InMedica Development Corporation: Testing Blood Safely From The Outside In.

SALT LAKE CITY--(BUSINESS WIRE)--Sept. 16, 1996--Every day in hospitals and medical clinics worldwide, blood tests are conducted using an intravenous needle to syphon blood from a patient's vein, which is then delivered to the lab for analysis.

In tests that call for a smaller sample, a spring-loaded lancet is used to puncture a patient's fingertip, and blood drops are then milked into a capillary tube and spun in a centrifuge.

Unfortunately, these traditional invasive methods of extracting blood not only increase the risk of transmitting diseases, but also create discomfort for the patient.

InMedica Development Corp. (OTCBB:"IMDD") is a medical device company seeking to capitalize on the potential market among health professionals to take blood measurements quickly, accurately and inexpensively, without the risk or pain associated with current invasive methods. Specifically, InMedica is developing a noninvasive blood monitoring device to measure hematocrit levels, the most common blood test performed in all of medicine.

As the company expands its efforts to bring its noninvasive hematocrit device to market, InMedica has retained Jordan Richard Assoc. to conduct a national investor relations program. According to Madeleine Franco, chief executive officer of Jordan Richard Assoc., "With its patented, noninvasive blood monitoring technology, strategic business partnerships and cash-driven business plan, InMedica Development Corporation seems well on its way to capitalizing on tremendous long-term revenue potential."

Fast, Efficient, Noninvasive

An indicator of the blood's oxygen-carrying capacity, hematocrit represents the percentage of a patient's blood volume that is comprised of red blood cells. Historically, the only reliable method of determining hematocrit has been to draw a sample of blood directly and invasively from the subject.

"Hematocrit levels are considered one of the most fundamental measurements necessary for accurate patient evaluation," said Larry E. Clark, president and chief executive officer of InMedica. "As the fear of disease transmission becomes increasingly prevalent among consumers, the demand for quick, noninvasive blood testing will grow even larger. Our goal is to deliver a product that one day will become a common feature of operating rooms, emergency departments, ambulances, and any setting where efficient, reliable hematocrit monitoring is critical."

Universally Applicable Technology

The potential market for noninvasive hematocrit measurement technology is expansive. Scenarios where it could be used to significantly improve current methods include: -0- -- routine hematocrit determination in

doctors' offices -- routine pre- and post-operative

hematocrit determination -- painless hematocrit determination

in pediatric settings -- routine hematocrit determination

before and after childbirth -- rapid hematocrit measurement

in trauma situations -- real-time hematocrit evaluation

in surgical "blood-loss" settings -- portable field use (paramedics, military) -0-

In practice, InMedica's device is applied to the patient with a conventional blood pressure cuff and a disposable, detachable electrode that attaches to the patient's finger. Once the electrode is attached, it is possible to observe hematocrit levels, essentially in real-time.

The evaluation is simple, painless, accurate and totally noninvasive. As a result, the device not only prevents contamination, but also the results are virtually instantaneous, which is ideal for situations requiring extended observation, such as during surgery.

On June 18, 1996, InMedica received protection for its technology against commercial infringement, with the issuance of U.S. patent number 5,526,808, "Method and Apparatus for Noninvasively Determining Hematocrit."

Pact With Johnson & Johnson Fuels Cash-Driven Business Plan

InMedica has been successful in its ability to pay for its own development by carefully parlaying the company's past R&D achievements into a solid, cash-producing foundation. The company currently derives its revenue from a licensing agreement with Johnson & Johnson Medical, Inc (JJMI). Before InMedica made noninvasive hematocrit measurement technology its primary focus in recent years, the company, through its subsidiary MicroCor, worked to develop, manufacture and market a portable electrocardiograph (ECG) monitor.

InMedica joined forces with JJMI in 1989 to develop a new ECG, blood pressure and oxygen saturation monitoring product the Dinamap PLUSTM that combined and enhanced InMedica's technology with technologies developed by JJMI.

