Cambridge, Massachusetts, April 8, 2002 -- CompuCyte Corporation announced today that it has concluded a restructuring of its operations, allowing the Company to refocus on its successful line of LSC^® Laser Scanning Cytometers. CompuCyte also reported the completion of a round of private financing, providing the Company with $4 million in working capital.

Additionally, the company is completing development of the next generation of its LSC product line. The new instrument, a fully automated laser scanning cytometer, utilizes an inverted measurement platform and database software that is well suited for arrays of high-content cell specimens such as multi-well microtiter plates and tissue arrays.  Realigning the business to capitalize on the unique benefits of its proprietary technologies is the initial step in CompuCyte’s plan to expand its position in the high-end biopharmaceutical research market.

 The restructuring included the suspension of development of the OnCyte™ System, the company’s cell-based clinical analyzer. “The OnCyte program had reached a major developmental milestone at the time of the market downturn,” said Dr. Elena Holden, President and CEO. “Placing the program on hold and concentrating on the LSC allows us to take full advantage of new trends in research and drug discovery that have enhanced the value of laser scanning cytometry technology.”

Laser scanning cytometry, which combines flow cytometry and image processing techniques to rapidly extract large amounts of data from specimens with many different cell types, has gained a significant following as a tool for the study of cellular processes. CompuCyte has marketed the LSC^® Laser Scanning Cytometer analyzer since 1996 and now has an installed base in leading pharmaceutical and academic institutions worldwide. 

“The corporate changes reflect the strategic view that the Company’s core laser scanning cytometry technology was undervalued in light of new research trends,” said Dr. Louis Kamentsky, Chairman of the company’s board of directors. “Academic and industrial research is increasingly focusing on the links between genomics and cellular constituents and cell functioning. To accomplish this, researchers are relying on methods and instruments that can measure multiple characteristics of many cells, at relatively high speed. The ability to process this so-called ‘high-content data’ is a basic advantage of laser scanning cytometry.”

High-content analysis has become an important tool in cutting-edge drug discovery research. “The LSC offers the advantages of rapidity and objectivity, in comparison with traditional cellular analysis techniques, and is particularly well suited for analyzing small specimens, such as those obtained from toxicological studies. The LSC’s ability to combine these measurements with the visual image of the corresponding cell is a real advantage to us, since a specimen’s morphological structure can be preserved,” stated Dr. Danielle Roman, Principal Scientist at Novartis Pharma AG.

“As an example,” explained Dr. William Telford, Staff Scientist at the National Institutes for Health in Bethesda, Maryland, “the LSC’s ability to scan cells that are attached to a surface allows us a far more detailed picture of the location and distribution of constituents in individual cells, and provides far greater sensitivity than traditional analytical methods in detecting early physiological events associated with cell growth and death. By using the LSC’s combination of image processing techniques to extract large amounts of information, and its unique software to analyze it all, we can more effectively study cellular activity and physiology in intact tissue sections—a capability not available in conventional cytometry instruments.”

The company’s new LSC instrument is scheduled for release in the third quarter of 2002, and will be targeted at the toxicology and drug discovery research markets. “The high-content data generated by laser scanning cytometry is invaluable in optimizing leads in compound toxicity studies, and in validating new targets. With the new capability offered by the inverted format, the unique features of the LSC are extended to the higher throughput settings suitable for drug discovery and functional proteomics research,” said Dr. Holden.

CompuCyte Corporation, a privately held company headquartered in Cambridge, Mass., has been providing systems for high-content cellular analysis since 1996.