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DRUG SCREENING SYSTEMS REPORTS FIRST QUARTER RESULTS; BARBITURATE TEST CLEARED FOR MARKETING BY FDA; CLASS ACTION INSTITUTED

 BLACKWOOD, N.J., Nov. 16 /PRNewswire/ -- Drug Screening Systems, Inc. (NASDAQ: DRUG) today reported results for the first quarter ended Sept. 30, 1993.
 The company had a first quarter net loss of $378,033 or 23 cents per share on revenues of $505,358 compared to a net loss of $939,082 or $1.06 per share on revenues of $299,915 for the same period last year.
 "Sales for the first fiscal quarter increased 68.5 percent over the comparable quarter of the prior year, while operating costs were reduced to their lowest level in two years as the full effect of the company's cost reduction program took effect. Although we expect our operating costs to continue at this lower rate, a significant increase in sales is necessary to operate on a profitable basis," Gary Nacht, senior vice president and chief financial officer, said.
 The company also announced that its proprietary on-site screening test for barbiturates has been "cleared for marketing" by the U.S. Food and Drug Administration (FDA) and will be marketed, together with the company's other tests for drugs of abuse, in the United States, Europe, South America, the Middle East and Far East by the company's distributors and sales representatives.
 The 510(k) application the company submitted to FDA included an independent clinical evaluation conducted by the Toxicology Laboratory of the Hospital of the University of Pennsylvania. Results of the clinical evaluation indicated that, as with the company's tests for opiates, cocaine, methamphetamine, cannabinoid (marijuana) and PCP (phencyclidine), which were previously cleared for marketing by the FDA, the reliability and sensitivity of the company's test to detect barbiturates in human urine equaled or exceeded that of conventional laboratory screening tests.
 "The addition of a barbiturate test to our product line, which now encompasses six of the most common drugs of abuse, enhances the products' marketability," Patrick Byrne, chief operating officer, said. "A significant increase in sales into the clinical market where this test will be primarily sold, however, isn't likely to occur until additional tests for amphetamine, benzodiazepine and methadone are also available. The company's amphetamine test was submitted to FDA in mid-October. Development of tests for benzodiazepine and methadone is already under way," he added.
 In addition, the company reported that the alleged owners of 30 shares of the common stock will seek to have a class certified consisting of any shareholders who purchased the common stock during the period Jan. 27, 1992 and Sept. 28, 1992. The company indicated that the complaint alleges that the defendants issued affirmative statements in press releases and other documents (including quarterly reports under the Securities Exchange Act) during the "class period" as to the prospects of the company for which there was no reasonable basis, with the intention of inflating the market price of the common stock and that these allegedly false statements constituted a violation of Section 10(b) of the Securities Exchange Act, Rule 10b-5 promulgated thereunder and "common law fraud." The complaint seeks damages for the class in an amount to be determined at trial. The defendants believe the allegations are without merit and have indicated their intention to defend the action vigorously. Counsel has been requested to review the complaint and to take appropriate action on their behalf.
 Drug Screening Systems is a biochemical diagnostic company engaged in the development, manufacture and marketing of on-site diagnostic tests for drugs of abuse. The company's patented products are currently sold under the trademarks MACH IV SCREEN(R) and microLINE(R) SCREEN in the United States and throughout Europe, South America and the Middle and Far East through distributors and sales agents.
 DRUG SCREENING SYSTEMS, INC.
 Comparative Analysis (Unaudited)
 For the three months ended
 9/30/93 9/30/92
 Revenues $505,358 $299,915
 Net loss (378,033) (939,082)
 Net loss per share ($.23) ($1.06)
 Average shares outstanding 1,627,600 889,380
 -0- 11/16/93
 /CONTACT: Gary Nacht of Drug Screening Systems, 609-228-8500/
 (DRUG)


CO: Drug Screening Systems, Inc. ST: New Jersey IN: MTC SU: ERN PDT

LG-MP -- NY077 -- 5156 11/16/93 14:31 EST
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Date:Nov 16, 1993
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