Strategic Diagnostics, Inc. today announced that their Bt Cry1A(b) corn test kits are in the final
stages of customer validation. 

Kits are being shipped to key customers for final evaluation and validation with initial response
exceeding expectations. Initial orders are now being taken and the official commercial launch of
the two test kits is expected to occur in January 2000. Both kits utilize an immunodiagnostic test
strip developed by SDI that provides users with a rapid, easy-to-use test that gives a definitive
result in under five minutes. The tests can be used as a rapid screening tool for the detection of Bt Cry1A(b) in corn to levels of 0.5% for Bt11 (a product of Novartis) and MON 810 (a product
of Monsanto). Test validation has shown the test to be greater than 99% accurate. 

The first test has been developed for seed licensees to assure the high quality of seeds grown by
foundation seed growers for sale to commercial growers and can be used for all Bt Cry1A(b).
The second test is designed for the grain industry to identify the genetic traits in corn and will be
distributed through SDI's partnership with AIT (Agricultural Information Technology). AIT
provides key components of an Identity Preserved System for input and output traits in seed,
crop, grain and food products. The Postmark (TM) line of products assists businesses in
effectively tracking agricultural materials. The Postmark brand products include SIGNPOST
(TM), an onsite field marking system, SEEDTAG (TM), a comprehensive database of seed traits
for corn, soybeans, and cotton and CROPTOUCH (TM), a process and materials tracking
system. AIT, in affiliation with its distribution partners, which include United Agri-Products and
Cenex, has over 1,000 sales representatives throughout the world. 

Tim Aughenbaugh, President and CEO of AIT commented, "AIT is excited to expand the
relationship with SDI and in doing so, be able to better serve the agricultural industry as it
increases its focus on the traceability of agricultural materials. This expanded strategic relationship with SDI will allow AIT to maintain a leading role as the industry's provider of ''agricultural identity preservation systems." 

These tests for corn were modeled after the Trait Roundup Ready® test released earlier this year
for the detection of Roundup Ready® soybeans. This test has been commercially successful as a rapid tool in the identification and separation of soybeans according to genetic composition. The
test, when used with an appropriate sampling plan, is being used to separate soybeans below
defined thresholds (0.5% - 5%). Food fractions derived from separated soybeans are then tested
with SDI's GMO test as a quantitative means for food processors to comply with labeling
requirements in many parts of the world including the European Union and Japan. The GMO test
was validated in a European Ring study in December 1998. Monsanto and SDI are currently
validating a similar GMO assay for Bt Cry1A(b) in corn. 

The grain and food distribution segments in agriculture have expressed significant need for this
analytical technology to meet market requirements to identify genetically modified corn in world
markets. This need has developed rapidly. U.S. producers have increasingly adopted the genetic
technology after the success they experienced in the 1998 and 1999 growing seasons. The U.S.
Department of Agriculture estimated that approximately 30% of the 9.7 billion bushels of U.S.
corn produced in 1999 incorporated genetic technology and industry reports of early indications
for the 2000 growing season show that utilization of this technology may decline from the 1999
level but will still remain an important tool for commercial growers. The growth in the need for
SDI's products has been the promulgation of labeling regulations adopted in many regions of the
world including the two largest agricultural commodity-trading partners, the European Union and
Japan. These labeling requirements have required or are expected to require food processors to
label finished food products as to the genetic composition of the ingredients used to produce
these products. 

The initiation of labeling and the growing number of food processors electing to use non-GMO
raw materials are driving the need for identity preservation. The SDI test has become the
standard in the grain distribution market. However, as many food companies delayed
implementing labeling and the use of non-GMO source material, the demand for identity
preserved raw material was lower than anticipated by many of the earlier adopters of SDI's test.
Therefore, reorders that were anticipated by these early adopters did not materialize in the fourth
quarter. Consequently, the Company expects revenues to be approximately $5.8 million for the
fourth quarter of 1999 (a 60% increase over its fourth quarter 1998) and $22.6 million for the full
year (a 44% increase over 1998 full year revenues). The Company anticipates earnings before
taxes (excluding the $3.5 million charge for in-process research and development expenses
related to a first quarter 1999 acquisition) to be approximately $450,000 (or $0.03 per diluted
share) for the fourth quarter of 1999 and $2.0 million (or $0.11 per diluted share) for the full
year. These estimated results compare with fourth quarter 1998 revenues of $3.6 million and a
loss of $450,000 or $0.03 per share. These anticipated results for 1999 however are lower than
analysts estimates of $7.6 million in fourth quarter revenues and $1.1 million (or $0.07 per diluted
share) of fourth quarter pre tax earnings and $24.5 million of full year revenues and $2.7 million
(or $0.16 per diluted share) of pre tax income for the full year. 

The market for the Company's agricultural products continues to develop. Labeling specifications
are nearing completion in both Europe and Japan. Identifying the genetic composition of grain and
commercial crops and maintaining that identity throughout the agricultural complex to support
labeling has become a high priority for seed companies, commercial growers, distribution and
processing companies, as well as food processors during 1999 and is expected to increase as
labeling is further implemented in 2000. SDI offers leading products in each of these emerging
markets. The rate at which prospective customers adopt and implement testing protocols and
procedures throughout the world is expected to continue to have a significant impact on sales of
the Company's products. The Company has indications of interest for purchasing substantial
quantities of the Company's products from prospective customers throughout the world, and
particularly the United States, Europe and Japan. Delays in establishing technical labeling
definitions delayed the timing of orders for the company products. As a result of this additional
experience with these developing markets particularly in agriculture, the Company anticipates first
quarter 2000 revenues to grow in the range of 45% - 55% over 1999 first quarter revenues.
Income before income taxes for the first quarter of 2000 is expected to be in the range of 8% -
10% of revenues. 

Richard C. Birkmeyer, President and CEO of SDI commented, "We are excited to have a
product that can meet the customer need in the grain market for identity preservation. The 0.5%
sensitivity in under 5 minutes was a challenge that we met. Our test also detects Cry 1A(b) in all
three commercial events, Mon 810, BT11 and Event 176. This assay is the only analytical tool
for corn that meets the market requirements of the grain distribution industry for sensitivity and
timing. This challenge of validating our test kits within an Identity Preservation system that would
be accepted by the end user as well as establishing the distribution for this product delayed the
release of this product slightly. However, we believe it is critical to fully validate the use of the
tests for market-driven applications for the long-term success of GMO testing. We believe that
the availability of these tools will provide consumers with a choice and is expected to stimulate
broad acceptance of GMOs.'' 

SDI is a leading provider of biotechnology-based diagnostic tests for a broad range of
agricultural, industrial and water-treatment applications. Through its antibody business, Strategic
BioSolutions, Strategic Diagnostics also provides antibody and immunoreagent research and
development services. SDI's test kits are produced in a variety of formats suitable for field and
laboratory use, offering advantages of accuracy, cost-effectiveness, portability, and rapid
response. Trait Check (TM) is a pending trademark for SDI. 

Company news release
N2370