MonoGen, Inc.
TSX : MOG

MonoGen, Inc.

January 31, 2007 16:05 ET

MonoGen CEO Provides Business and Operational Update

MONTREAL, QUEBEC--(CCNMatthews - Jan. 31, 2007) - This Press Release is Not for Distribution in the United States

Dr. Norman Pressman, CEO, President and Chief Scientific Officer of MonoGen, Inc. "Corporation" (TSX:MOG), is pleased to provide hereby to the shareholders of the Corporation a business and operational update.

Dear Shareholders,

I am pleased to report to you on our progress thus far and our outlook for this calendar year.

Industry Trends

The demand for diagnostic products for cervical cancer detection and diagnosis (our initial market segment) remains strong with over 55 million Pap tests being performed in the United States every year. The demand for other cytopathology-based diagnostic products is anticipated to continue growing in the future. This positive outlook has enticed industry players to position themselves accordingly. For example, over the last twelve months the global in vitro diagnostics industry witnessed Siemens AG purchase Diagnostic Products Corp. and the Bayer AG Diagnostics division while GE Healthcare (the resulting entity from the 2003 purchase by GE of Amersham) recently announced the purchase of the Abbott Diagnostics division. In our industry segment of anatomic pathology we have seen over the last twelve months Becton, Dickinson and Company purchase TriPath Imaging, Inc. and Danaher Corporation purchase Vision Systems Limited. Industry analysts anticipate further industry consolidation in the future.

Operations

This year will see the MonoPrep® Processor and its first accompanying test, the FDA-approved MonoPrep Pap Test, introduced into the U.S. market. We are currently working together with our distributor Cardinal Health in developing and implementing the commercialization plan. We expect that product placements will occur gradually throughout the year at an increasing pace, starting in earnest in the second half of 2007. This staged launch plan will enable MonoGen to review and adapt our commercialization infrastructure and processes as we accelerate sales throughout the year. During the first half of this year we are focusing on incorporating the final improvements to our products and ensuring their reliability; the ramp up of our manufacturing plant and the building of initial inventory levels to meet anticipated market demand; and recruiting, training and deploying an effective, efficient and responsive client services team.

In order to ensure a successful market launch and ongoing commercialization of our products we have strengthened our executive suite by hiring professional managers with solid, successful track records. More specifically, Mr. Ted Geiselman, previously with Cytyc Corporation, joined us as Senior Vice President and Chief Operating Officer and Mr. Jim Cureton, formerly with the Abbott Diagnostics division of Abbott Laboratories, joined us as Vice President, Sales and Marketing.

Product Pipeline

We are currently deploying significant efforts on the development of an imaging platform and have already filed initial patent applications to this effect. Our goal is to develop a state-of-the-art imaging platform leap-frogging existing commercially available cytopathology imaging systems. However, we are too early in this product development phase to estimate a market introduction date. We are also moving forward on product definition and development plans for our molecular diagnostics program to bring automated sample preparation capabilities to potential strategic partners.

Regulatory and Intellectual Property

A critical success factor to our business model is maintaining and expanding our regulatory approvals and our intellectual property portfolio. We are constantly monitoring our compliance to existing regulations while seeking additional and expanded patents and regulatory claims for our products and technologies.

We will be seeking during the year U.S. Food and Drug Administration (FDA) approval to use our MonoPrep Pap Test specimen preparation with the Digene hc2 test, the current standard of care in testing for and detecting human papillomavirus (HPV). As part of the MonoPrep Pap Test clinical trial, we processed over 3,000 samples on the Digene h2c test. We believe that the data obtained from this study demonstrates the suitability of our MonoPrep Pap Test sample preparation for use with the Digene hc2 test. We are currently actively engaged in the process of preparing an FDA submission for such HPV claim which we anticipate to file with the FDA in the first half of 2007. We anticipate approval later in the year, contemporaneously with the ramp up of the early phase of commercialization of our MonoPrep Pap Test.

Financial Situation

We have entered 2007 with a comfortable cash position which is currently at approximately US$20 million. Based upon our currently anticipated burn rate, we believe that our cash position will be sufficient to fund our business well into 2008. Obviously, this outlook will necessarily change if our revenue projections are not attained and if we were to decide to accelerate expenditures beyond their currently planned levels, such as by accelerating the development of the MonoPrep imaging system. As additional capital will be required until we become cash flow positive, we intend to be responsive to financing opportunities as may present themselves at any point in time throughout 2007 by raising additional capital and seeking a Nasdaq listing.

Risk Factors

Over the past years we have successfully surmounted considerable risk factors in developing our products and in securing FDA approval to market our MonoPrep Pap Test. We are now embarking upon a new phase of growth which brings about new risk factors related to an effective commercialization plan and of a perfect execution in operations and on the regulatory front. Our confidence in our ability to deal with such risk factors is supported by our belief that we have developed (a) better products which are faster and less expensive to use and (b) an experienced and dedicated management team of people who have successfully dealt with similar risk factors in their careers.

Therefore, we look forward to the future with a great deal of excitement and, of course, I thank each and all of you for your continuing support.

Yours sincerely,

Norman J. Pressman, Ph.D.

CEO, President and Chief Scientific Officer

Forward-looking Statements

This letter to Stockholders contains statements that are forward-looking in nature. Statements preceded by the words believe, expect, anticipate, plan, intend, continue, estimate, may, will, and similar expressions are forward-looking statements. Forward-looking statements are based on the Corporation's beliefs and assumptions based on information available at the time the assumption was made. Forward-looking statements relate to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, new services, market forces, commitments and technological developments, relating to the Corporation. By its nature, such forward-looking information is subject to various risks and uncertainties which could cause the Corporation's actual results and experience to differ materially from the anticipated results or other expectations expressed. Those risks and uncertainties include, but are not limited to MonoGen's ability to raise additional capital, MonoGen's ability to execute its business plan while maintaining at all times its various regulatory approvals, the performance of its strategic partners including the performance of Cardinal Health in the commercialization of the Corporation's products in the marketplace and the competitive response from existing and potential competitors. Readers are cautioned not to place undue reliance on this forward-looking information, which is given as of the date it is expressed in this document, and the Corporation undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise.

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