Neoprobe Announces Second Quarter Results.

Business Editors and Health/Medical Writers

DUBLIN, Ohio--(BW HealthWire)--Aug. 2, 2001

Neoprobe Corporation (OTCBB:NEOP) today announced financial results for the second quarter of 2001.

Revenue for the second quarter was $2.3 million compared to $2.7 million for the comparable period in 2000, a decrease of 16%. Gross margin for the quarter was 37% compared to 47% in the second quarter of 2000. As anticipated, revenue and gross margin declined in the second quarter due to a scheduled reduction in the transfer prices at which Neoprobe sells to its distributor. Net income for the second quarter of 2001 was $177,000, down from $639,000 in the second quarter of 2000 and up from $81,000 in the first quarter of 2001.

For the first six months of 2001, revenues were $3.9 million compared to $4.6 million for the first half of 2000, a decrease of 15%. Total operating expenses for the first half of 2001 were $1.3 million compared to $1.8 million for the first half of 2000, a decrease of 25%. Neoprobe's net income in the first half was $258,000 compared to year-to-date net income of $612,000 in 2000. "The second quarter and year-to-date results are consistent with the Company's expectations and reflect our efforts to continually strengthen our core gamma guided surgery product line," said Brent Larson, Neoprobe's chief financial officer.

In addition to the financial results, Neoprobe reported continued progress in the development of its product pipeline. The following were some of the key development milestones that occurred during the second quarter:

-- Neoprobe announced collaboration with Aastrom Biosciences, Inc.
(Nasdaq:ASTM) to evaluate Neoprobe's proprietary activated LNL cell technology
in connection with the Aastrom Replicell(TM). Neoprobe and Aastrom are working
with clinical and regulatory bodies to prepare for the commencement of studies
to demonstrate the ability of the Replicell system to expand and activate the
LNL cells.

-- Researchers from UCSD presented encouraging preliminary clinical findings at
the 48th Annual Meeting of the Society of Nuclear Medicine regarding a compound
(99mTc(DTPA) Mannosyl-Dextran) being evaluated as a radiotracer to identify
lymphatic tissue in sentinel node procedures. The clinical results presented
were consistent with recently published preclinical data regarding the compound
that demonstrated improved clearance from the site of injection with no distant
nodal uptake other than the sentinel node.

"We intend to continue moving forward in leveraging our existing technology platforms and in working to grow our base business," said David Bupp, Neoprobe's president. "We have also started preliminary evaluation of other technologies that may be synergistic to our current business. We believe that strategically expanding our product portfolio is a key ingredient to our long-term success."

Neoprobe's gamma detection systems are currently used for intraoperative lymphatic mapping (ILM), an emerging standard of care technology for breast cancer and melanoma. ILM begins with a patient being injected at the site of a tumor with a commercially available radioactive tracing agent. The agent is intended to follow the same lymphatic flow as the cancer would if it had metastasized or spread to lymph nodes. The surgeon, using the probe, may then identify key (sentinel) lymph nodes to be tested for cancer.

Statements in this news release which relate to other than strictly historical facts, such as statements about the Company's plans and strategies, expectations for future financial performance, new and existing products and technologies, and markets for the Company's products, are forward-looking statements. The words "believe," "expect," "anticipate," "estimate," "project," and similar expressions identify forward-looking statements that speak only as of the date hereof. Investors are cautioned that such statements involve risks and uncertainties that could cause actual results to differ materially from historical or anticipated results due to many factors including, but not limited to, the Company's limited revenues, accumulated deficit, future capital needs, uncertainty of capital funding, dependence on limited product line and exclusive distributor, uncertainty of market acceptance, competition, limited marketing and manufacturing experience, and other risks detailed in the Company's most recent Annual Report on Form 10-KSB and other Securities and Exchange Commission filings. The Company undertakes no obligation to publicly update or revise any forward-looking statements.

NEOPROBE CORPORATION

CONDENSED BALANCE SHEETS
                                              June 30,   December 31,
                                                2001         2000
                                             ----------   ----------
Assets

Cash and cash equivalents                    $4,466,868   $4,643,347
Other assets                                  2,607,907    2,929,468
                                             ----------   ----------

Total assets                                 $7,074,775   $7,572,815
                                             ==========   ==========

Liabilities and stockholders' equity

Liabilities                                  $1,249,930   $1,607,276
Deferred revenue                              2,600,000    3,000,000
Stockholders' equity                          3,224,845    2,965,539
                                             ----------   ----------

Total liabilities and stockholders' equity   $7,074,775   $7,572,815
                                             ==========   ==========


CONDENSED STATEMENTS OF OPERATIONS

                     Three Months Ended         Six Months Ended
                    June 30,     June 30,     June 30,     June 30,
                      2001         2000         2001         2000
                  -----------  -----------  -----------  -----------

Revenues:
 Net sales        $ 2,077,499  $ 2,511,659  $ 3,471,968  $ 4,117,470
 License revenue      200,000      200,000      425,000      450,000
                  -----------  -----------  -----------  -----------

   Total revenues   2,277,499    2,711,659    3,896,968    4,567,470
                  -----------  -----------  -----------  -----------

Cost of goods
 sold               1,441,330    1,444,411    2,389,577    2,282,025
                  -----------  -----------  -----------  -----------

Gross profit          836,169    1,267,248    1,507,391    2,285,445
                  -----------  -----------  -----------  -----------

Operating expenses:
 Research and
  development          96,993       81,309      171,167      375,354
 Marketing and
  selling                --         52,094         --        162,976
 General and
  administrative      592,521      568,550    1,162,829    1,236,892
                  -----------  -----------  -----------  -----------

   Total operating
    expenses          689,514      701,953    1,333,996    1,775,222
                  -----------  -----------  -----------  -----------

Income from
 operations           146,655      565,295      173,395      510,223
Other income, net      30,729       74,018       85,077      102,228
                  -----------  -----------  -----------  -----------

Net income            177,384      639,313      258,472      612,451
                  -----------  -----------  -----------  -----------

Loss on
 retirement of
 preferred stock         --           --           --        764,668
                  -----------  -----------  -----------  -----------

Income (loss)
 attributable to
 common
 stockholders     $   177,384  $   639,313  $   258,472  $  (152,217)
                  ===========  ===========  ===========  ===========

Income (loss) per
 common share:
 Basic            $      0.01  $      0.02  $      0.01  $     (0.01)
 Diluted          $      0.01  $      0.02  $      0.01  $     (0.01)

Average shares
 outstanding:
 Basic             25,895,770   25,850,777   25,895,365   25,513,614
 Diluted           26,064,112   26,734,898   26,075,595   25,513,614