OraSure Technologies Responds to Acquisition of Wartner Cryosurgical Product Line by Prestige Brands

BETHLEHEM, Pa.--(BUSINESS WIRE)--OraSure Technologies, Inc. (NASDAQ: OSUR) today issued a statement in response to the announcement by Prestige Brands, Inc. that it has acquired the Wartner cryosurgical wart removal product line, which is sold in the retail or over the counter ("OTC") market in the United States. The Wartner product competes directly in the OTC market against OraSure's cryosurgical wart removal product, which is distributed by Prestige on an exclusive basis under its Compound W® and Freeze Off(TM) trade names.

OraSure believes that the acquisition by Prestige of the Wartner product line constitutes a material breach of the distribution agreement between the parties, which includes a provision prohibiting Prestige and its affiliates from selling or acquiring an ownership interest in a product that competes directly with the Freeze Off(TM) product. OraSure has notified Prestige of this breach as well as certain others under the distribution agreement. If Prestige does not cure these breaches in accordance with the agreement, OraSure intends to enforce its contractual and legal remedies. The agreement contains a mandatory arbitration provision for the resolution of disputes between the parties.

"We are disappointed that Prestige has decided to acquire a competing cryosurgical wart removal product for sale in the OTC market in the United States," said Douglas A. Michels, OraSure's President and Chief Executive Officer. "We believe this action clearly violates both the letter and spirit of our distribution agreement with Prestige and we have every intention of enforcing our rights. Our priority is and will remain to protect the business interests of OraSure and ensure continued sales of our cryosurgical wart removal product in the domestic OTC market. Our next step will be to try to resolve this matter with Prestige. We are also evaluating alternative arrangements for distributing this product in the event a resolution with Prestige cannot be reached."

About OraSure Technologies

OraSure Technologies develops, manufactures and markets oral fluid specimen collection devices using proprietary oral fluid technologies, diagnostic products including immunoassays and other in vitro diagnostic tests, and other medical devices. These products are sold in the United States as well as internationally to various clinical laboratories, hospitals, clinics, community-based organizations and other public health organizations, distributors, government agencies, physicians' offices, and commercial and industrial entities.

OraSure Technologies is the leading supplier of oral fluid collection devices and assays to the life insurance industry and public health markets for the detection of antibodies to HIV. In addition, the Company supplies oral fluid testing solutions for drugs of abuse testing. For more information on the Company, please go to www.orasure.com.

Important Information

This press release contains certain forward-looking statements. Actual results could be significantly different. Factors that could affect results include the ability to market and sell products; impact of competitors, competing products and technology changes; ability to develop, commercialize and market new products; market acceptance of oral fluid testing or other new products or technology; changes in market acceptance based on product performance; continued bulk purchases by customers, including governmental agencies, and the ability to fully deploy those purchases in a timely manner; changes in relationships with strategic partners and reliance on strategic partners for the performance of critical activities under collaborative arrangements; failure of distributors or other customers to meet purchase forecasts or minimum purchase requirements for our products; ability to fund research and development and other products and operations; ability to obtain and maintain new or existing product distribution channels; reliance on sole supply sources for critical product components; availability of related products produced by third parties; ability to obtain, and timing and cost of obtaining, necessary regulatory approval for new products or new indications or applications for existing products; ability to comply with applicable regulatory requirements; history of losses and ability to achieve sustained profitability; volatility of our stock price; uncertainty relating to patent protection and potential patent infringement claims; uncertainty and costs of litigation relating to patents and other intellectual property; availability of licenses to patents or other technology; ability to enter into international manufacturing agreements; obstacles to international marketing and manufacturing of products; ability to sell products internationally; loss or impairment of sources of capital; ability to meet financial covenants in agreements with financial institutions; ability to retain qualified personnel; exposure to product liability, patent infringement, and other types of litigation; changes in international, federal or state laws and regulations; customer consolidations and inventory practices; equipment failures and ability to obtain needed raw materials and components; the impact of terrorist attacks and civil unrest; ability to complete consolidation or restructuring activities; ability to identify, complete and realize the full benefits of potential acquisitions; and general political, business and economic conditions. These and other factors are discussed more fully in the Securities and Exchange Commission ("SEC") filings of OraSure Technologies, including its registration statements, its Annual Report on Form 10-K for the year ended December 31, 2005, its Quarterly Reports on Form 10-Q, and its other filings with the SEC. Although forward-looking statements help to provide complete information about future prospects, readers should keep in mind that forward-looking statements may not be reliable. The forward-looking statements are made as of the date of this press release and OraSure Technologies undertakes no duty to update these statements.

Contact:

OraSure Technologies, Inc.
Investor Contact:
Ronald H. Spair, 610-882-1820
Investorinfo@orasure.com
www.orasure.com

Source:
OraSure Technologies, Inc.