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CytoCore Reports Third Quarter Progress.

Pivotal Study of SoftPAP Showed Significant Improvements Over the Spatula/Cytobrush

26% Improvement in False Negatives and 33% Improvements in False Positives

Revenue up 87% Year-Over-Year

CHICAGO -- CytoCore Inc. (OTCBB:CYOE), the developer of a suite of cost-effective cervical cell collection devices for the early detection of cancer and sexually transmitted diseases, today reported its continued progress during the third quarter ended September 30, 2008.

"Last month we announced the efficacy and safety results of our 703 patient clinical trial between the SoftPAP([R]) Collector and the conventional collection technique for PAP sample, the standard Spatula/Cytobrush technique," said Robert McCullough, Jr., Chief Executive Officer of CytoCore, Inc. "SoftPAP showed superiority in sensitivity as reflected in a 26% improvement or reduction in false negatives, an indication where precancerous or cancerous conditions are detected in samples collected using SoftPAP but not detected in samples collected using the Spatula/Cytobrush. SoftPAP also showed superiority in specificity, a 33% improvement or reduction in false positives, an indication where the patient has been inaccurately diagnosed as having a precancerous or cancerous condition. Additionally, one of the sites used in the trial has agreed to sponsor the publication of the SoftPAP trial results and we expect the publications and dissemination of this data should be helpful to our distributors as they introduce SoftPAP to their customers."

Mr. McCullough continued, "In late 2007 and earlier this year, we announced we had signed distribution agreements with five international distributors with the potential to generate approximately $10 million in European revenue during 2008. Although we expect to generate some revenue from the sale of our SoftPAP product during the remainder of the year, we anticipate product sales from these contracts to be minimal in 2008. It appears many of our distributors' customers have deferred purchases of SoftPAP until the clinical trial was finalized and results announced. We initially expected completion of the trials to be finalized by first quarter 2008. Results were not finalized until late September 2008. Due to the revenue delays we have significantly reduced expenses. Company officers have agreed to take compensation reductions up to 66% of salaries."

CytoCore is completing development of its fourth generation Automated Image Proteomic Systems (AIPS), a unique workstation with embedded data management capabilities that provides improved productivity to the lab. AIPS is a unique system designed to be the sole integrated solution that addresses specimen management, visual review, data capture, quality assurance, regulatory compliance and reporting, proficiency testing and other management functions. The Beta version is anticipated to be available during the first quarter of 2009.

"We look for the work station module of the AIPS system to start generating revenue as early as the third quarter of 2009. We are seeing considerable interest in this product from users of the company's prior generation products. A cornerstone of our business model is our focus on leveraging our existing technology to provide higher sensitivity for the screening of cancer. We continue development of our proprietary cytological cervical and endometrial cancer screening assays for use in conjunction with the AIPS platform. A patent application for the company's assays has been filed. We believe these assays will significantly improve the time needed for more effective cancer screening," Mr. McCullough continued.

"We remain excited about our prospects as we continue our evolution with the recent announcement of superior clinical results from our pivotal SoftPAP study. We believe the SoftPAP collector offers fast, more accurate specimen collection with less possibility for user error and has the potential of becoming the standard of care for the early detection of a number of significant health care issues including cancer and sexually transmitted diseases that are pervasive around the world," Mr. McCullough concluded.

Financial Highlights for the Third Quarter Ended September 30, 2008

Revenues increased $13,000, or 87% to $28,000 compared with $15,000 in the same period last year. This increase was the result of sales of the company's SoftPAP cervical collection device totaling $14,000, partially offset by a reduction in revenue of $1,000 from the licensing fees for slide-based installed systems.

Selling, general and administrative expenses increased 13% to $1.2 million compared with $1.0 million in the third quarter of 2007. Of the $139,000 increase, $33,000 relates to a non-cash charge for the amortization of a license.

Net loss for the quarter, before preferred dividends, decreased 2% to $1.5 million compared with $1.6 million in the same period in 2007. This decrease was the result of decreases in research and development, partially offset by higher sales, general and administrative expenses.

About CytoCore Inc.

CytoCore develops cost-effective, highly accurate screening systems for early detection of gynecological cancers and sexually transmitted diseases. Designed for easy deployment at a laboratory or at the point-of-care, the CytoCore suite of sample collection technologies assists in the detection of cervical, endometrial, and other cancers, as well as the human Papilloma virus. The CytoCore Solutions[TM] System is being developed to provide medical practitioners with highly accurate, low-cost, cervical and uterine cancer screening systems that can be seamlessly integrated into existing medical models. More information is available at: www.CytoCoreInc.com.

Certain statements in this release are forward-looking. These statements are based on CytoCore's current expectations and involve many risks and uncertainties, such as the company's inability to obtain sufficient financing, the possibility that clinical trials will not substantiate CytoCore's expectations with respect to the CytoCore Solutions[TM] System, and other factors set forth in reports and documents filed by CytoCore with the Securities and Exchange Commission. Actual results may differ materially from CytoCore's current expectation depending upon a number of factors affecting the Company's business. These factors include, among others, risks and uncertainties detailed in the Company's periodic public filings with the Securities and Exchange Commission, including but not limited to the Company's Annual Report on Form 10-KSB for the year ended December 31, 2007. Except as expressly required by law, CytoCore undertakes no obligation to publicly update or revise any forward-looking statements contained herein.
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Publication:Business Wire
Article Type:Financial report
Date:Nov 11, 2008
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