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BAXTER DIAGNOSTICS INC., ENTERS INTO STRATEGIC CARDIAC DIAGNOSTIC ALLIANCE WITH SPECTRAL DIAGNOSTICS INC. AND PLANS FOR EQUITY INVESTMENT

 TORONTO, June 29 /PRNewswire/ -- Spectral Diagnostics Inc. (NASDAQ: DIAGF) announced today the signing of a letter of intent to form a Strategic Cardiac Diagnostic Alliance in research and marketing with Baxter Diagnostics Inc., a subsidiary of Baxter International (NYSE: BAX). The letter of intent permits up to a 15 percent equity investment in Spectral by Baxter estimated to aggregate approximately US$17 million.
 The Baxter/Spectral Strategic Cardiac Diagnostic Alliance is an affirmation of these companies' commitment to cardiac diagnostic research and development and the introduction of new, innovative and cost saving products in the area of cardiac diagnostics.
 In exchange for providing its extensive distribution capabilities and marketing expertise, Baxter obtains the exclusive rights in North and South America to one of Spectral's Cardiac Panel Tests and the exclusive right of first offer for distribution rights for Europe and the United Kingdom as products become available. Baxter shall have an exclusive right of first offer for all diagnostic products developed by Spectral other than under specific development agreements.
 In addition to the distribution agreement, Baxter may acquire up to a maximum aggregate of 15 percent of the outstanding common shares of Spectral on a fully diluted basis. On closing, Baxter will pay an initial US$1 million to obtain common shares of Spectral and will acquire warrants to purchase additional common shares of Spectral. Spectral shall have the right to require an additional US$3,200,000 investment by Baxter upon certain milestones being accomplished.
 In making the announcement, Douglas C. Bail, chairman and CEO, Spectral Diagnostics Inc., said, "We are pleased and honored that Baxter Diagnostics and its Stratus Immunochemistry Division, a world class organization and leader in cardiac diagnostics, has elected to make a significant investment in the company as our partner in the marketing of the Panel Test. We anticipate that this alliance with Baxter will assist in the furtherance of our on-going cardiac diagnostic research at Spectral in support of the next generations of cardiac diagnostics and Panel Tests."
 Mr. Lee D. Flowers, president, Stratus Immunochemistry Division said "Stratus and its system of automated diagnostics is a leader in the area of cardiac diagnostics. Our objective with the collaboration of Spectral and others, is to create a cardiac diagnostic franchise second to none."
 Baxter is the world's leading manufacturer and marketer of health- care products and services for use in hospitals and other health-care settings. The company offers 120,000 products to health-care providers in over 100 countries.
 Stratus is one of the leaders in cardiac diagnostic medicine. The Stratus system of automated diagnostics is based on immunochemistry that uses antibodies - unique proteins produced by the immune system in response to foreign substances in the blood - to diagnose various physical conditions. The Stratus automated diagnostic system can lower costs and increase laboratory efficiencies at a time when laboratories are challenged to produce test results faster and more efficiently, while tightly managing costs.
 Spectral has developed a systems approach to cardiac diagnostics. Located at its Toronto laboratories, Spectral Diagnostics Inc.'s 28 scientists and support staff is entirely focused on cardiac diagnostic research and development that will result in new and novel products aimed at improving health care and containing health care costs. In Spectral's systems approach to cardiac diagnostics, patient care and care giver needs are matched from the point of entry into the health care system through to discharge.
 Resulting from Spectral's cardiac diagnostic research and development, is a complete range of cardiac proteins and antibodies that are continually being enhanced according to characteristics of specificity and sensitivity along with greater clinical and prognostic utility in cardiac patient care. Spectral's cardiac antibodies have been designed for a variety of delivery platforms ranging from its rapid format Panel Tests used at the entry point of patients into the health care system, to automated diagnostic systems used to monitor cardiac patients progress through to discharge.
 The Panel Tests will be manufactured using Spectral's antibodies by Princeton BioMedica Inc. (Princeton, N.J.), an independent manufacturer of panel tests with proprietary know-how and technology in the area of membrane technology. Princeton sells non-cardiac panel tests into 26 countries.
 The Panel Tests contain one or more of the cardiac markers Myoglobin, CK-MB, Myosin Light Chain and Troponin-I. The Panel Tests, slightly larger than a credit card, are easy to use, require only a few drops of the patient's blood and provide a diagnosis in approximately 8 minutes.
 Clinical trials evaluating Spectral's Panel Tests are in progress at two leading Canadian teaching hospitals. Spectral's believes that the Panel Test containing Myoglobin, Myosin Light Chain, CK-MB and Troponin- I will, for the first time, diagnose and distinguish, within several minutes, heart from non-heart ailments and unstable angina from heart attack.
 Beta-site clinical trials have also been arranged at five leading teaching hospitals located in the United States that will begin in the second half of calendar 1993. At least another 30 hospitals located in numerous industrialized countries have expressed an interest in conducting beta-site clinical trials with the company.
 Spectral's common shares are listed on the NASDAQ Exchange in the United States and the Canadian Dealing Network in Canada. Spectral Diagnostic Inc.'s trading symbols are DIAGF(common shares) and DIAGWF (redeemable warrants) on the NASDAQ Exchange and SPTR (common shares) and SPTR.WT (redeemable warrants) on the Canadian Dealing Network.
 -0- 6/29/93
 /CONTACT: Douglas C. Ball, chairman and chief executive officer of Spectral Diagnostics Inc., 416-626-3233; or Irving L. Straus, chairman of Straus Corporate Communications, 212-768-2477, for Diagnostics Inc./
 (DIAGF BAX)


CO: Spectral Diagnostics Inc.; Diagnostics Inc. ST: Ontario IN: MTC SU:

WB-OS -- NY037 -- 6697 06/29/93 12:20 EDT
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