Company Prepares for Pending U.S. Product Launch;
                      Initial Sales in Japan Encouraging

    MINNEAPOLIS, Aug. 14 /PRNewswire/ -- Urologix, Inc. (Nasdaq: ULGX), a
rapidly emerging developer and marketer of minimally invasive medical products
for the treatment of urological disorders, today reported fourth quarter and
year-end results for the fiscal year ended June 30, 1997.  Results reflect
sales to Urologix's non-U.S. distribution partner, Boston Scientific
Corporation, who is currently developing the European market, and the
company's Japanese distribution partner, Nihon Kohden.
    "Fiscal 1997 was a very busy and gratifying year for Urologix.  We
successfully implemented our plan and thereby gained commercial marketing
approval throughout Europe and in Japan; achieved our first commercial
revenues from sales of the T3 System; expanded production capacity to
accommodate increased order placement; and filed a Pre-Market Approval (PMA)
application to the Food & Drug Administration (FDA), an important step for
receiving U.S. marketing clearance," said Jack Meyer, president and chief
executive officer.  "Our fiscal 1997 sales results favorably reflect these
initiatives."
    For fiscal 1997, sales reached $5.5 million versus $362,000 for fiscal
1996.  Net loss for fiscal 1997 was $8.2 million, or $0.90 per share, versus
$7.6 million, or $1.22 per share, for the fiscal 1996 period.
    Sales for the 1997 fourth quarter were $1.8 million versus $20,000 for the
1996 fourth quarter.  The company reported a net loss for the three months of
$3.0 million, or $0.32 per share, compared with a net loss of $2.2 million, or
$0.32 per share, a year ago.
    "The fourth quarter expenses reflect our focus on preparing to enter the
U.S. market when FDA approval is achieved," said Meyer.  "We have moved
forward our pre-launch activities in marketing and product development.  Sales
and marketing management infrastructure has been put in place and is actively
recruiting field representatives, developing marketing materials, conducting
market research, and pursuing reimbursement.
    "In the fourth quarter, we also recorded a charge of approximately
$200,000, or $0.02 cents a share, in sales and marketing related to the
closing of our office in the United Kingdom," added Meyer.  "Our distribution
relationship with Boston Scientific, which began earlier this year, has
diminished the need for a Urologix office in Europe.  We will maintain at
least two sales and marketing positions that are dedicated to the European
markets basing our effort out of the Boston Scientific Paris office."
    The company is encouraged by the progress of the FDA's review of the T3
System PMA.  During the quarter, the FDA completed its Good Manufacturing
Practices (GMP) inspection of the company's manufacturing facilities with no
deficiencies noted.  This represents another significant milestone in the PMA
process.
    "We continue to make progress in the international markets.  Market
development programs implemented by Urologix and Boston Scientific are slowly
beginning to yield results in the European market.  Nihon Kohden has
successfully launched the T3 System in Japan and is experiencing early
success.  With reimbursement already in place and a large market that is
receptive to new technologies for treating benign prostatic hyperplasia (BPH),
we are encouraged about the potential to be realized in the Japanese market,"
said Meyer.
    In other developments, results from clinical trials of the company's T3
System were recently published in the "Journal of Urology."  The results,
which were the first T3 System clinical results published in a peer-reviewed
journal, indicate that the T3 System reduces BPH symptoms and increases
urinary flows with minimal complications.  This paper is the first in a series
of peer-reviewed publications anticipated on the T3 System, and will help
strengthen reimbursement efforts and create a more receptive marketplace.  To
date, Urologix has treated over 700 patients in controlled clinical studies
and has collected follow-up data on over 140 patients at two years post
treatment and over 40 patients at three years post treatment.  The company
believes the investment in these clinical studies will result in valuable data
that can be used to support claims of product safety and efficacy to a
urological community that values long-term results.
    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         Twelve Months Ended
                                   June 30                     June 30
                                    1997                         1996

    Sales                  $1,842,500     $19,763     $5,503,800     $362,118
    Cost of goods sold      1,465,938     311,398      4,866,082    1,177,455
      Gross profit (loss)     376,562    (291,635)       637,718     (815,337)

    Costs and expenses:
      Research and
        development         1,484,832   1,239,851      5,048,917    4,811,165
      General and
        administrative        625,959     371,730      2,226,012    1,191,518
      Sales and marketing   1,672,023     459,742      3,429,443    1,006,544
        Total costs and
          expenses          3,782,814   2,071,323     10,704,372    7,009,227

        Operating loss     (3,406,252) (2,362,958)   (10,066,654)  (7,824,564)
    Interest income, net      429,295     150,817      1,832,798      231,252
    Net loss              ($2,976,957)($2,212,141)   ($8,233,856) ($7,593,312)

    Net loss per
      common share             ($0.32)     ($0.32)        ($0.90)      ($1.22)

    Weighted average number
      of common shares
      outstanding           9,230,928   6,914,962      9,173,419    6,235,290


                                                 As of June 30
                                               1997          1996
    Cash and marketable securities          26,100,805    40,844,218
    Current assets                          30,160,765    41,661,179
    Total assets                            35,582,083    42,367,855
    Current liabilities                      3,147,319     1,721,650
    Long-term obligations                       37,725        57,868
    Shareholders' equity                    32,397,038    40,588,337

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