WAYNE, Pa., Dec. 10 /PRNewswire/ -- Escalon Medical Corp. (Nasdaq: ESMC)
today announced that it has submitted an Investigational New Drug (IND)
application to the U.S. Food and Drug Administration (FDA) for povidone-iodine
2.5% solution.  Povidone-iodine 2.5% is a broad-spectrum antimicrobial, active
against bacteria, viruses and fungi, that has been suggested as a viable
alternative for the prevention of ophthalmia neonatorum, commonly known as
neonatal conjunctivitis.  Ophthalmia neonatorum continues to be a leading
cause of blindness in third world countries.
    In an effort to prevent ophthalmia neonatorum in the U.S., newborns are
treated with erythromycin.  However, bacterial resistance to erythromycin can
occur and some erythromycin-treated newborum.
A clinical study completed outside the U.S. by Drs. Isenberg, Apt and Wood of
UCLA has provided support for using povidone-iodine 2.5% for the prevention of
ophthalmia neonatorum.  Escalon acquired its exclusive license to develop and
market povidone-iodine 2.5% for this indication from UCLA, which holds the
patent.
    Pending FDA authorization, the Company plans to begin a Phase III clinical
trial in January 2000.  Escalon currently plans a large randomized study
involving approximately 4,000 patients at five clinical sites throughout the
U.S.  This clinical trial is expected to last approximately one year, with the
entire testing and approval process expected to take approximately two and a
half years.
    "We are very excited to begin human clinical testing of povidone-iodine
2.5%," commented Richard J. DePiano, Chairman and Chief Executive Officer of
Escalon.  "Povidone-iodine 2.5% solution will target the approximately
3.5 million children born is the U.S each year and has the potential to be
expanded to international markets as well.  Our collaboration with UCLA has
been important to our progress to date and we look forward to working with
them as we progress through the clinical trial process.  Typical of Escalon's
strategy, we expect to seek joint ventures or strategic partnership
arrangements to fund the development and potential commercialization of this
product."
    Founded in 1987, Escalon develops, markets and distributes ophthalmic
surgical and pharmaceutical products as well as vascular access devices that
provide a base of positive cash flow 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, Wis.

    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 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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