Agritope, Inc. today reported operating results for its third quarter and first nine months of fiscal 1999 that ended June 30, 1999. The company's net loss for the third quarter of fiscal 1999 was $1.3 million, or $0.32 per share, compared with a net loss of $1.5 million, or $0.37 per share, in the third quarter of fiscal 1998. For the nine months ended June 30, 1999, the company reported a net loss of $3.8 million, or $0.94 per share, as compared to a loss of $3.7 million, or $1.04 per share for the nine-month period ended June 30, 1998.

Revenues for the quarter and nine months ended June 30, 1999 were $1.5 million and $2.2 million, respectively, representing increases of $865,000 and $1.3 million, respectively, as compared to revenues for the comparable periods in fiscal 1998. For the nine months ended June 30, 1999, grants and research contracts produced revenues of $628,000, an increase of $556,000 over the first nine months of fiscal 1998. The increases reflect activity on projects sponsored by the National Institute of Standards and Technology and the company's principal research partner, Vilmorin Clause & Cie. Vinifera, Inc., Agritope's majority-owned grapevine nursery, recorded sales of $1.6 million for the nine months ended June 30, 1999, as compared to sales of $846,000 for the
comparable period in 1998 when sales were adversely affected by inclement weather. Based on orders on hand at the end of the quarter, Vinifera expects to record sales of approximately $3.0
million for the 1999 fiscal year, representing an increase of 17% over 1998 results.

Research and development expenses increased $69,000 (9%) and $445,000 (24%), respectively,
for the quarter and nine months ended June 30, 1999, as compared to the corresponding prior-year periods. Selling, general and administrative expenses increased by $32,000 (4%) and $234,000 (9%), respectively, as compared to the quarter and nine months ended June 30, 1998. Research activity increased in fiscal 1999, especially with respect to projects funded by grants and research contracts. Following the company's move to expanded research and office facilities in March 1998, occupancy expenses increased. Other increases in operating costs included increased sales activity at Vinifera, non-cash compensation expense related to stock option awards and legal costs associated with the company's proposed gene discovery program.

In July 1999, Agritope finalized an agreement with Rhone-Poulenc, S.A. to establish, Agrinomics
LLC, a joint venture that will conduct a research, development and commercialization program in
the field of functional genomics. Rhone-Poulenc will make capital contributions, in cash, to
Agrinomics totaling $20 million over five years. The initial capital contribution of $5 million to
support first year operating requirements was made in July. Agritope and Rhone-Poulenc each own a 50% equity interest in Agrinomics. Through its fully integrated functional genomics program, Agrinomics intends to develop a network of research and commercial alliances with a broad range of interests. Discussions with several prospective sponsors are underway.

In June 1999, Agritope entered into stock purchase agreements with certain minority shareholders of Vinifera pursuant to which minority ownership of Vinifera will increase from 36% to approximately 50% over a three-year period. In a related transaction, also in June, Vinifera repaid
the $1 million balance on its working capital line of credit to Agritope and replaced the line with a
$1.5 million revolving bank line of credit that is guaranteed by a minority shareholder. In July 1999,
the minority shareholders made the first purchases under the stock purchase agreements. Agritope received proceeds totaling $874,000 and its ownership interest in Vinifera was reduced from 64% to 57%.

Agritope, Inc. is an Oregon-based agricultural biotechnology company that develops improved plant products and provides technology to the agricultural industry. Vinifera, Inc. offers superior grapevine plants to the premium wine industry together with disease testing and elimination services.

Company news release
N2047