Wednesday January 31, 2001

COMPANY PRESS RELEASE

Transgenomic, Inc. Reports Record Fourth Quarter Revenues

Quarterly and Year-To-Date Life Science Revenues Up Over 60 Percent From the Comparable 1999 Periods

SAN JOSE, Calif. and OMAHA, Neb., Jan. 31 /PRNewswire/ -- Transgenomic, Inc. (Nasdaq:TBIO) today announced financial results for the quarter and 12 months ended December 31, 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.

( Photo: http://www.newscom.com/cgi-bin/prnh/20000314/CGTU026 )

Life sciences revenues for the fourth quarter of 2000 reached a record $7.1 million, 63 percent greater than life sciences revenues for the fourth quarter of 1999. Revenue growth was fueled by increased demand from existing customers and new commercial/industrial entities. The net loss for the quarter was $374,000, or $0.02 per share. This included a one-time gain, net of taxes, of $604,000 related to the sale of the assets of the non-life sciences product line.

"Transgenomic's fourth quarter results are further evidence of the validation of our technology as an essential tool for the genomics community," said Collin D'Silva, chief executive officer. "During the quarter approximately 20 percent of the units sold specifically for variation detection applications went to existing customers. In addition, strong fourth quarter sales to commercial accounts helped that category represent approximately 25 percent of total installations for the year. These results demonstrate our success with utilizing a single platform to provide solutions for multiple applications." D'Silva added that among the customers for the quarter were several leading biotech and pharmaceutical entities.

In speaking of results from a sequential perspective, D'Silva commented that, "In addition to the year over year growth, our fourth quarter revenues grew over 13 percent from the third quarter. This marked the seventh consecutive quarter of life sciences revenue growth for the company." Regarding the year as a whole, he added: "We are pleased to have achieved a number of key milestones, including more than doubling the number of installed instruments, entering new geographical markets, providing more system extensions for commercial applications, and successfully completing our Initial Public Offering. The 2000 achievements position us to expand our technology's applicability to help solve fundamental problems in life sciences research."

Life Sciences Financial Results

Fourth quarter revenues increased 63 percent from $4.3 million in 1999 to $7.1 million in 2000. The net loss for the quarter was $374,000, or $0.02 per share, compared to a net loss of $2.2 million, or $0.17 per share, in 1999. Losses from operations declined sequentially each quarter during 2000 to $2.06 million in the fourth quarter, excluding the recognized gain on sale of the non-life sciences assets. Losses from operations were $2.36 million in the first quarter, $2.27 million in the second quarter, and $2.12 million in the third quarter.

For the 12 months ended December 31, 2000, revenues increased 67 percent from $14.2 million in 1999 to $23.7 million in 2000. The net loss was $8.0 million, or $0.48 per share, compared to a net loss of $10.1 million, or $0.78 per share, for the same period in 1999.

During the fourth quarter, the company recognized a gain of approximately $604,000, net of taxes, on a second quarter sale of its non-life sciences product line. This gain was triggered by receiving payment in full from the purchaser. The effect of this gain reduced fourth quarter and 12-month loss per share amounts by $0.03 and $0.04, respectively.

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® 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 and annotate 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.

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, including our registration statements on Form S-1 filed by us in connection with offerings of our common stock, the most recent of which was filed with the Commission on January 10, 2001. 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.