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Zila Strengthens Biotechnology Business; Reports on Sufficient OraTest Funding, Adds Experts & Expands Objectives.

Zila, Inc. (NasdaqNM: ZILA) said today that it will have sufficient funding to complete the OraTest clinical trial. Zila also announced that it has strengthened its biotechnology business unit with new leadership and a commitment to develop new applications for its pre-cancer/cancer detection technology.

Zila said its wholly owned subsidiary, Zila Biotechnology, Inc., will expand but maintain focus under the direction of Jeff Morhet, who was appointed Vice President and General Manager of the cancer detection business.

The subsidiary will operate as a comprehensive research, development and licensing business, specializing in pre-cancer/cancer detection through its patented Zila(R) Tolonium Chloride technology. Zila will continue to focus on OraTest, the oral application of its Tolonium Chloride technology, but will also expand into the selective development of other Tolonium Chloride pre-cancer/cancer detection applications. Zila said it plans to partner early on each new application of its technology to avoid or reduce the substantial costs of the required regulatory process.

Sufficient OraTest Clinical Funding Available

Zila recently announced that it expects to receive payment in June of $20 million (approximately $15 million net of expenses) from its settlement with a former provider of services. The proceeds will be a principal source of funding for the Tolonium Chloride and OraTest Programs. Based on recent evaluations, Zila said it believes that the $15 million, along with cash generated internally from its rapidly growing Nutraceuticals business and its broad-based Pharmaceuticals business, will be adequate to fund the OraTest clinical trial to FDA marketing clearance. This should also enable Zila to begin the development and financing of additional applications of its Tolonium Chloride technology.

"Zila now has all of the elements it needs to launch a more comprehensive Tolonium Chloride Program," Morhet said. "Zila Biotechnology will utilize the combined efforts and expertise of our employees, the leading cancer experts on our Medical Advisory Board, and the experience and expertise of our new regulatory consultants to accomplish our OraTest and Tolonium Chloride goals."

New Leadership

Morhet has approximately 15 years experience in the pharmaceutical and medical industry, including positions at Baxter Healthcare's Scientific Products and Biomedical Divisions and various management roles with Merck & Co. and AstraZeneca. He will oversee the expansion of a core staff with advanced medical, scientific, and marketing expertise to develop, gain regulatory approval and license Zila Biotechnology's assets. That team will include two new expert consultants who are former FDA senior staff, and who will assist with the regulatory strategy and clinical operations for OraTest(R) and the Zila(R) Tolonium Chloride program.

World-Class Expertise and Patent Protection

In oral clinical studies at cancer research centers, Zila(R) Tolonium Chloride technology has been shown to selectively stain pre-cancer and cancerous cells. By detecting early cellular abnormalities, oral cancer can be prevented through intervention at the pre-disease state.

A number of leading researchers are supporting Zila's Tolonium Chloride development, including some of the world's most renowned experts in the field of head and neck cancer. Several of these experts have joined with Zila to form its Medical Advisory Board. Zila Medical Advisory Board members are:
 * Dr. David Sidransky, Chairman, Professor of Otolaryngology, Oncology,
 Pathology, Cellular and Molecular Medicine, and Director of Head and
 Neck Cancer Research at Johns Hopkins University. He was cited in Time
 Magazine as "America's Best Oncologist."

 * Dr. Waun Ki Hong, chairman of the Department of Thoracic/Head & Neck
 Medical Oncology, and Division Head, Cancer Medicine-Administration at
 the M.D. Anderson Cancer Center, University of Texas. He recently served
 as President of the prestigious American Association of Cancer Research
 (AACR).

 * Dr. Larry Michaelis, Former Associate Dean of Northwestern University
 Medical School and Chief Medical Officer of Northwestern Memorial
 Hospital.

 * Dr. Sol Silverman, Professor of Oral Medicine at the University of
 California/San Francisco, and member of the UCSF Comprehensive Cancer
 Center.

 * Dr. Wayne Koch, Professor and Director of the Division of Head and Neck
 Surgery and the Head and Neck Fellowship Program at the Johns Hopkins
 Medical Institution, Department of Otolaryngology - Head and Neck
 Surgery.

