Tuesday May 1, 2001

COMPANY PRESS RELEASE

Transgenomic, Inc. Signs Agreement to Acquire Annovis, Inc.

OMAHA, Neb., SAN JOSE, Calif., and ASTON, Pa., May 1 /PRNewswire/ -- Transgenomic, Inc. (Nasdaq: TBIO) and Annovis, Inc. announced today that Transgenomic has signed an agreement to acquire Annovis for approximately 1.9 million shares of Transgenomic's common stock and cash of approximately $500,000. It is intended that the transaction be accounted for as a purchase transaction and is expected to close within 30 days.

Annovis is a privately held specialty chemicals company that develops, manufactures and markets a wide variety of nucleic acid-based products and services for the life sciences sector. The company's core business consists of nucleic acid building blocks ("phosphoramidites"), fluorescent markers and dyes and associated reagents. In addition, Annovis has applied its expertise and market-leading presence in nucleic acid technology to become a principle provider of oligomimetics and specialty chemicals. Oligomimetics are chemically modified DNA and RNA molecules exhibiting proven enhancements in stability, bioavailability, specificity and efficacy making them excellent candidates for use in clinical applications such as genetic diagnostics and therapeutics. Oligomimetics also exhibit higher affinity and specificity than regular DNA making them excellent candidates for DNA diagnostics and chip technology. The company has also utilized its expertise related to central nervous system research to develop potential therapeutics based on glutamate receptors.

"The addition of Annovis to Transgenomic is a positive strategic move for our company," said Collin D'Silva, chairman and chief executive officer of Transgenomic. "Through this acquisition we continue to build our core competency set which will better enable us to provide total solutions to our customers. Equally as important as Annovis' technology is the talented employee base they bring to our company. About 30 percent of Annovis' approximately 70 employees hold Ph.D.'s."

"Synergies between our technologies will provide an opportunity to develop new products and solutions for our customers and to drive growth for our combined company," added D'Silva. "This is an exciting event for our customers, employees and shareholders."

Maria-Luisa Maccecchini, Ph.D., founder and chief executive officer of Annovis, said, "Transgenomic is an ideal fit with the capabilities and technology base Annovis has created. Annovis' oligomimetics expertise, coupled with Transgenomic's WAVE® System, will make the company a major player in the DNA diagnostic business. Plus, access to the Transgenomic global distribution infrastructure, its proven platform strategy and extensive customer base provides us with a significant opportunity to leverage our market potential."

Dr. Maccecchini has served as Annovis' chief executive officer and as a member of its board of directors since she founded the company in 1991. Prior to founding the company, Dr. Maccecchini was founder and general manager of Bachem Bioscience, Inc. and was in charge of the molecular biology laboratory at IMC Corporation (now Mallinckrodt Inc., recently purchased by Tyco International Ltd.). She is experienced in science and biotechnology and is knowledgeable in new product discovery, development and commercialization.

For the remainder of 2001, Annovis will operate as a wholly owned subsidiary. This acquisition is expected to add approximately $6 million of revenue during the remainder of 2001 and more than $12 million of revenue in 2002. With a quarter for business integration, the benefit of the additional revenue will be seen primarily in the third and fourth quarters of 2001. Excluding the effect of acquisition costs and intangible amortization expense, there is expected to be no material effect on earnings for the remainder of 2001 and a positive contribution to earnings in 2002.

The principal shareholder and primary funding source for research and development for Annovis has been S.R. One, Limited, a subsidiary of GlaxoSmithKline. "We see this as an opportunity to realize a return on our investment through the accelerating future growth of Transgenomic," said John Braca, chief financial officer at S.R. One.

The Annovis acquisition will increase the percentage of Transgenomic's revenues from consumables. Consumable sales should exceed 30 percent of total revenues in 2001 and continue to be an even greater proportion of future total revenues.

About Transgenomic

Transgenomic provides versatile and innovative research tools and related consumable products to the life sciences industry. Its WAVE® nucleic acid fragment analysis system can be used for variation detection, size-based double-strand DNA separation and analysis, single-strand DNA separation and analysis and DNA purification. When used for variation detection, these tools enable researchers to discover and understand variation in the human genetic code, or genome, in order to accelerate and improve drug development and diagnostics. Transgenomic believes the WAVE System will become a leading tool to analyze genetic variations as it allows researchers to analyze both known and unknown genetic variations faster, with more accuracy and at a lower cost than other commercially available techniques.

Forward Looking Statement

The statements in this press release regarding projected results are preliminary and "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, this press release contains other forward-looking statements regarding Transgenomic's or third parties' expectations, predictions, views, opportunities, plans, beliefs and statements of similar effect. The forward-looking statements in this press release are subject to a variety of risks and uncertainties. Actual results could differ materially. Factors that could cause actual results to differ include but are not limited to the following:

Transgenomic will continue to derive a substantial majority of its total revenues from the sale of its WAVE System and related services and consumables. Any reduction in demand for, or increase in competition with respect to, WAVE Systems and related products would have a material adverse effect on Transgenomic's financial condition and results of operations.

Transgenomic's business is concentrated in the life sciences industry making it susceptible to a downturn in that industry.

Fluctuations in quarterly operating results may result in volatility in Transgenomic's stock price. No assurance can be given that operating results will not vary. Transgenomic's stock price may also be volatile, in part due to external factors such as announcements by third parties or competitors, inherent volatility in the life sciences sector and changing market conditions in the industry.

For a detailed discussion of these and other risk factors, interested parties should review Transgenomic, Inc.'s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2000. Transgenomic's objectives and expectations, predictions, beliefs, plans and strategies relating to the acquisition of Annovis, Inc. are subject to numerous additional factors and risks, including but not limited to the following: (i) Annovis is in a highly competitive industry and the combined entity may not be successful against more established competitors; (ii) Annovis has not been consistently profitable in the past and may not achieve consistent profitability; (iii) with rapid developments in technology and of competitive products and technologies, Annovis' products may become obsolete before achieving significant revenues and the markets may not achieve the predicted growth rates; (iv) Transgenomic will incur significant expenses and devote significant management time and other resources in assimilating and integrating Annovis which could have a material adverse effect on Transgenomic operations and financial results; (v) Annovis' products, personnel, and operations may be difficult to combine with those of Transgenomic; (vii) the amortization of intangible assets will have an adverse effect on future earnings; and (viii) Transgenomic may incur undisclosed liabilities with respect to Annovis. The strategies and synergies that are the objects of the acquisition depend on numerous factors and there can be no assurance that these factors will materialize, that Transgenomic will implement any aspect of the strategies, or that if implemented the strategies will be successful or the synergies achieved.

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