CompuMed to Collaborate with University of Massachusetts Medical Center for Digital Imaging System; Company Receives Worldwide Rights to Powerful Computer-Based X-Ray Technology for Development of Second-Generation OsteoGram Bone Densitometry System.

MANHATTAN BEACH, Calif.--(BUSINESS WIRE)--June 3, 1996-- CompuMed, Inc. (Nasdaq Small Cap: CMPD) today announced it has entered into a licensing arrangement with the University of Massachusetts Medical Center (UMMC) for the licensing of technologies (U.S. Patent 5,150,394, and 5,465,284) for performing and capturing "filmless" quantitative x-ray radiographic imaging. These technologies use a charge-coupled device (CCD) camera to capture x-ray images without the use of film.

Under terms of the agreement, CompuMed will receive from UMMC worldwide rights in the field of bone densitometry to develop and market devices and services, subject to U.S. Food and Drug Administration (FDA) regulation, which will employ the licensed technologies. UMMC has reserved the right to license the technologies to two other companies. CompuMed will also begin sponsoring additional research at UMMC for a two-year period and will receive exclusive first-option rights to license any new inventions resulting from this research. The sponsored research will focus on digital bone densitometry measurement techniques integrating CompuMed's proprietary software. The specific financial terms were not disclosed.

"CompuMed's second-generation OsteoSystems strategy has been focused on combining an enhanced OsteoGram(R) technology with low-cost x-ray generation and capture," said Rod N. Raynovich, President and Chief Executive Officer of CompuMed. "This collaboration, combined with the strengths of our subcontractors and partners, provides CompuMed with a high-quality team capable of achieving this goal."

The Medical Physics research team in the Department of Radiology at UMMC is led by Andrew Karellas, Ph.D., Associate Professor, Director of Radiologic Physics. Dr. Karellas and his team have been among the first to apply CCD technology to medical x-ray applications. For example, CCD technology has already been commercialized in digital mammography for breast lesion localization. The direct digital approach (called "filmless radiography") can potentially improve dose efficiency and produce higher-quality images than is possible with film. In filmless radiography, x-rays are detected by a thin phosphor material that emits light in response to the x-ray interactions. The light from the phosphor is detected by the CCD camera through either a fiber-optic bundle or a lens. The prototype filmless x-ray capture device will be developed at UMMC in collaboration with CompuMed and its subcontractors, like RadSource, Inc., which is currently developing the OsteoView(TM), a low-cost, low-energy x-ray device.

"The potential application of this new technology to bone densitometry results from the dramatically increased computing power of personal computers (PCs), their concurrent decrease in price, and the substantial increase in the availability of high-quality CCDs and low-cost electronics," said Andrew I. Lisiecki, newly appointed Vice President of Technology of CompuMed. "These factors now allow for a high-resolution, compact system that can be used in a physician's practice or clinic in a cost-effective manner. CompuMed plans to develop this second-generation OsteoSystem by integrating our software knowledge with the clinical database of our OsteoGram(R), which is currently marketed by the Bone Measurement Institute, an affiliate of Merck & Co., Inc. This system would be a lower-cost, point-of-care bone density device. In addition, since digital imaging has the potential for direct transmission of bone density data through computer networks for purposes of further analysis or patient follow-up, CompuMed plans to integrate the second-generation OsteoSystem with a PC having connectivity potential for teleradiology applications and access to on-line databases and technical support."

This news release contains forward looking statements based upon current expectations that involve a number of business risks and uncertainties that could cause projected results to vary materially from actual results. The factors which could cause results to differ materially include technological advances in this area by others and changes in healthcare reforms, including reimbursement programs and capital needs to fund any possible delays or extensions of the research program. Additional business risks, uncertainties, and other cautionary statements are described in the Prospectus, dated March 13, 1996, to CompuMed's Registration Statement filed with the U.S. Securities and Exchange Commission (SEC) on Form SB-2 (Reg. No. 333-01453).

CompuMed, based in Manhattan Beach, California, develops solutions to important medical problems through the use of computer technology. In addition to the OsteoGram(R) for osteoporosis assessment, CompuMed is focused on telemedicine services for cardiology and currently provides on-line computer interpretation of medical tests, such as electrocardiograms (ECGs), to physicians and healthcare providers.

Editor's Note: This release is available on the Internet at http://www.compumed.net and http://www.noonanrusso.com.

CONTACT: Rod N. Raynovich

President and Chief Executive Officer

CompuMed, Inc.

[phone] ext. 119

e-mail: [e-mail]

or

Noonan/Russo Communications, Inc.

[phone]

Susan Noonan (investor) ext. 203

Rich Tammero (media) ext. 222

e-mail: [e-mail]