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Devices FDA Neurology

 News Release - December 21, 2006

Natus Medical Receives FDA Approval for the Olympic Cool-Cap

New Treatment Available to Reduce Brain Injury in Newborns

SAN CARLOS, Calif.--(HSMN NewsFeed)--Natus Medical Incorporated (Nasdaq:BABY ) today announced that it has received premarket approval ("PMA") from the Food & Drug Administration ("FDA") to market its Olympic Cool-Cap, a Class III medical device. The Cool-Cap system, which is the only FDA-approved device for the treatment of hypoxic ischemic encephalopathy ("HIE") in term newborns, provides selective head cooling to prevent or reduce the severity of neurologic injury associated with HIE.

Approximately three in 1,000 newborns are at risk of brain injury due to an interruption of blood flow and oxygen supply during labor and delivery. In 1999, Olympic Medical initiated a four-year international multi center study of the Cool-Cap system. Results of the study confirmed that when head cooling therapy was administered to patients within the first six hours of life, thereby lowering the body temperature three to four degrees Centigrade, the severity of brain injury was significantly decreased compared to the untreated control group. The study enrolled babies at high risk for moderate to severe brain injury as diagnosed by using the Company's Olympic CFM 6000 Cerebral Function Monitor, which aids in identifying neurological abnormalities such as HIE.

"Until now, there has been no FDA approved way to improve life for these babies," stated John D. E. Barks M.D., Associate Professor of Pediatrics and Director of the Neonatal-Perinatal Research Programs at The University of Michigan. "Now cooling the brain lets us offer hope to parents. Most parents quickly grasp the concept underlying cooling and are ready to accept the therapy for their child. I use the analogy of icing an injured joint. As a cooling referral center, we have three Cool-Caps, because on more than one occasion we have had to simultaneously treat two babies and also needed a back-up."

Natus plans to market the Cool-Cap system to Level III neonatal intensive care departments ("NICU's") worldwide, with each center utilizing two Cool-Cap devices. Based on these metrics, Natus anticipates a market potential of over 4,000 devices worldwide. Natus expects that NICU's in regional centers of excellence will become the first adopters of the treatment and that head cooling therapy will quickly become a standard of care for the treatment of newborn HIE.

Olympic Medical, which was acquired by Natus in October 2006, developed the CFM 6000 Cerebral Function Monitor and received FDA 510(k) clearance to market the product in 2003. The CFM 6000 is used in the Neonatal Intensive Care Unit and other acute care departments to perform continuous, long-term monitoring of a newborn's brain activity. The CFM 6000 monitor enables clinical staff to assess the function of the brain as an aid to both diagnosis and treatment of a variety of neurological conditions such as seizures, HIE, and the effects of medication. The Olympic CFM 6000 utilizes an FDA-cleared single-channel amplitude-integrated EEG algorithm for cerebral function monitoring that is the basis for most clinical studies published on the subject since 1975. The FDA treatment protocol for the Cool-Cap system requires an assessment made with the Olympic CFM 6000 to select patients for treatment.

"Natus once again is leading the market by providing customers with products that deliver significant benefits," stated Jim Hawkins, President and Chief Executive Officer of Natus. "We clearly were the leader in developing newborn hearing screening into a standard of care, and we expect to leverage that experience as we now look to make routine brain monitoring and head-cooling of newborns a new standard of care."

About Natus Medical

Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, newborn jaundice, and newborn metabolic testing.

Additional information about Natus Medical can be found at

Forward Looking Statements

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include, but are not limited to, statements regarding the market potential for the Cool-Cap® and CFM 6000 Cerebral Function Monitor® products as well as acceptance of the therapy as a standard of care for the treatment of HIE. These statements relate to future events or Natus' future financial performance or results, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Our future results could differ materially due to a number of factors, including the effects of competition, the demand for our products and services, our ability to expand our sales in international markets, our ability to maintain current sales levels in a mature domestic market, our ability to control costs, and risks associated with bringing new products to market and integrating acquired businesses. Natus disclaims any obligation to update information contained in any forward-looking statement.

More information about potential risk factors that could affect the business and financial results of Natus is included in Natus' annual report on Form 10-K for the year ended December 31, 2005, and its quarterly reports on Form 10-Q, and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission.

Source: Natus Medical

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