Japanese Approval Received; U.S. PMA Application
                        Submitted and Deemed Suitable for Filing

    MINNEAPOLIS, May 1 /PRNewswire/ -- Urologix, Inc. (Nasdaq: ULGX), a
rapidly emerging developer and marketer of minimally invasive medical products
for the treatment of urological disorders, today reported fiscal 1997 third
quarter and nine-month results.
    Sales for the fiscal 1997 third quarter ended March 31, 1997, were
$1.8 million compared with $159,500 in the comparable fiscal 1996 quarter.
The company reported a net loss for the three months of $1.9 million, or
$0.20 per share on a higher number of shares outstanding, compared with a net
loss of $2.2 million, or $0.37 per share, a year ago.
    For the nine months, sales reached $3.7 million compared with $342,400 a
year ago.  Net loss was $5.3 million, or $0.57 per share on a higher number of
shares outstanding, versus $5.4 million, or $0.90 per share, for the fiscal
1996 period.  The increase in shares outstanding for the quarter and nine-
month period resulted primarily from the company's initial public offering
completed in June 1996.
    "Over the last three months we have accomplished a great deal," said
Jack Meyer, president and chief executive officer.  "Our Japanese distribution
partner, Nihon Khoden, received approval to market the company's T3 System in
Japan through its 600 person sales force, which now diversifies our selling
base between Europe, Canada and Japan.  With reimbursement for transurethral
microwave thermotherapy already in place in Japan, we are optimistic about
Nihon Kohden's opportunity in the Japanese market.  Additionally, our efforts
to penetrate the important U.S. market are progressing favorably.  In
February, we submitted our Pre-Market Approval (PMA) application to the U.S.
Food & Drug Administration (FDA) and, after 30 days, the FDA had not only
determined the PMA was suitable for filing, but stated that, based on its
initial review, would not refer the PMA to an FDA advisory panel for review
and recommendation.  As a result of this continued progress with the
regulatory approval process, Urologix is on track with its plan to be able to
market the T3 System in the U.S."
    Significant progress in securing reimbursement for performing T3
procedures was also made during the quarter.  The American Medical
Association's CPT Editorial Panel approved the addition of a CPT code for
physicians to use when performing transurethral microwave therapy in November
1996 and recommended a work value for the CPT code in February 1997.  The new
CPT code is expected to be published in the 1998 CPT book.  Urologists
conducting clinical studies on the T3 System in the U.S. are already being
reimbursed by Medicare.
    "Sales in the quarter were primarily to Boston Scientific, our distributor
for all international markets outside Japan," said Meyer.  "While we are
pleased with Boston Scientific's strategic market development efforts, the
generally cautious nature of the European medical community and reimbursement
issues have contributed to a longer than expected selling cycle for the T3
System."
    "Urologix and Boston Scientific have programs in place or being
implemented to accelerate T3 sales in Europe.  Additional clinical studies
have been initiated with influential opinion leaders in Europe, and once
available, we plan to utilize these expanded study results and compelling
testimonials to broaden our marketing scope.  Boston Scientific is informing
physicians of reimbursement efforts that are yielding success in certain
countries and offering various financial alternatives for procuring T3
Systems.  Based on the continued positive clinical results and feedback from
the T3 clinical investigators in Europe, we, along with Boston Scientific,
remain optimistic that we will successfully penetrate the European market."
    In other developments, physicians from The Mayo Clinic and the University
of Rochester recently presented favorable results from clinical studies of the
T3 System at the American Urology Association (AUA) annual meeting held last
month, which is attended by more than 8,000 urologists from around the world.
These and other results presented at the AUA are increasing awareness in the
international urology community of the value of outpatient BPH treatments that
preserve the urethra while significantly reducing BPH symptoms.
    Commenting on the outlook for the remainder of the 1997 fiscal year, Meyer
concluded, "We are encouraged by our progress this quarter.  As we move closer
to providing the T3 System to BPH patients worldwide, we are enthusiastic
about our position as a well-financed company addressing very large markets,
and working with outstanding clinical investigators and marketing partners
throughout the world."
    Urologix, Inc., based in Minneapolis, is engaged in the development of
minimally invasive medical products for the treatment of urological disorders.
The company has developed the T3 System, a non-surgical, anesthesia-free,
catheter-based therapy that uses a proprietary microwave technology for the
treatment of BPH, a disease that affects over 23 million men worldwide.
    NOTE:  Certain statements in this press release that relate to future
performance of the company are "forward-looking" and are subject to risks and
uncertainties inherent in the company's business.  These risks and
uncertainties include: competition for other treatments for BPH in markets
outside the U.S.; the ability of the company's distributors to successfully
market and sell the company's products in markets outside the U.S.; the
company's ability to obtain FDA approval to market the T3 System in the U.S.;
the company's ability to manufacture the T3 System in sufficient quantities;
and the extent to which the physicians performing the T3 procedures are able
to obtain third-party reimbursement.


                                UROLOGIX, INC.
                           STATEMENT OF OPERATIONS
                                 (Unaudited)

                               Three Months Ended        Nine Months Ended
                                    March 31,                 March 31,
                               1997          1996         1997         1996

    Sales                   $1,789,500     $159,480   $3,661,300     $342,355
    Cost of goods sold       1,524,123      371,884    3,400,144      866,057
      Gross profit (loss)      265,377     (212,404)     261,156     (523,702)

    Costs and expenses:
      Research and
        development          1,245,730    1,476,372    3,564,086    3,571,314
      General and
        administrative         576,895      310,158    1,600,053      822,250
      Sales and marketing      730,601      228,270    1,757,419      546,802
       Total costs and



         expenses            2,553,226     2,014,80    6,921,558    4,940,366

    Operating loss          (2,287,849)  (2,227,204)  (6,660,402)  (5,464,068)
    Interest income            425,339       20,807    1,415,290       85,357
    Interest expense            (7,256)        (781)     (11,787)      (2,461)
    Net loss               $(1,869,766) $(2,207,178) $(5,256,899) $(5,381,172)

    Net loss per common
      share                     ($0.20)      ($0.37)      ($0.57)      ($0.90)

    Weighted average
      number of common shares
      outstanding            9,158,231    6,008,733    9,149,020    6,009,679


                         SELECTED BALANCE SHEET DATA

                                            As of March 31,
                                          1997         1996
    Cash and marketable securities    $30,181,657    $3,148,904
    Current assets                     33,702,400     3,756,765
    Total assets                       38,186,735     4,416,299
    Current liabilities                 2,901,438     1,167,928
    Long-term obligations                  44,011        18,847
    Shareholders' equity               35,241,286     3,229,524

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