Healthcare Industry News:  Agility 

Diagnostics Group Purchasing

 News Release - May 11, 2006

IRIS Enters into New Technology Supply Agreement with Novation

Extends Company's Market to Large Group Purchasing Organization

CHATSWORTH, Calif.--(HSMN NewsFeed)--May 11, 2006--IRIS International, Inc. (NASDAQ: IRIS ), a manufacturer and marketer of automated IVD urinalysis systems and medical devices used in hospitals and clinical reference laboratories worldwide, today announced that it has entered into a supply agreement with Novation LLC, the health care contracting services company of VHA Inc. and University HealthSystem Consortium (UHC).

The one-year contract, which includes two one-year extension options and covers IRIS' iQ® Body Fluids Module for use on the iQ®200 Automated Urine Microscopy Analyzer, will become effective May 15, 2006.

"The iQ Body Fluids Module is a key part of the strategic vision of the Company to expand the clinical utility of the iQ200 platform," stated IRIS President and Chief Executive Officer Cesar Garcia. "We are pleased that Novation is introducing this enhanced version of our flagship product into its vast supply chain."

Novation, through its affiliation with VHA Inc. and the UHC, serves the purchasing needs of nearly 3,000 members. VHA and UHC members used Novation's contracts to purchase more than $25 billion in supplies in 2005.

"Novation is committed to ensuring that VHA and UHC members have access to new and innovative health care technology," said Cathy Denning, Senior Director, Contract and Program Services, at Novation. "This is an exciting new technology that will help improve health care delivery and patient outcomes."

Under the agreement, IRIS will also have access to HealthCare Purchasing Partners International® (HPPI), a health care group purchasing organization serving more than 9,000 health care organizations across the nation. HPPI members used its contracts to purchase more than $2.5 billion in supplies in 2005. HPPI was formed by VHA and UHC to serve health care organizations that do not belong to either VHA or UHC.

"Iris Diagnostics is proud to be awarded this supplier contract with Novation," stated Dino Alfano, President of the Iris Diagnostics Division. "The award is in recognition of IRIS' new technology automating urinalysis and body fluids testing together in one system. This combination of technologies brings added clinical and economical value to the VHA and UHC members of Novation."

The Body Fluids Module enables a laboratory to analyze body fluid samples on the iQ200 instrument using the Company's proprietary digital imaging technology. This includes cerebrospinal fluid (CSF) and serous fluids such as peritoneal (abdominal), pericardial (heart), and pleural (lung) in order to examine and count red blood cells and nucleated cells.

ABOUT NOVATION

Based in Irving, Texas, Novation is the leading health care contracting services company, delivering unmatched savings and value to nearly 3,000 members of VHA Inc. and the University Health System Consortium (UHC), two national health care alliances. Through its public competitive bid process, Novation develops and manages contracts with more than 700 suppliers, both large and small. By combining scale and Agility with clinical knowledge and product expertise, Novation offers the most extensive range of innovative contracting services, including: contract development, contract and supplier management, custom contracting, enhanced savings programs, online contract management and analytical tools, order management and online supplier connectivity. VHA and UHC members used Novation's contracts to purchase more than $25 billion in supplies in 2005.

THE COMPANY

IRIS International, Inc. (www.proiris.com) is a leader in automated urinalysis technology with systems in major medical institutions throughout the world. The Company's newest generation iQ®200 Automated Urine Microscopy Analyzer, utilizing image flow cytometry, patented flow microscope technology and neural network-based particle recognition, achieves a significant reduction in the cost and time-consuming steps involved in manual microscopic analysis. The Company's Sample Processing business unit (formerly the StatSpin® subsidiary), based in Westwood, Mass., manufactures innovative centrifuges and blood analysis products. Advanced Digital Imaging Research, LLC (ADIR), based near Houston, Texas, is the Company's imaging research and development subsidiary.

SAFE HARBOR PROVISION

This news release contains forward-looking statements made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, the Company's views on future commercial revenues, market growth, capital requirements, and new product introductions, and are generally identified by phrases such as "thinks," "anticipates," "believes," "estimates," "expects," "intends," "plans," and similar words. Forward-looking statements are not guarantees of future performance and are inherently subject to uncertainties and other factors which could cause actual results to differ materially from the forward-looking statement. These statements are based upon, among other things, assumptions made by, and information currently available to, management, including management's own knowledge and assessment of the Company's industry, competition and capital requirements. Other factors and uncertainties that could affect the Company's forward-looking statements include, among other things, the following: the acceptance by customers of our new iQ®200 product platform, our substantial expansion of international sales and our reliance on key suppliers, the potential need for changes in long-term strategy in response to future developments; future advances in diagnostic testing methods and procedures, as well as potential changes in government regulations and healthcare policies, both of which could adversely affect the economics of the diagnostic testing procedures automated by the Company's products; rapid technological change in the microelectronics and software industries; and increasing competition from imaging and non-imaging based in-vitro diagnostic products. The Company refers interested persons to its most recent Annual Report on Form 10-K and its other SEC filings for a description of additional uncertainties and factors that may affect forward-looking statements. The Company assumes no duty to update its forward-looking statements.


Source: IRIS International

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