PhotoMedex Conducting Clinical Trials for New Skin Diseases: Initiates Consumer Awareness Marketing and Advertising Campaign in Boston Metropolitan Area.

Business Editors, Health/Medical Writers

RADNOR, Pa.--(BUSINESS WIRE)--Oct. 19, 2000

PhotoMedex, Inc. (Nasdaq:PHMD) today announced that it is conducting clinical trials at Massachusetts General Hospital (MGH), utilizing its patented XTRAC(TM) laser system, to determine the efficacy of its system for the treatment of vitiligo and lichen planus.

Dr. Charles Taylor, who led the psoriasis clinical trials at MGH in collaboration with Dr. R. Rox Anderson, is the lead investigator for these trials. The clinical trials involve approximately 18 patients for vitiligo and 10 patients for lichen planus, and are currently expected to last approximately several months. At the conclusion of the studies, an evaluation will be made of the patient outcomes to determine whether to discontinue or extend the studies, or whether to proceed as expeditiously as possible for FDA approval.

According to the National Vitiligo Foundation (NVF), approximately 1-2% of Americans (2-4 million) are affected by vitiligo. Vitiligo is a skin disease causing the loss of pigmentation in which patients develop white spots in the skin that vary in size and location. The spots occur when pigment cells are destroyed and the pigment can no longer be produced. The NVF further reports, the mainstay of treatment for vitiligo patients, PUVA, can cost close to $6,000 or more per patient. This figure is based on 1-1 1/2 years of treatment, or 120 treatments. The cost includes medication, office visits, light therapy, lab tests and eye exams that are necessary because of the possible damage to the eyes as a result of the light therapy. This figure does not include the patient's loss of work time, or travel expense to obtain treatments. Most insurance companies do not cover the cost of treatment; therefore, many patients are unable to receive proper care for the disease. As a result, some patients have lost their jobs or are unable to obtain work due to their cosmetic disfigurement, especially if the work involves interaction with the general public.

According to the American Academy of Dermatology, lichen planus affects approximately 1% of the general population. It is an inflammatory disease that strikes primarily the skin and mucous membranes. Oral lichen planus typically appears as patches of fine white lines and dots on the tongue, gums, and inside the cheeks. Severe oral lichen planus can cause painful sores and ulcers in the mouth. There is no known cure for oral lichen planus.

The Company also announced the commencement of a consumer awareness marketing and advertising campaign in the Boston Metropolitan area designed to make psoriasis sufferers in the area who are dissatisfied with their current treatment aware of the Company's XTRAC(TM) laser treatment, and the location of dermatologists currently offering the treatment. The Company is primarily focusing the program on the print media, which has already begun, and advertising on local radio stations, which will start in the ensuing weeks. The Company started the commercial launch of the XTRAC(TM) system in the Boston area.

Jeff O'Donnell, President and CEO of PhotoMedex, stated, "We have stated in the past that we believe our patented laser treatment might be efficacious in treating as many as 30 skin diseases, including psoriasis. The new clinical trials we are now conducting with Dr. Taylor at MGH reflects our strategy to establish our XTRAC(TM) system as the predominant treatment for all of these diseases, assuming successful clinical outcomes, as soon as possible. Our target market, the approximately 3,200 dermatologists who perform over 68% of the skin disease treatments in the United States, would welcome, we believe, an expansion of the treatment capabilities of our system from a market share and practice income perspective. Our goal is to have XTRAC(TM) laser therapy provide vitigilo patients with a better outcome, in fewer treatments, and be more cost effective.

Commenting further, Mr. O'Donnell said, "Our new advertising and marketing campaign in the Boston area is designed to make every psoriasis sufferer who reads a newspaper or listens to the radio aware of our treatment and where to go to get the treatment. We are currently launching the XTRAC(TM) system in other targeted markets throughout the United States, and this type of consumer awareness campaign will follow along in a predetermined fashion in each of these markets."

The Company's excimer laser system generating 308-nm UV-B radiation is the first FDA-approved laser treatment for psoriasis, which is the second most common skin disorder in the U.S. The National Psoriasis Foundation estimates that psoriasis afflicts more than 7 million Americans and that between 150,000 and 260,000 new cases are diagnosed each year.

PhotoMedex is engaged in the development of proprietary excimer laser and fiber optic systems and techniques directed toward dermatological applications focusing on psoriasis, and toward the treatment of cardiovascular and vascular disease.

Some paragraphs of this press release, particularly those describing PhotoMedex' strategies, operating expense reductions and business plans, contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended and Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While PhotoMedex is working to achieve those goals, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including difficulties in marketing its products and services, need for capital, competition from other companies and other factors, any of which could have an adverse effect on the business plans of the subsidiary companies of PhotoMedex, its reputation in the industry or its expected financial return from operations. Factors such as these could have an adverse effect on PhotoMedex' results of operations. In light of significant uncertainties inherent in forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by PhotoMedex and its subsidiaries that it will be achieved.