 * Dr. Joel B. Epstein, Professor and Head, Department of Oral Medicine and
 Diagnostic Sciences, College of Dentistry, and Director,
 Interdisciplinary Program in Oral Cancer, Chicago Cancer Center, College
 of Medicine, University of Illinois at Chicago.

 * Dr. W. Jarrard Goodwin, Jr., Head and Neck surgeon and Director of the
 Sylvester Comprehensive Cancer Center at the University of Miami School
 of Medicine.

 * Dr. Samuel D. Bernal, Attending Physician and Professor of Medicine at
 the UCLA School of Medicine.




In addition, Zila Biotechnology is backed by extensive global patent protection for its technologies. Zila(R) Tolonium Chloride's pre-cancer/cancer detection and treatment technology is covered by 10 U.S. patents and under numerous pending and issued patents in over 40 countries.

Biotechnology Strategy

Morhet emphasized that Zila Biotechnology will be a multi-disciplinary business unit, leveraging multi-pronged regulatory strategies, strong intellectual property rights, and relationships with key partners and international experts to explore a range of Tolonium Chloride products to detect pre-cancer and cancer of the oral cavity, the skin, the cervix and the esophagus. Zila Biotechnology will also cooperate in the development of future products in Zila's Pharmaceutical and Nutraceutical businesses as the Company begins to focus on disease prevention through early detection and enhanced body defense.

"We have long understood that Zila Tolonium Chloride would become more than just a tool for detecting oral cancer," Morhet noted. "Our strategy has always been to address the oral cancer application first, and then selectively pursue others as our resources permit. Now, we are in position to envision a continuing flow of new life-saving products for many kinds of cancer."

Zila Biotechnology plans to develop and license future applications of Zila's Tolonium Chloride technology early in the FDA approval process by targeting the appropriate regulatory and marketing companies in each cancer applications respective field.

Zila said its current focus on OraTest reflects, in part, the incidence of oral cancer. Oral cancer is one of the ten most common cancers in the nation.

Morhet reaffirmed the Company's plan to announce this summer a set of milestones for achieving FDA approval for its OraTest product.

About Zila

Zila, Inc., headquartered in Phoenix, is an international provider of healthcare and biotechnology products for dental/medical professionals and consumers. Zila has three business units:
 * Zila Biotechnology, a research, development and licensing business
 specializing in pre-cancer/cancer detection through its patented Zila(R)
 Tolonium Chloride and OraTest(R) technologies.

 * Zila Nutraceuticals, manufacturer and marketer of Ester-C(R), a branded,
 superior efficacy nutrition product.

 * Zila Pharmaceuticals, "The Oral Soft Tissue Experts" marketing
 ViziLite(TM) oral examination kits, Zilactin(R) OTC oral care products,
 and Peridex(R) prescription periodontal rinse.

 For more information about Zila, visit www.zila.com.




This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based largely on Zila's expectations or forecasts of future events, can be affected by inaccurate assumptions and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the Company's control. Therefore, actual results could differ materially from the forward-looking statements contained herein. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. A wide variety of factors will impact the length, size and expense of the OraTest(R) clinical trial; the FDA's ultimate decision regarding the OraTest(R) product; the limitations on indicated uses for the OraTest(R) product; the ultimate market reception for the OraTest(R) product; Zila's ability to successfully develop, receive FDA approval, obtain financing for and market efficacious products using its Tolonium Chloride technology; Zila's ability to obtain third parties and partners for development and commercial exploitation of such technology; and whether Zila will receive the $20 million settlement payment in June 2003. Participation by the Medical Advisory Board members does not constitute or imply endorsement by their respective universities, hospitals or health systems. There can be no assurance that the forward-looking statements contained in this press release will, in fact, transpire or prove to be accurate. For a more detailed description of these and other cautionary factors that may affect Zila's future results, please refer to Zila's Form 10-K and 10-K/A for its fiscal year ended July 31, 2002, and its Form 10-Q for the quarter ended January 31, 2003, filed with the Securities and Exchange Commission.

CONTACT: Doug Burkett, Ph.D., Zila, Inc., +1-602-266-6700

Web site: http://www.zila.com/
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Date:May 20, 2003
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