SOURCE: Given Imaging

January 02, 2008 08:30 ET

Given Imaging Pays Outstanding Royalty Obligation to Israel's Office of the Chief Scientist

Company Also Revises Financial Effect of Termination of Ethicon Endo-Surgery Agreement

YOQNEAM, ISRAEL--(Marketwire - January 2, 2008) - Given Imaging Ltd. (NASDAQ: GIVN), the global leader in capsule endoscopy, today announced that it has paid its outstanding royalty obligation and accrued interest of approximately $5 million to Israel's Office of the Chief Scientist of the Ministry of Industry, Trade and Labor ("OCS"). Given Imaging was committed to pay royalties for several programs to the OCS on proceeds from sales of products that the Israeli Government participated in by way of research and development grants. This repayment will result in a one-time charge of approximately $5.7 million to the Company's income statement in the fourth quarter of 2007.

"Given Imaging has a solid cash balance of over $100 million, enabling us to make an earlier repayment of this interest bearing obligation, and we expect this will have a positive impact on future earnings," said Yuval Yanai, Chief Financial Officer of Given Imaging.

The Company also announced that based on an acceleration of the termination of the cooperation agreement with Ethicon Endo-Surgery, the Company has revised its estimates of the financial effect of the termination of the cooperation agreement with Ethicon Endo-Surgery. The Company now expects to record a pre-tax gain of approximately $23 million in the fourth quarter of 2007, and an additional pre-tax gain of approximately $5.4 million in the first quarter of 2008.

About Given Imaging Ltd.

Given Imaging is redefining gastrointestinal diagnosis by developing, producing and marketing innovative, patient-friendly products for detecting gastrointestinal disorders. The company's technology platform is the PillCam® Platform, featuring the PillCam video capsule, a disposable, miniature video camera contained in a capsule, which is ingested by the patient, a sensor array, data recorder and RAPID® software. Given Imaging has a number of available capsules: the PillCam SB video capsule to visualize the entire small intestine which is currently marketed in the United States and in more than 60 other countries; the PillCam ESO video capsule to visualize the esophagus; the Agile™ patency capsule to determine the free passage of the PillCam capsule in the GI tract and the PillCam COLON video capsule to visualize the colon that has been cleared for marketing in the European Union, and is pending clearance with the United States Food and Drug Administration. More than 600,000 patients worldwide have benefited from the PillCam capsule endoscopy procedure. Given Imaging's headquarters, manufacturing and R&D facilities are located in Yoqneam, Israel. It has operating subsidiary companies in the United States, Germany, France, Japan and Australia. For more information, visit http://www.givenimaging.com.

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, projections about our business and our future revenues, expenses and profitability. Forward-looking statements may be, but are not necessarily, identified by the use of forward-looking terminology such as "may," "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual events, results, performance, circumstances or achievements of the Company to be materially different from any future events, results, performance, circumstances or achievements expressed or implied by such forward-looking statements. Factors that could cause actual events, results, performance, circumstances or achievements to differ from such forward-looking statements include, but are not limited to, the following: (1) satisfactory results of clinical trials with PillCam Colon (2) our ability to receive regulatory clearance or approval to market our products or changes in regulatory environment, (3) our success in implementing our sales, marketing and manufacturing plans, (4) protection and validity of patents and other intellectual property rights, (5) the impact of currency exchange rates, (6) the effect of competition by other companies, (7) the outcome of future litigation, including patent litigation with Olympus Corporation, (8) the reimbursement policies for our product from healthcare payors, (9) quarterly variations in operating results, (10) the possibility of armed conflict or civil or military unrest in Israel, and (11) other risks and factors disclosed in our filings with the U.S. Securities and Exchange Commission, including, but not limited to, risks and factors identified under such headings as "Risk Factors," "Cautionary Language Regarding Forward-Looking Statements" and "Operating Results and Financial Review and Prospects" in the Company's Annual Report on Form 20-F for the year ended December 31, 2006. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except for the Company's ongoing obligations to disclose material information under the applicable securities laws, it undertakes no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

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