Calypte Reports Second Quarter Results.

Business/Medical Editors

ALAMEDA, Calif.--(BUSINESS WIRE)--August 9, 2000

Calypte Biomedical Corporation (Nasdaq:CALY) announced today its second quarter results for the period ending June 30, 2000.

Revenues for the three months ended June 30, 2000 were $787,000 compared to $914,000 for the three months ended June 30, 1999. Revenues for the six months ended June 30, 2000 were $1,885,000 compared to $1,748,000 for the six months ended June 30, 1999. The net loss attributable to common stockholders for the second quarter of 2000 was $3.2 million, or a net loss attributable to common stockholders of $0.13 per share, compared with a net loss attributable to common stockholders of $2.3 million, or a net loss attributable to common stockholders of $0.11 per share for the second quarter of 1999.

The decrease in revenues for the second quarter of 2000 is attributable to reduced sales of Calypte's urine-based screening EIA and supplemental Western Blot tests to insurance companies. The reduction in sales to the insurance market is not a result of the loss of accounts, since the Company added four new insurance customers in the second quarter. Rather, the reduction can be attributed to a temporary decrease in demand for Calypte's products resulting from the effects of so-called "Triple X" legislation. Effective at the start of this year, "Triple X" legislation imposed certain new fiscal restrictions on insurance carriers who were offering 30-year policies. Since many carriers decided to discontinue these policies altogether as a result of the legislation, there was an unusually high rate of activity involving testing of applicants for these policies in the fourth quarter of 1999 and the first quarter of 2000. That demand dissipated in the second quarter of 2000. Additionally, the Company's rate of growth was slowed by several large insurance accounts whose Y2K-related computer programming backlogs prevented their conversion to urine-based applicant screening.

Increased SG&A expense this quarter was attributable to a comprehensive marketing campaign designed to improve the visibility of the urine-based HIV test within the media, public health and financial communities, and to the aggressive product marketing effort launched in support of the Sentinel(TM) testing service.

During the second quarter, Calypte achieved a number of important milestones in building a platform for growth and expanding product reach, particularly in the international marketplace. The Company entered into exclusive distribution agreements with Biobras S.A. of Brazil to distribute its HIV urine-based testing products throughout Brazil, as well as with American Edge Medical Company to distribute its testing products in South Africa. Following discussions at the 13th International AIDS Conference in Durban, South Africa, Calypte extended its agreement with American Edge Medical to expand its distribution territory throughout all of Sub-Saharan Africa, as announced in a press release earlier today. During the quarter Calypte also announced a partnership with the Chinese National Center for AIDS Prevention and Control (NCAIDS), through Beijing HuaAi Science and Technology Development Co. Ltd., to distribute the first HIV-1 antibody urine test within the People's Republic of China.

On the domestic front, Calypte announced its Sentinel(TM) service, the nation's first and only urine-based testing service dedicated exclusively to the detection of exposure to HIV-1, chlamydia and gonorrhea sexually transmitted diseases. In conjunction with an aggressive marketing campaign, in May the Company launched the Sentinel(TM) website -- www.sentineltestservice.com -- that enables medical professionals and authorized institutions to order tests directly over the Internet, and sales training began in June. During the quarter, Calypte also advanced its corporate awareness and communications campaign by launching its new corporate website, introducing a new corporate logo, participating as a contributing sponsor of National HIV Testing Day and World AIDS Day 2000. The Company also developed comprehensive government relations, public relations and investor relations strategies designed to generate awareness of Calypte's products among consumers, physicians and government organizations.

Nancy Katz, President, Chief Executive Officer and Chief Financial Officer of Calypte, said, "We are extremely disappointed with our financial results for the second quarter. Overall sales to insurance companies did not meet our expectations, and although we see strong interest in our Sentinel(TM) testing service, it did not generate the immediate demand at launch that we had anticipated. However, we took great strides in increasing overall awareness and gaining acceptance for our urine-based HIV testing products, and laying the groundwork for expansion into new markets, particularly overseas. This quarter, we put a lot of our energy into aggressively promoting the overall awareness of our products as a safer, more cost effective alternative to traditional blood testing methods. These efforts impacted bottom line expansion for the short term, but we believe that the goals we achieved this quarter will greatly enhance our ability to grow our top line in the future."

Ms. Katz added, "This quarter alone we signed distribution agreements with China, Brazil and South Africa, which we are now extending into all of Sub-Saharan Africa. We are especially encouraged by the strong appeal of our testing service in the international marketplace and we will continue to carefully pursue international opportunities that make strategic sense for us.

