Large Scale Biology Corporation -- LSBC -- Reports Financial Results for Third Quarter 2002.

Business Editors/Health & Medical Writers

VACAVILLE, Calif.--(BUSINESS WIRE)--Oct. 23, 2002

Will Explore Partnering Alternatives for Revised Clinical

Trials Strategy to Complete Promising Plant-Produced

NHL Cancer Vaccine Development

Large Scale Biology Corporation (Nasdaq:LSBC) today reported results for the third quarter ended September 30, 2002.

LSBC's net loss for the third quarter of 2002 was $6.8 million, or $0.27 per share, compared to a net loss of $9.6 million, or $0.38 per share for the second quarter of 2002 and $4.8 million, or $0.20 per share for the third quarter of 2001.

Revenues for the quarter ended September 30, 2002 were $0.7 million, sequentially higher than the second quarter of 2002 and a decrease from $5.1 million in the same period last year, reflecting the end of all funding from the research collaboration phase of the Company's agreement with The Dow Chemical Company and Dow AgroSciences LLC, the Company's primary source of revenue for the quarter ended September 30, 2001. Total operating costs and expenses for the third quarter 2002 were $7.6 million, a decrease of approximately $2.6 million from the second quarter of 2002 and $3.0 million from the third quarter of 2001. Included in the second quarter of 2002 was an expense of approximately $900,000 for severance benefits related to the Company's reorganization in June 2002.

Large Scale Biology Corporation ended the quarter with approximately $27.3 million in cash, cash equivalents and marketable securities.

"In another quarter of economic turbulence, LSBC management has succeeded in advancing revenue-generating objectives with new deals, restructuring to operate more efficiently and preserve cash, repositioning business units to accelerate commercialization opportunities and recasting strategy for the development of our most promising pipeline products," said John D. Fowler, President. "We have continued to make hard choices in funding our product priorities during a quarter of strong scientific news and weak market conditions. Significantly, we are today announcing a multi-pronged strategy to further the clinical development of our plant-produced vaccines for non-Hodgkin's lymphoma (NHL). Recent clinical results announced on August 6, 2002 encouraged our clinical team to spend the past 2 1/2 months devising a randomized, multi-site Phase II/III pivotal clinical trial of the NHL vaccine, which we will discuss with the FDA this fall. This approach differs from our previously announced plan to begin only Phase II trials of the NHL vaccine this month, but we believe this new compressed approach is scientifically justified and likely to reach the final stages of FDA approval more quickly and less expensively than under traditionally separate Phase II and Phase III protocols. At the same time, given the significant funding required to move the NHL product to commercialization, we will explore alternative funding opportunities for this program, including potentially seeking a partner with which to co-develop our NHL vaccine."

Robert L. Erwin, Chairman and CEO of LSBC, said, "We believe we have made the necessary progress in our NHL vaccine development program to justify moving forward more rapidly and on a more aggressive timeline. Given the present biotechnology market-financing environment, we believe it prudent to explore partnering alternatives prior to commencing our proposed pivotal Phase II/III trials. We also have developed other potential clinical trial protocols to treat sub-populations of NHL patients, such as those with indolent lymphoma who have not been previously treated with chemotherapy, and may also move forward with these trials, which may allow even faster assessment of the clinical efficacy of our vaccine. Additionally, we have made significant progress with our potential alpha-Galactosidase product for the treatment of Fabry's disease. We filed an orphan drug application in September for this indication and expect to file an IND later this winter. We may seek a partner for this proprietary product as well."

Third-quarter and recent Company highlights include:

-- Announcement of a $12.3 million, five-year proteomics contract with the National Institute of Environmental Health Sciences to analyze samples and create a public database relating environmental exposure to disease. This prestigious collaboration provides significant near-term revenues and validates LSBC/Proteomics' proprietary technologies.

-- Announcement of a new collaboration with the Institute of Infectious Disease and Molecular Medicine at the University of Cape Town (South Africa) to develop and manufacture vaccines intended to protect against infectious diseases, including cervical cancer and AIDS/HIV. After joint work on promising vaccines is completed, we anticipate that the most promising vaccine candidates will be produced at LSBC/Biomanufacturing in Kentucky for clinical trials.

-- Announcement of a $2 million, three-year award from the National Institute of Standards and Technology to develop a new vaccine discovery and production platform that will generate strong and lasting immunological responses. The award, which begins funding in November 2002, will hasten improvements to LSBC's proprietary GENEWARE(R) system/technology capabilities for multiple public health and commercial benefits.

-- Announcement that Agilent Technologies, Inc. has licensed Large Scale Biology Corporation's proteomics sample preparation and immunosubtraction technology for the research market.

-- Announcement of promising results from the Phase I clinical trials conducted by Ronald Levy, MD, Chief of Oncology at Stanford University School of Medicine, for LSBC's personalized vaccines for non-Hodgkin's lymphoma patients. The vaccines were well tolerated in all 16 patients with no reported serious adverse events. The clinical results indicate a positive immune response to the vaccine that calls for proceeding to next phases of trial in the approval process. An analysis of the Phase I results will be presented formally at the Meeting of the American Society of Hematology in December 2002.

