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EPITOPE SUES BROKER/ANALYST FOR DEFAMATION, SECURITIES FRAUD AND STOCK MANIPULATION

 BEAVERTON, Ore., Oct. 1 /PRNewswire/ -- Epitope Inc. (AMEX: EPT), announced it has filed a lawsuit in U.S. District Court in Portland, Ore., against A. Karl Kipke, a vice president of Kidder, Peabody & Co. in Kansas City, Mo., alleging defamation, manipulation of securities prices, securities fraud and intentional interference with business relations.
 The suit, filed Sept. 30, alleges that Kipke used a false name, William Smith, to log onto a Prodigy Services Co. electronic bulletin board on three occasions during August 1993. On each occasion, the lawsuit alleges, Kipke wrote lengthy commentaries that he knew were false and defamatory about Epitope, the company's management practices and its efforts to secure Food and Drug Administration (FDA) approval for its OraSure(R) oral specimen collection device for use in the detection of the AIDS virus. The purpose, the complaint said, was to drive down the price of Epitope stock so that Kipke and his clients -- holders of short positions in Epitope stock -- would profit. The company asks the court to award punitive damages of $5 million.
 "It has been our belief for more than a year that holders of short positions and others who stand to benefit financially by a decline in Epitope's fortunes have pursued an active effort to discredit the company," said Adolph J. Ferro, Epitope's president and chief executive officer. "The intensity of these attacks has accelerated recently. It is all too easy for unsuspecting investors to be taken in by false and malicious attacks that have the appearance of integrity, but are based on rumor, lies and distortions."
 The complaint alleges that Kipke, using the William Smith alias, posted anti-Epitope notices on the Prodigy "Money Talk" bulletin board on Aug. 2, 4 and 19. Among other things, those postings contained a series of statements that Kipke knew to be false, it says. Among the false statements were the claims that Epitope sold shares to a New Jersey dentist at less than one-tenth its market value in exchange for illegal promotion of the company; that the FDA would issue a warning letter requiring Epitope to cease all U.S. sales of OraSure; that the company granted to its former Mexican distributor warrants to purchase 100,000 shares at about half the market price; that the company had granted more than one million shares of its stock to dentists, Mexican businessmen and financial advisors; that the company's American Stock Exchange specialist had sold all of his Epitope shares; and that the FDA had prohibited use of OraSure for the detection of cotinine.
 The complaint says that each of those allegations was materially false and misleading. "Prior to and during the time that the defendant was causing these false articles to be published on Prodigy to a national audience, defendant Kipke was actively encouraging his clients to sell Epitope shares," the complaint says. "...Kipke, individually and on behalf of his clients, held short positions in Epitope shares at the time that he submitted the articles...to Prodigy for publication."
 These actions constitute defamation of the company, illegal manipulation of the price of Epitope stock and illegal interference with Epitope's business relationships, the complaint says.
 Epitope is a biotechnology company that develops and markets medical diagnostic products, superior plant varieties and the Fresche Blossoms(TM) brand of long-lasting fresh flowers.
 -0- 10/1/93
 /CONTACT: Mary Hagen of Epitope, 503-641-6115; or Steve Weiner of Read Moore Communications, 503-641-6115 or 708-771-9101, for Epitope/
 (EPT)


CO: Epitope Inc. ST: Oregon, Missouri IN: MTC SU:

JH-RB -- SE010 -- 8023 10/01/93 21:43 EDT
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Publication:PR Newswire
Date:Oct 1, 1993
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