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 HOUSTON, July 6 /PRNewswire/ -- Viral Testing Systems Corporation (AMEX: VTS) announced today that it has acquired Biotel Corp., a privately owned marketer of diabetes, kidney disorders, urinary tract infections and blood glucose home screening tests, which are sold directly to consumers in over 15,000 drug stores nationwide. This acquisition launches VTS into the rapidly growing home healthcare market, and when added to VTS's FLUOROGNOST HIV-1 IFA AIDS test, gives the company a multi-dimensional scope in medical diagnostics. VTS is also the exclusive North and South American distributor of FLUOROGNOST HIV-1 IFA, the only FDA-approved test that can both screen and confirm for HIV and obtain results within 90 minutes.
 "With the addition of Biotel, VTS is now poised to be a significant factor in both consumer and clinical medical diagnostics," said Paul Montle, VTS president and chief executive officer. Home health care, noted Montle, is one of the fastest-growing retail categories and industry sales are expected to reach $2 billion annually within the next decade. One person in every five American households currently uses home diagnostic products.
 VTS was attracted by Biotel's market position and growth since the private company's founding in 1991. Biotel's accurate, easy-to-use and affordably priced products are sold without a prescription in over 15,000 pharmacies nationwide and are ranked in the top quarter of all health and beauty aid sales. Among the many pharmacy chains where the products are available are Walgreens, Rite Aid, CVS, Payless, Revco, Longs, and Drug Emporium.
 Montle said that two additional factors that should promise growth for Biotel's home screening products are concern with sky-rocketing health care costs and recent recommendations for diabetes management: First, preventive medicine and home health maintenance are keys in current discussions about health care reform, since it has been shown that early detection can lead to early medical treatment and avoid hospitalization and other costlier care.
 Second, the VTS acquisition comes on the heels of a landmark study announced in mid-June by the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) that offers great opportunities in the diabetes screening market. The research concluded people with insulin-dependent diabetes should test their levels of blood glucose four to seven times a day and increase their number of insulin shots to keep their blood sugar levels as steady as possible. Fewer fluctuations in the amount of blood glucose can prevent or delay the devastating complications associated with diabetes, such as blindness, kidney disease, heart disease and stroke, the study found.
 While prevention of these diseases could save millions of dollars in long-term medical costs, one concern is the added expense to individuals who usually self-monitor now only once or twice a day. The Biotel Hi- Value Blood Glucose monitoring strips are made with a new patented technology that is faster and more exact, and allows them to be sold for about 30 percent less than other brands. Blood glucose strips, the fastest growing category in all diabetes care products, are predicted to bring in over $1 billion by 1999 and Biotel's pricing and accuracy are expected to attract a large market share. About half of the 14 million Americans with diabetes know they have the disease and 500,000 new diagnoses are made each year.
 In addition to the blood glucose strips, Biotel also markets three urine test strips. Biotel U.T.I. Home Screening Test detects urinary tract infections even before symptoms appear. Equal in sensitivity to urine tests used by private physicians and in hospitals, the strips are proven to be 100 percent effective in detecting Gram-negative infections, which cause 90 percent of all urinary infections. Biotel Kidney Home Screening Test and Biotel Diabetes Home Screening Test are the first products of their kind developed specifically for the consumer market. The kidney test detects blood and protein in the urine, reliable signs of kidney disease or injury. The diabetes test is four times more sensitive than other urine tests and proven 100 percent effective in detecting undiagnosed diabetes.
 The urine screening strips, sold at less than $1 a strip, turn color 30 seconds after being dipped in a urine sample. The user then checks to see if the color on the strip matches the color on the bottle that indicates disease may be present.
 "With Biotel's product quality and management excellence, we are positioned to take a lead in the home health care market," added Montle.
 Under the agreement terms, VTS acquired Biotel for $500,000 in cash, a $1.5 million note due Dec. 31, 1993 and one share of its common stock for each of Biotel's fully diluted equivalent shares of common stock, for a total of 1.7 million VTS shares. VTS will also make a contingent payment in April 1996 based on a formula related to Biotel's 1995 revenues.
 For investor relations information, please contact Viral Testing Systems Corporation, 600 Travis Street, Suite 4750, Houston, Texas 77002; 713-228-4633, Attention: Holly Vaughan.
 -0- 7/6/93
 /CONTACT: Holly Vaughan of Viral Testing Systems Corporation, 713-228-4633/

CO: Viral Testing Systems Corporation; Biotel Corp. ST: Texas IN: HEA SU: TNM

MP-OS -- NY028 -- 8617 07/06/93 12:22 EDT
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Date:Jul 6, 1993

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