Tuesday August 15, 2000

COMPANY PRESS RELEASE

Transgenomic, Inc. Reports Second Quarter Financial Results

Quarterly and Year-To-Date Life Science Revenues Up Over 60% as Compared To Revenues For The Comparable Periods in 1999

SAN JOSE, CA and OMAHA, NE, August 15, 2000 -- Transgenomic, Inc. (Nasdaq:TBIO) today announced its financial results for the quarter and six months ended June 30, 2000. In addition to historical financial results, we are reporting financial results for the six months ended June 30, 2000 on a Pro forma basis to reflect the sale of the assets of our non-life science instrument product line which became effective as of April 1, 2000. These Pro forma results reflect our results for that period as if the asset sale had occurred on January 1, 1999. Comparisons to 1999 are presented on both a Pro forma and historical basis.

Second quarter revenues increased 61% to $5.6 million, as compared to Pro forma revenues of $3.5 million for the same period in 1999. The net loss for the quarter was $2.7 million or $0.21 per share as compared to a Pro forma net loss of $4.3 million or $0.33 per share in 1999. For the 6 months ended June 30, 2000, Pro forma revenues increased 68% to $10.4 million as compared to $6.2 million in 1999. The Pro forma net loss was $5.5 million or $0.43 per share as compared to a Pro forma net loss of $5.7 million or $0.43 per share for the same period in 1999.

Our historical financial results include the results of our non-life science instrument product line in 1999 and the first quarter of 2000. On this basis, second quarter revenues decreased to $5.6 million as compared to $6.1 million in 1999. The company reported a net loss of $2.7 million or $0.21 per share for the quarter as compared to a net loss of $4.0 million or $0.31 per share for the same quarter last year. For the first six months of 2000, revenues increased to $12.5 million from $11.3 million in 1999. The company reported a net loss of $6.2 million or $0.48 per share as compared to a net loss of $5.0 million or $0.38 per share for the same period in 1999. There were no income taxes recorded in the second quarter as compared to income tax expense of $2.5 million recorded in 1999. The income tax expense recorded in 1999 reflects the establishment of a valuation allowance offsetting previously recorded deferred tax assets.

All earnings per share amounts presented have been calculated using our actual shares outstanding for the periods presented. As such, the number of shares does not include the shares issued as part of our Initial Public Offering which closed on July 21, 2000, or shares which could be issued for convertible notes, warrants or outstanding stock options. If all these shares had been issued we would have had approximately 23 million shares outstanding.

"Transgenomic's performance exceeded our expectations for the quarter and for the first half of the year" said Collin D'Silva, CEO. "In addition to our year over year growth, our life science revenues grew in excess of 15% from first quarter to second quarter 2000. We believe these results validate our business model. Additionally, the sale of our non-life science product line has allowed us to focus on our core business and also will result in a pre-tax gain of approximately $0.9 million." The gain on the sale of the non-life science product line has been deferred until such time as all cash has been received from the acquirer.

"In the second quarter we began our market expansion into commercial applications in addition to our traditional governmental and academic research customer base" said Mr. D'Silva. "We expect this market expansion to provide a significant contribution to our growth."

"As a result of our Initial Public Offering, our balance sheet has been strengthened significantly", said Mr. D'Silva. "We raised approximately $69.9 million net of expenses which will enable us to continue building our sales and research and development efforts which are critical to our continued success." A portion of the net proceeds of the offering was used to eliminate debt. The remaining proceeds will be utilized for general corporate purposes and are currently invested in short-term instruments.

Transgenomic provides innovative research tools to the genomics segment of the life sciences industry. 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. We believe our WAVE System will become a leading tool to analyze genetic mutations. The WAVE System allows researchers to analyze both known and unknown genetic mutations faster, with more accuracy and at a lower cost than other commercially available techniques.

As efforts to sequence the human genome near completion, understanding variations in the genetic sequence, or mutation analysis, is becoming the vital link to the development of new diagnostic and therapeutic products. By comparing genetic mutations in the genome to the occurrence of diseases or particular traits, correlation can be made between genes and specific diseases or traits. The WAVE System, unlike tools employing more conventional technologies, can detect these genetic mutations without previous knowledge of their existence or position. As a result, the WAVE System provides researchers a more accurate and efficient means of performing the experiments necessary to identify mutations and to correlate the relationships between mutations and diseases.

This press release may contain forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance and financial results. Such statements are subject to certain factors, risks and uncertainties described from time to time in Transgenomic, Inc.'s reports to the Securities and Exchange Commission. Any change in such factors, risks and uncertainties may cause the actual results, events and performance to differ materially from those referred to in such statements. Accordingly, the company claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 with respect to all such statements.

SOURCE: Transgenomic, Inc.
For confirmation of release or further information contact:
Investor Relations
Transgenomic, Inc.
402-738-5437
Fax: 402-733-1264
E-mail: info@transgenomic.com