Tuesday October 31, 2000

COMPANY PRESS RELEASE

Transgenomic, Inc. Reports Record Third Quarter Revenues

Quarterly and Year-to-Date Life Science Revenues Up 68 Percent From The Comparable Periods in 1999

SAN JOSE, Calif., and OMAHA, Neb., Oct. 31 /PRNewswire/ -- Transgenomic, Inc. (Nasdaq:TBIO) today announced financial results for the quarter and nine months ended September 30, 2000. The company's historical financial results, which are presented in the tables below, include results of non-life science products through March 31, 2000. The company sold the assets related to the non-life science products as of that date.

Life sciences revenues for the third quarter of 2000 reached a record $6.25 million, up 68 percent over comparable revenues from third quarter 1999. Revenue growth was fueled by increased demand from both research centers and commercial entities.

"Transgenomic's performance exceeded our expectations for the quarter and for the first nine months of the year," said Collin D'Silva, CEO. "In addition to our year over year growth, our life science revenues grew approximately 12 percent from the second to the third quarter 2000. Our strategy of marketing our WAVE(R) system into the commercial and industrial market segment during the third quarter contributed to our growth. We believe sales for commercial and industrial applications will continue to be a growth catalyst for us.

"During the third quarter we introduced, on schedule, our dual plate auto sampler. This WAVE(R) system enhancement allows for more efficient sample analysis by allowing overnight, unattended system operation," said D'Silva. "By increasing the samples that can be analyzed we expect demand for our proprietary consumable products to increase.

"As previously announced, breast cancer researchers at the University of Vienna demonstrated that the WAVE(R) system, using DHPLC (denaturing high performance liquid chromatography) technology, is as accurate as traditional approaches such as DNA sequencing, but is much faster and far less expensive," said D'Silva. "These findings are a significant validation of the WAVE(R) system as a highly accurate, rapid and cost-effective method for genetic screening."

Life Sciences Financial Results

Third quarter revenues increased 68 percent from $3.7 million in 1999 to $6.2 million in 2000. The net loss for the quarter was $2.1 million, or $0.11 per share, compared to a net loss of $2.2 million, or $0.17 per share, in 1999. Losses from operations have declined sequentially each quarter during 2000 to $2.1 million in the third quarter from $2.4 million in the first quarter and $2.3 million in the second quarter.

For the nine months ended September 30, 2000, revenues increased 68 percent from $9.9 million in 1999 to $16.6 million in 2000. The net loss was $7.6 million, or $0.51 per share, as compared to a net loss of $7.9 million, or $0.61 per share, for the same period in 1999.

In addition to the successful completion of its initial public offering, the company eliminated all debt from its balance sheet during the quarter. In August, the company forced conversion of its $12 million convertible notes into approximately 2,751,000 shares of common stock. Prior to the forced conversion and triggered by the completion of the initial public offering, the company was required to take an additional interest charge on the notes reflecting the acceleration of interest in the amount of approximately $800,000, or $0.04 per share.

About Transgenomic

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(R) System will become a leading tool to analyze genetic mutations. The WAVE(R) 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(R) 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(R) 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.

Forward-Looking Statement

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 statements contained in this press release.