"On the domestic front, we are making steady inroads within the insurance marketplace. This past quarter, UNUMProvident, New York Life Insurance Company and others told us that they expect to begin underwriting using urine testing for HIV within the next few quarters. In conjunction with our Sentinel(TM) launch in June, we initiated a telemarketing and direct mail effort to enhance Sentinel(TM)'s visibility to HIV-related testing sites, and we believe there is significant interest in the service."

Ms. Katz concluded, "I am extremely optimistic about the Company's future. During the second half of 2000, we expect to see accelerated growth due to new insurance customers. We have received our first order from our South African distributor, which will ship during the third quarter; and we expect to begin shipments to China in the fourth quarter. We are hopeful that we will receive FDA approval for our Alameda manufacturing facility in the third quarter. That approval and the closure of our Berkeley facility will help us to reduce overhead and improve overall efficiency. We are also exploring new product initiatives, including a second EIA and a urine-based rapid test, both of which will be targeted toward the international marketplace."

Calypte Biomedical Corporation (NASDAQ:CALY) is a health care company dedicated to the development and commercialization of urine-based diagnostic products and services for Human Immunodeficiency Virus Type 1 (HIV-1), sexually transmitted diseases and other chronic illnesses. Carter-Wallace (NYSE:CAR) has the exclusive U.S. sales and marketing rights for Calypte's HIV products in the hospital, public health and reference lab markets. Calypte's tests include the screening EIA and supplemental Western blot tests, the only two FDA-licensed HIV-1 antibody tests that can be used on urine samples. The company believes that accurate, non invasive urine-based testing methods for HIV and other chronic diseases may make important contributions to public health by helping to foster an environment in which testing may be done safely, economically, and painlessly.

Statements in this press release that are not historical facts are forward-looking statements, including statements regarding market adoption of the HIV-1 urine testing products and the serum Western Blot test and statements regarding marketing and distribution arrangements and plans. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including the Company's ability, directly or through third parties, to successfully manufacture and market the HIV-1 urine testing products and the serum Western Blot test and the ability of the Company to continue to finance its operations and to enter into distribution and marketing arrangements. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect the occurrence of unanticipated events. Factors which may impact the Company's success are more fully discussed in the Company's most recent periodic reports on Form 10-Q and Form 10-K.

             CALYPTE BIOMEDICAL CORPORATION AND SUBSIDIARY
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except per share data)
                              (Unaudited)

                          Three Months Ended        Six Months Ended
                              June 30,                  June 30,
                         2000         1999        2000         1999

Revenues:
  Product sales           $ 787        $ 914     $ 1,885      $ 1,748

Operating expenses:
  Product costs           1,307        1,119       2,724        2,116
  Research and
    development costs       572          913       1,116        2,573
  Selling, general and
   administrative costs   2,213        1,216       3,522        2,346

    Total expenses        4,092        3,248       7,362        7,035

       Loss from
        operations       (3,305)      (2,334)     (5,477)      (5,287)

Interest income,
  interest expense,
  and other income          100           69          97           98

   Loss before income
    taxes                (3,205)      (2,265)     (5,380)      (5,189)

Income taxes                 -            -           (2)          (2)

   Net loss              (3,205)      (2,265)     (5,382)      (5,191)

Less dividends on
  mandatorily redeemable
  Series A preferred
  stock                     (30)         (30)        (60)         (60)

Net loss attributable
  to common
  stockholders          $(3,235)     $(2,295)    $(5,442)     $(5,251)

Net loss per share
  attributable to
  common stockholders
  (basic and diluted)   $ (0.13)     $ (0.11)    $ (0.24)     $ (0.29)

Weighted average shares
  used to compute net
  loss per share
  attributable to common
  stockholders
  (basic and diluted)    24,518       20,120      22,549       18,238


             CALYPTE BIOMEDICAL CORPORATION AND SUBSIDIARY
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)
                              (Unaudited)

                                   June 30,        December 31,
                                     2000             1999

Cash, cash equivalents,
  and restricted cash                $ 5,839       $ 2,652
Securities available for sale              -           503
Working capital                        5,433         1,860
Total Assets                          10,701         7,821
Current portion of notes payable         707           844
Long-term portion of note payable        118             -
Long-term portion of capital lease
  obligations                            122            50
Mandatorily redeemable Series A
  preferred stock                      2,276         2,216
Total stockholders' equity             4,666         1,330