-- Announcement of the filing for Orphan Drug Status on plant-produced Human alpha-Galactosidase A used for the treatment of Fabry's disease. LSBC has manufactured clinical-grade quantities of alpha-Galactosidase A at LSBC/Biomanufacturing in Kentucky.

-- Announcement of the creation of Biopharmaceutical Development, Biomanufacturing and Proteomics business units to support commercial opportunities. Directed by separate chains of command, the freestanding business units are a further refinement of a corporate reorganization undertaken earlier in the year designed to focus business development and more rapidly achieve commercial end points.

-- Appointment of Charles D. Nash to the board of directors of Large Scale Biology Corporation. Mr. Nash is a corporate financial strategist and principal of Nash Equity Capital, Inc. of Atlanta, Georgia.

Conference Call

Large Scale Biology Corporation will host a conference call discussing third quarter financial results and 2002 outlook on Wednesday, October 23, 2002 at 5:00 P.M. (EDT). A live webcast of the call may be accessed on Large Scale Biology Corporation's website at www.lsbc.com. If you are unable to participate during the live webcast, the call will be archived on the LSBC web site through close of business on November 1, 2002.

An audio replay of the call will be available until midnight, October 25, 2002, two hours after the call. For replay in the U.S., dial [phone], or outside of the U.S., dial [phone]. Please enter the conference identification number 6069283.

About Large Scale Biology Corporation

Large Scale Biology Corporation uses its functional genomics, proteomics and biomanufacturing technologies to develop and manufacture personalized drugs, vaccines and diagnostics for rapid identification and effective treatment of disease. Corporate offices and the Genomics Division are headquartered in Vacaville, California; the Company's Proteomics Division is located in Germantown, Maryland; and the Company's Biomanufacturing Division is located in Owensboro, Kentucky. For more information about Large Scale Biology Corporation, visit the Company's website at www.lsbc.com.

In this release, any statements, which refer to expectations, projections or other characterizations of future events or circumstances, are forward-looking statements. Forward-looking statements involve risks, uncertainties and situations that may cause our actual results or performance to be materially different from any future results or performance expressed or implied by these statements, including our dependence upon and our ability to enter into and maintain successful relationships with collaboration partners, creation of demand for products incorporating or made using our technologies, our ability to improve and keep our technologies competitive, delays or issues which may arise in securing FDA approval for certain products we develop, the actual clinical efficacy of such products, our ability to manage costs in ways that preserve our product pipeline and technology base and the requirement for substantial funding to conduct research and development and to expand commercialization activities. We cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this release. For a further list and description of such risks and uncertainties, see LSBC's reports filed with the Securities and Exchange Commission, including Forms 10-K and 10-Q. Except as required by law, we do not undertake to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

LSBC(TM) is a trademark of Large Scale Biology Corporation. GENEWARE(R) is a registered trademark of Large Scale Biology Corporation.

                    Large Scale Biology Corporation
            Condensed Consolidated Statements of Operations
                               Unaudited
               (In thousands, except per share amounts)

                        Three months ended      Nine months ended
                             Sept. 30,              Sept. 30,
                       --------------------    --------------------
                         2002        2001        2002        2001
                       --------    --------    --------    --------


Revenues               $    710    $  5,129    $  1,625    $ 17,053
                       --------    --------    --------    --------
Costs and expenses:
  Development
   agreements               579         681         867       3,216
  Research and
   development            4,525       5,794      16,758      16,376
  General,
   administrative
   and marketing          2,370       3,781       9,983      10,266
  Amortization of
   purchased
   intangibles              156         325         468         975
                       --------    --------    --------    --------
Total costs
 and expenses             7,630      10,581      28,076      30,833
                       --------    --------    --------    --------
Loss from operations     (6,920)     (5,452)    (26,451)    (13,780)
Interest income, net        156         651         587       2,710
                       --------    --------    --------    --------
Net loss               $ (6,764)   $ (4,801)   $(25,864)   $(11,070)
                       ========    ========    ========    ========
Net loss per share
 - basic and diluted   $  (0.27)   $  (0.20)   $  (1.04)   $  (0.45)
                       ========    ========    ========    ========
Weighted average
 shares outstanding
 - basic and diluted     24,993      24,573      24,962      24,537
                       ========    ========    ========    ========



                    Large Scale Biology Corporation
                 Condensed Consolidated Balance Sheets
                               Unaudited
                            (In thousands)

                                              Sept. 30,    Dec. 31,
                                                 2002        2001
                                               -------     -------
Assets
Current assets:
    Cash and marketable securities             $27,251     $48,779
    Other current assets                         1,397       1,217
                                               -------     -------
Total current assets                            28,648      49,996
Property, plant, and equipment, net             16,457      18,882
Intangible and other assets, net                 6,936       8,034
                                               -------     -------
                                               $52,041     $76,912
                                               =======     =======

Liabilities and Stockholders' Equity
Current liabilities:
    Accounts payable and accrued expenses      $ 2,062     $ 2,921
    Current portion of long-term debt              104         107
    Deferred revenue and customer advances         400         278
                                               -------     -------
Total current liabilities                        2,566       3,306
Long-term debt                                     217         249
Long-term deferred revenue                          --         320
                                               -------     -------
Total liabilities                                2,783       3,875
Stockholders' equity                            49,258      73,037
                                               -------     -------
                                               $52,041     $76,912
                                               =======     =======