Neoprobe Reports 2008 Results

For the fourth quarter of 2008, Neoprobe had a net loss of $1.2 million or $0.02 per share compared to a net loss of $1.9 million or $0.03 per share for the fourth quarter of 2007. Neoprobe’s loss from operations for the fourth quarter of 2008 was $755,000 compared to $272,000 for the fourth quarter of 2007. Neoprobe’s loss from operations for the fiscal year ended December 31, 2008 was $3.0 million compared to $1.8 million for fiscal 2007.

Neoprobe reported record revenues from its wholesale medical device businesses of $7.9 million for 2008 compared to $7.1 million in 2007. The improvement in annual revenue from its medical device lines in 2008 reflects an $816,000 (12%) increase in revenue from its gamma device products to $7.6 million in 2008, compared to $6.8 million in 2007. The growth of the gamma device business was fueled by the launch of two improved device products during 2008; the neoprobe® GDS control unit and a wireless laparoscopic probe. The growth in the gamma device business offset a $55,000 decline in revenue from the blood flow device business from the prior year. For the fourth quarter of 2008, overall device revenues topped the $2.0 million mark, a 9% increase compared to the fourth quarter of 2007. Gross profit for 2008 increased $936,000 (24%) as compared to 2007. The increase was primarily the result of improved margin related to the 2008 product launches coupled with decreased warranty and obsolescence-related costs offsetting minor price declines related to some gamma detection products.

Neoprobe’s operating expenses increased $2.2 million (39%) to $7.9 million for 2008 compared to $5.7 million in 2007. The primary reason for the increase was a $1.4 million increase in research and development expenses related to the Lymphoseek® development initiative as the costs related to the conduct of the Phase 3 clinical trial conducted in 2008 were higher than the costs of the Phase 2 trial conducted in 2007. In addition, Lymphoseek development costs included increased drug production and validation costs in 2008 as compared to 2007. General and administrative expenses increased $575,000 in 2008 over 2007 due primarily to higher corporate governance costs, investment and investor related activities and travel expenses in support of drug development and commercialization activities.

Following are some of the development and investment milestones achieved by Neoprobe in 2008:

Initiated patient enrollment in a Phase 3 clinical study to evaluate the efficacy of Lymphoseek in patients with breast cancer or melanoma.

Submitted a protocol design for a second Phase 3 clinical study to evaluate the efficacy of Lymphoseek as a sentinel lymph node tracing agent in patients with head and neck squamous cell carcinoma to FDA and the EMEA and received a positive protocol assessment from the EMEA.

Received a positive response on a regulatory pathway and a Phase 3 clinical trial design for RIGScan CR with regulatory authorities in the EU under the scientific review process.

Completed $6 million in investments from Platinum-Montaur Life Sciences LLC (Montaur). The closings represented the second and third tranches of a total $13 million investment received from Montaur since December of 2007. The third closing of the investment occurred following notification to Montaur of results from the first 135 lymph nodes tested in a Phase 3 clinical trial for Lymphoseek in patients with breast cancer or melanoma.

Introduced an enhanced neoprobe GDS gamma detection system control unit.

Introduced a wireless version of a laparoscopic gamma detection probe based on Bluetooth technology.

“We saw a number of positive results from our oncology medical device product line and our radiopharmaceutical drug development initiatives in 2008,” said David Bupp, Neoprobe’s president and chief executive officer. “Our gamma device performance for the year exceeded our expectations and we achieved several significant milestones from our radiopharmaceutical development efforts.” Bupp continued, “While we expect current economic conditions will make 2009 a challenging year we look forward to further positive developments in 2009. The clinical studies for Lymphoseek are achieving positive results and the positive response from the European regulatory authority has provided a feasible development pathway for RIGScan CR. We expect to announce top-line data for the first Phase 3 trial in patients with breast cancer or melanoma shortly, to be followed by other important announcements relative to the Lymphoseek and RIGScan CR programs.”