WAYNE, Pa., Feb. 4 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced that, upon completing its review of the financial impact of
discontinuing the Ocufit SR(R) clinical trial, it has determined that it will
take an approximately $460,000 non-cash charge in the Company's fiscal second
quarter, which ended December 31, 1999.  This is an increase from the
Company's earlier estimate of approximately $170,000 and includes the
write-off of certain capitalized costs as well as related goodwill.
    As previously reported, the recent sale of Adatosil Silicone Oil, the
expected write-off from Ocufit SR(R) and rising research and development
expenses due to the clinical trials of Ocufit SR(R) and povidone-iodine 2.5%,
are expected to lead to a net loss in the fiscal second quarter.  The loss is
currently expected to be in a range of $1.2 to $1.3 million, or $0.37 to $0.40
per share.  The Company expects to report its results late the week of
February 6.
    Escalon Chairman and Chief Executive Officer, Richard J. DePiano,
commented, "While the second quarter's results are disappointing, we have
taken the proper steps to move forward without Ocufit SR(R) and will now be
able to reallocate our research and development spending into areas that show
greater promise, such as povidone-iodine 2.5%.  Through recent acquisitions
and by focusing on niche products that we own rather than distribute, we
believe we have put Escalon on track to report improved results in the second
half of our fiscal year."
    Founded in 1987, Escalon develops, markets and distributes ophthalmic
surgical and pharmaceutical products as well as vascular access devices to
fund a targeted research and development effort.  The Company utilizes
strategic partnerships to help finance its development programs and is also
seeking acquisitions to further diversify its product line to achieve critical
mass in sales and take better advantage of the Company's distribution
capabilities.  Escalon has headquarters in Wayne, Pennsylvania and
manufacturing operations near Milwaukee, Wisconsin.

    Note:  This press release contains statements that are forward-looking,
including statements about the Company's future prospects.  They are based on
the Company's current expectations and are subject to a number of
uncertainties and risks.  Actual results may be affected by, among other
things, uncertainties related to recent acquisitions, uncertainties and risks
related to new product development and introduction cycles, research and
development activities, including failure to demonstrate clinical efficacy,
delays by regulatory authorities, scientific and technical advances by the
Company or third parties, introduction of competitive products, third party
reimbursement and physician training.  Further information about these and
other relevant risks and uncertainties may be found in the Company's report on
Form 10-K, and its other filings with the Securities and Exchange Commission,
all of which are available from the Commission as well as other sources.

    To receive additional information on Escalon Medical Corp., via fax, at no
charge, dial 1-800-PRO-INFO and enter code ESMC.

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