pa., a former president of the American Society of Breast Surgeons (The Society) and a current governor of the American College of Surgeons commented that "The Tissue Localization and Excision device is a significant advancement in helping patients achieve negative margins following surgery. A prospective randomized clinical study at 12 leading breast centers concluded that patients who received the device had zero positive margins as compared to 16% for the control group. Using a more conservative definition of positive margins (defined as less than 1mm or the need for re-excision (follow-up surgery), 10% of the treatment group (3/30) patients required secondary surgery as compared to 30% (11/37) in the control group. This means that two out of ten patients will not require a second trip to the operating room to obtain clear margins when the Tissue Localization and Excision device is used."

Section 1833 (T) (6) of the Social Security Act provides for temporary additional payments or "transitional pass-through payments for certain medical devices, drugs and biological agents. Transitional pass-through payments to healthcare institutions were established for certain "new" medical devices, drugs and biological agents which were not being paid for as a hospital out-patient service as of Dec. 31, 1996 and whose cost is "not insignificant" in relation to the Outpatient Prospective Payment System (OPPS) payments for the procedures or services associated with the new technology.

Commenting further, Dr. Mark Gittleman said, "On behalf of surgeons and their patients, we would like to thank the Centers for Medicare and Medicaid Services, particularly the Division of Out-Patient Care in the Center for Medicare Management, for their diligent review of the request for new technology reimbursement pass-through status and for their creation of a new reimbursement pass-through category for these new breast cancer technologies."

SenoRx Inc. has recently launched five interventional device products for the diagnosis and/or treatment of Breast Cancer. SenoRx markets products in sixteen countries worldwide.

SenoRx Inc. is an early commercial stage company, which develops and markets novel, proprietary, less invasive diagnostic and surgical devices to Breast Care Clinicians, including Radiologist and Surgeons.

The company is developing a broad line of interventional medical devices to address the full spectrum of clinical needs related to the successful treatment and diagnosis of breast cancer. The company has successfully raised 3 rounds of venture capital from investors, which include CIT Ventures, De Novo Ventures, Domain Associates, Mayfield Fund, Medicus Venture Partners and MPM Capital.