Under its most recent agreement with Johnson & Johnson, InMedica is paid a royalty for each monitor that JJMI sells. In consideration of the royalty, the company has granted JJMI a nonexclusive worldwide license to the technology. Over the last three consecutive years, the royalties that InMedica has received from JJMI's sale of the Dinamap PlusTM ECG monitor have increased steadily to nearly $700,000 in 1995, totaling more than $1.7 million during the period.

Because JJMI is responsible for production and marketing costs associated with the product, all revenues that InMedica receives under the agreement contribute directly to its bottom line.

"Having enjoyed a mutually profitable venture with JJMI, we understand the value of developing effective business relationships," noted Clark. "We intend to continue investigating partnership opportunities with larger household name' companies that possess ample production resources and established channels of distribution for our emerging technologies."

Achieving Precision Through Neural Networks And Irish Know-How

InMedica has contracted to produce six second-generation prototypes, which will allow additional clinical studies in multiple locations. To prepare for the Food and Drug Administration's 510k approval process, InMedica's device is being calibrated through the use of neural networks, an area of artificial intelligence involving the analysis of complex data.

Neural network techniques utilize supervised learning, or "training," in which the network repeatedly analyzes data for which the correct answer is known. Once completed successfully, the training enables the network to accurately predict results taken from new data.

Recently the company finished a second round of clinical data gathering for the calibration of its noninvasive hematocrit device. In the test, a comparison was made between the hematocrit levels in central venous blood drawn and tested through traditional invasive means and the hematocrit levels in blood analyzed using InMedica's device.

The performance of the device on the test set comprised of 194 patient records correlated closely to the measurements of traditionally tested blood (0.93 correlation coefficient), while in the validation set, a 0.91 correlation coefficient was achieved.

"We are extremely pleased with these most recent test results, which bring us closer to initiating FDA-approval procedures," said Clark. Six second-generation prototypes, which will facilitate entry into formal clinical validation studies, have been designed and are currently being assembled.

InMedica has also entered into a contract with the Northern Ireland Bio-Engineering Centre (NIBEC) to design and develop a new, proprietary finger sensor for use with InMedica's blood monitoring device. The new electrode will serve as the data-collection link between the device and patient.

NIBEC, established in 1985, has extensive experience in the investigation, design, development and clinical testing of a wide range of biomedical sensor systems. With support from the International Fund for Ireland, NIBEC works in partnership with other sensor research groups from across Ireland, forming the Bio-Medical and Environmental Sensor Technology (BEST) Centre.

BEST, with its broad base of expertise and resources, has led pioneering research in a number of technological developments, including biomedical and biomechanical sensors, disposable electrocardiograph electrodes, and drug monitoring/delivery devices.

Combining The "Right Stuff"

As InMedica pursues development and commercialization of its noninvasive hematocrit monitoring device, the company is blending together a number of business ingredients that will foster its long-term success.

InMedica holds the patent on technology that may revolutionize the way blood testing and monitoring is conducted, representing enormous revenue potential. The company is also prepared to finance much of its own growth with existing cash flow from its agreement with JJMI. And, management's experience cultivating influential business relationships within the medical industry will allow InMedica to tap into well-established markets once production of its device begins.

"Recent developments have been encouraging," said Clark. "Contemplating the versatility of this technology as we prepare for additional clinical testing, we look forward to leveraging our resources, experience and know-how to transform this technology's significant market potential into bottom-line reality."

We hope you find the above information about InMedica Development Corp. (OTCBB:"IMDD") interesting and informative. If you would like to continue receiving information about the company, please complete the attached card and mail. If you have any questions or need additional information, please contact InMedica at 801/521-9300 or Jordan Richard Assoc. at 801/595-8611.

CONTACT: InMedica, Salt Lake City

801/521-9300

or

Jordan Richard Assoc., Salt Lake City

801/595-8611