Zila to Market Swab Version of OraTest Product / Scheduled to Join Rinse Version in China in January 2000

London (PROTEXT) - Zila Europe, a division of Zila, Inc.(Nasdaq: ZILA), international provider of healthcare products fordental/medical professionals and consumers, announced that itwill introduce new OraTest(R) Swab, a variation of Zila'sOraTest(R) patented oral cancer detection product, at AsianDentech 2000, a major trade show in Hong Kong, China, January 27-30, 2000. The new OraTest Swab product allows full-mouth swabbing orselected application ("painting") of Zila(R) Tolonium Chloride onsuspicious sites. The original OraTest product incorporates a series of oralrinse solutions to enhance the visualization of abnormal tissue.The product's active ingredient, Zila Tolonium Chloride, stainssuspicious tissue blue, for easy identification. Pre- and post-rinse solutions of one percent acetic acid improve visualization.An OraTest kit, consisting of three bottles of rinse solutions,an oversize bib, cups, oral cavity chart and directions for use,is intended for a single patient application and costs dentistsin the United Kingdom #16.20, or about US$26. The single-use OraTest Swab product consists of three cotton-tipped swabs, each individually packaged in a plastic snap-opentube. Swab one is pre-moistened with the OraTest pre-rinsesolution; swab two with Zila Tolonium Chloride solution; and swabthree with a post-rinse solution. The OraTest Swab product isexpected to cost dentists up to 50 percent less than the originalOraTest rinse product. The OraTest Swab packaging concept is the same one used by theCompany for its recently-launched and very successful Zilactin(R)Toothache Swabs. Because healthcare professionals sometimes prefer oneapplication technique over the other based on training, patientcondition or cost, Zila will offer both the new swab and theoriginal rinse product in global markets where they are approvedfor use. Zila Biomedical President Ralph Green, DDS, said the Companyshipped 20,000 original OraTest packages to China in November."We are now working with multiple distributors, targeting agreatly expanded territory that includes a larger population thanwould have been available working exclusively with ShanghaiHunting, our original distributor. Unanticipated Chinese taxes,including excessively high import custom charges on our moreexpensive rinse package, increased the cost of that package to arestrictive level relative to the Chinese market. This makes itimpossible for Shanghai Hunting to meet quantities specified intheir contract, voiding that agreement. "Zila has responded to the cost issue by introducing thealternative swab package and, with several additionaldistributors, marketing to a much broader segment of the Chinesepopulation," Dr. Green added. "This lower cost delivery systemshould allow Zila to achieve aggressive revenue targets, and itshould improve the acceptability of the OraTest system in ThirdWorld regions as well." This document contains forward-looking statements within themeaning of Section 27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934. These forward-lookingstatements are based largely on Zila's expectations or forecastsof future events, can be affected by inaccurate assumptions andare subject to various business risks and known and unknownuncertainties, a number of which are beyond the Company'scontrol. These include possible political, economic orcontractual complications involved in foreign business dealings.Therefore, actual results could differ materially from theforward-looking statements contained herein. A wide variety offactors could cause or contribute to such differences and couldadversely impact revenues, profitability, cash flows and capitalneeds. There can be no assurance that the forward-lookingstatements contained in this document will, in fact, transpire orprove to be accurate. For a more detailed description of theseand other cautionary factors that may affect Zila's futureresults, please refer to Zila's annual report on Form 10-K forits fiscal year ended July 31, 1999, filed with the Securitiesand Exchange Commission. ots Original Text Service: Zila EuropeInternet: http://www.newsaktuell.de Contact: In UK, AdrianWebber, 01722 412312, or In US, Dr. Ralph Green, (USA) 602-266-6700, both for Zila Europe

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