Medscape Closes On Commitment for $17.8 Million Investment; Investment Reflects Confidence in Company Strategy.

Business Editors/Health & Medical Writers

HILLSBORO, Ore.--(BW HealthWire)--Jan. 5, 2001

Medscape (Nasdaq:MDLI), the leading provider of digital health records and online health information, announced today that it has closed on a $17.8 million capital investment (a $500,000 increase from what was previously reported) from a group of investors led by Quantum Industrial Partners LDC and other affiliates of Soros Fund Management LLC.

The financing involves the issuance of 5,933,332 shares of convertible preferred stock at $3 per share, with associated warrants to purchase 4,537,254 shares of common stock at an exercise price of $.01 per share. The preferred stock carries a 9 percent annual dividend, is convertible into common stock on a share for share basis at the option of the investors or automatically if certain conditions are met, is redeemable under certain circumstances, is entitled to appoint a director to the company's board of directors, and contains approval rights over certain corporate actions. As a result of the closing of the financing, Soros and its affiliates own approximately 13.6 percent of the company's common stock (on an as converted basis). Entities affiliated with Soros have been involved in previous rounds of financing for Medscape (formerly MedicaLogic) prior to the company's initial public offering in December 1999.

"We are pleased to announce the completion of this financing," said Don Bloodworth, chief financial officer, Medscape. "It reflects the investors' confidence in our business strategy and provides us with a cushion of cash to help us achieve our 2001 business objectives."

About Medscape

Medscape(R) (Nasdaq:MDLI) is a clinical information company dedicated to improving healthcare through the development of Internet portals and Digital Health Record (DHR) applications that provide a wide array of relevant and trusted healthcare information to individual, small group and network healthcare providers, the pharmaceutical industry, and consumers.

The merger of MedicaLogic, Inc. and Medscape, Inc., and MedicaLogic, Inc.'s acquisition of Total eMed, Inc., a privately held company, in May 2000 formed MedicaLogic/Medscape, Inc., d/b/a Medscape. The company employs approximately 1,000 people and is headquartered in Hillsboro, Oregon.

Medscape, MedicaLogic, and Logician are registered trademarks of MedicaLogic/Medscape, Inc. in the United States. Other product and brand names are trademarks of their respective owners.

The statements in this press release regarding our prospects for continued growth, use of capital, and our plans to introduce new products are forward-looking statements based on current information and expectations. Achievement of those results is subject to a number of risks and uncertainties, including the risk that our products and services will not be accepted by physicians, patients and other healthcare stakeholders; the risk that we may not be able to introduce new products on schedule or at all; and the risk that we may not achieve favorable operating results or profitability. The reader is cautioned not to place undue reliance on forward-looking statements, which are not a guarantee of future performance. For more information concerning these and other possible risks, please refer to our Form 10-K filed on March 14, 2000, our Form 10-Q filed on October 27, 2000, our Form S-4/A filed on April 4, 2000 and other filings with the Securities and Exchange Commission. These filings can be accessed over the Internet at www.sec.gov.