Healthcare Industry News:  Magnetoencephalography 

Devices Neurology

 News Release - March 21, 2006

VSM MedTech takes clear lead in MEG market in China

Nanjing Brain Hospital accepts delivery of VSM's functional brain imager

VANCOUVER, March 21 (Healthcare Sales & Marketing Network) - VSM MedTech Ltd. (TSX:VSM ) has become the clear leader in the Chinese market for Magnetoencephalography (MEG) systems after winning another sale for a Chinese hospital. VSM's most recent agreement is for the installation of a 275-channel CTF MEG(TM) functional brain imaging system at Nanjing Brain Hospital, Nanjing, China.

The system for Nanjing Brain Hospital was installed and accepted in February. It represents VSM's third MEG order for China and the first involving a 275-channel system. VSM's initial sale to China, in 2003, was a 151-channel system for Tiantan Hospital, Beijing. The other sale, also a 151- channel system, was announced in November 2005 and is scheduled to be delivered and accepted in the second quarter of 2006 to Xinan Hospital, Chongqing, China. No other MEG manufacturer has more than a single system in China.

"Nanjing Brain Hospital, as one of the top mental health care facilities in China, will help to spread interest in MEG in the Chinese medical community," said Jack Price, VSM's President and Chief Executive Officer. "We have clearly achieved significant momentum for long-term growth in China's large and emerging MEG market, which is entirely for clinical purposes."

VSM was awarded the order in late 2005 but waited for customer acceptance before disclosure because the contract has longer payment terms and consequently more risk than VSM's traditional MEG sales. VSM believes the additional risk is justified because Nanjing Brain Hospital is internationally recognized for its excellence in neurology and the installation will lead to additional sales in Asia. Consistent with VSM's conservative accounting practices, VSM will recognize revenue from the Nanjing installation in the third quarter of 2006 with the associated gross margin recognized in stages over approximately two years starting with the third quarter of 2006.

MEG, because it uses a non-invasive approach in an environment that is comfortable for the patient, is gaining medical acceptance worldwide for the real-time, high-resolution mapping of brain function. MEG, long recognized as a leading-edge research tool, is increasingly in demand in the much larger clinical market for the diagnosis and treatment of neurological disorders.

About VSM MedTech Ltd.

VSM MedTech develops, manufactures and markets medical devices for the diagnosis and treatment of neurological disorders and cardiovascular diseases, and is the world leader in the emerging clinical market for Magnetoencephalography. Targeting significant global market opportunities, VSM equips healthcare providers with noninvasive technology that improves the standard of patient care.

This document may contain forward-looking statements, relating to the Company's operations or to the environment in which it operates, which are based on VSM's operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond VSM's control. A number of important factors, including those set forth in other public filings, could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. VSM disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

For further information

please contact Alan Bayless, Vice President, Investor Relations, VSM MedTech Ltd., Tel: (604) 472-2427, email: abayless@vsmmedtech.com, web: www.vsmmedtech.com


Source: VSM MedTech

Issuer of this News Release is solely responsible for its content.
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