NeoPath's AutoPap Primary Screening System Approved by FDA.

REDMOND, Wash.--(BUSINESS WIRE)--May 5, 1998--

AutoPap(R) is the World's First Approved Automated Diagnostic

System for Detection of Cervical Cancer 

Clinical Data Demonstrate a Statistically Significant Improvement

for Laboratories as Compared to Current Practice

NeoPath, Inc. (NASDAQ:NPTH) announced today that the U.S Food and Drug Administration (FDA) approved the Company's AutoPap(R) System for use as a primary Pap smear screener. The AutoPap Primary Screening System is the world's first device to receive FDA approval for use in automated initial Pap smear screening for the early detection of cervical cancer.

"This landmark decision by the FDA is a fundamental breakthrough for women's healthcare which represents the most significant development in cervical cancer screening since the invention of the Pap smear itself," said Dr. Alan C. Nelson, President and CEO. "The AutoPap Primary Screening System not only improves the accuracy of Pap smear screening, but also provides the opportunity to increase screening capacity and address the operational constraints in the clinical laboratory industry."

In support of this premarket approval the Company provided performance data from a large-scale, prospective, intended use clinical study comprised of more than 25,000 patient slides from five clinical laboratories. The data from this study show that overall the AutoPap achieves greater accuracy in early diagnosis of cervical disease and reduces both false negative and false positive test results. The AutoPap Primary Screening System demonstrates a statistically significant increase in identifying disease when compared to current practice. The AutoPap Primary Screening System accuracy was significantly better than current practice in all measured disease categories:

-- Most dangerous: LSIL+, which includes low-grade squamous

intraepithelial lesions (LSIL), high-grade lesions (HSIL)

and cancer;

-- Serious: Low-grade lesions (LSIL) alone; and

-- Least dangerous: ASCUS+, atypical squamous and glandular cells

of undetermined significance and worse.

Using the AutoPap Primary Screening System, laboratories in this study detected a statistically significant greater number of ASCUS+, ASCUS/AGUS, LSIL, and LSIL+ slides and detected more HSIL+ slides in the AutoPap Assisted Practice as compared to Current Practice. Also, The AutoPap was equivalent to Current Practice in identifying Satisfactory But Limited By (SBLB) slides, in identifying unsatisfactory slides, and detecting Benign Cellular Changes (BCC), reactive changes, and infection.

The AutoPap System utilizes proprietary technology, including two unique slide classification algorithms to identify those Pap smears with the highest likelihood of abnormality. As an initial screener, the AutoPap Primary Screening System identifies up to 25% of slides that receive AutoPap review only and may be archived as normal. The remaining 75% of the slides have the highest probability of containing abnormal cells. Assisted by the AutoPap's slide ranking report, these remaining slides are screened by cytotechnologists. By reducing the number of Pap smears requiring human review, clinical laboratories have the potential to reduce their manual screening costs and at the same time, increase their screening capacity. Furthermore, increasing reimbursement rates for the Pap smear test may motivate laboratories to adopt the AutoPap Primary Screening System to expand their business.

Dr. Nelson stated that NeoPath is preparing for a full scale market launch of the AutoPap Primary Screening System in the U.S. "NeoPath has the manufacturing capacity to meet initial anticipated demand for the AutoPap, and to rapidly increase capacity as required. In anticipation of this approval, we have expanded our field sales and service organizations, and added a new team of reimbursement specialists to collaborate with the government and third party payors about the AutoPap System's significant healthcare benefits and economic advantages."

NeoPath, Inc., headquartered in Redmond, Washington, develops visual intelligence technology to improve accuracy in complex medical testing through its unique, proprietary technology that automates the interpretation of medical images. The AutoPap System consists of high-speed video microscopes, specialized visual intelligence software, and ultra-fast morphology computers.

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties, including without limitation, product and manufacturing regulatory approvals; the Company's limited manufacturing, marketing, customer service and support capabilities; the status of competing products and associated litigation; and other risks and uncertainties detailed in the Company's filings with the Securities and Exchange Commission. -0- http://www.neopath.com

CONTACT: NeoPath, Inc.

Stacie D. Byars, 425/556-3050

www.neopath.com