-- Product Sales Increase 11%, or 15% on a Constant Currency(2) Basis --

-- Company Generates Total Revenues of $116.2 Million, Operating Cash

Flows of $52.0 Million --

SAN DIEGO, April 30 /PRNewswire-FirstCall/ -- Gen-Probe Incorporated (Nasdaq: GPRO) today reported financial results for the first quarter of 2009, including non-GAAP earnings per share (EPS) of $0.51.

"Gen-Probe posted good financial results in the first quarter of 2009, highlighted by a new record in clinical diagnostics product sales, despite significant foreign exchange headwinds," said Henry L. Nordhoff, the Company's chairman and chief executive officer. "In recent weeks, we also completed our Tepnel acquisition and decided to begin a U.S. clinical trial of our PCA3 prostate cancer test, both of which we expect to drive future growth."

As expected, total revenues and net income declined in the first quarter of 2009 compared to the prior year period because the Company recorded $16.4 million of revenue from Bayer in the first quarter of 2008. This non-recurring revenue, which added $0.20 to EPS in the prior year period, represented the third and final payment due to Gen-Probe in connection with the 2006 settlement of the companies' patent infringement litigation.

In the first quarter of 2009, product sales were $112.5 million, compared to $101.5 million in the prior year period, an increase of 11%. Compared to the first quarter of 2008, the stronger U.S. dollar reduced product sales growth by an estimated 4%. Total revenues for the first quarter of 2009 were $116.2 million, compared to $122.6 million in the prior year period, a decrease of 5%. Net income was $27.0 million ($0.51 per share) on a non-GAAP basis in the first quarter of 2009, compared to $31.9 million ($0.58 per share) on a GAAP basis in the prior year period, a decrease of 15% (12% per share). Gen-Probe's non-GAAP results for the first quarter of 2009 exclude $1.6 million ($0.02 per share) of expenses related to the Company's acquisition of Tepnel. Including these expenses, and on a GAAP basis, net income in the first quarter of 2009 was $25.7 million ($0.48 per share).

Detailed Results

Gen-Probe's clinical diagnostics sales in the first quarter of 2009 benefited from continued growth of the APTIMA Combo 2(R) assay, an amplified nucleic acid test (NAT) for simultaneously detecting Chlamydia trachomatis (CT) and Neisseria gonorrhoeae (GC). Sales of this assay increased based on market share gains on both the Company's semi-automated instrument platform and on the high- throughput, fully automated TIGRIS(R) system. Revenue from the PACE(R) product line, the Company's non-amplified tests for the same microorganisms, declined in the first quarter compared to the prior year period, in line with Gen-Probe's expectations. Clinical diagnostics sales also were negatively affected by the stronger U.S. dollar, which reduced growth by an estimated 2% compared to the prior year period.

In blood screening, product sales in the first quarter of 2009 benefited from $8.2 million of one-time revenue associated with the previously announced renegotiation of the Company's collaboration agreement with Novartis Vaccines and Diagnostics. Novartis markets the collaboration's blood screening products worldwide. This benefit was largely offset, however, by the stronger U.S. dollar, which reduced growth by an estimated $2.9 million, or 6%; by $3.9 million of reduced instrument sales to Novartis due to the timing of orders; and by $1.3 million of lower West Nile virus assay shipments due to ordering patterns.

Product sales were, in millions:

Three Months Ended__ March 31,__ Change

__ 2009__ 2008__ Reported__ Constant

Currency

Clinical

diagnostics__ $59.6__ $52.5__ 14%__ 16%

Blood screening__ $52.9__ $49.0__ 8%__ 14%

Total product sales__ $112.5__ $101.5__ 11%__ 15%

Collaborative research revenues for the first quarter of 2009 were $1.7 million, compared to $2.5 million in the prior year period, a decrease of 32% that resulted primarily from two factors: lower reimbursement from Novartis of shared development expenses in the companies' blood screening collaboration; and the absence of reimbursement from 3M resulting from the termination of the companies' collaboration regarding healthcare-associated infections.

Royalty and license revenues for the first quarter of 2009 were $2.0 million, compared to $18.6 million in the prior year period. As discussed, this significant decrease resulted primarily from $16.4 million of revenue from Bayer that was recorded in the prior year period. This revenue represented the third and final payment due in connection with the 2006 settlement of the companies' patent infringement litigation.

Gross margin on product sales in the first quarter of 2009 was 70.4%, compared to 67.8% in the prior year period. This improvement resulted primarily from the renegotiated blood screening agreement with Novartis, increased sales of APTIMA(R) assays, and lower instrument sales. These benefits were offset in part by the stronger U.S. dollar and by unfavorable manufacturing variances.

Research and development (R&D) expenses in the first quarter of 2009 were $25.0 million, compared to $23.1 million in the prior year period, an increase of 8%. This increase resulted primarily from costs associated with U.S. clinical trials of the investigational APTIMA(R) human papillomavirus (HPV) assay and the development of a fully automated instrument system for low- and mid-volume labs, known as PANTHER.

Marketing and sales expenses in the first quarter of 2009 were $11.1 million, compared to $11.9 million in the prior year period, a decrease of 7% that resulted primarily from the timing of specific studies associated with the Company's ongoing European market development efforts for the APTIMA Combo 2, APTIMA HPV and PROGENSA(TM) PCA3 assays.

General and administrative (G&A) expenses in the first quarter of 2009 were $13.8 million, compared to $11.9 million in the prior year period, an increase of 16% that resulted primarily from $1.6 million of expenses associated with the acquisition of Tepnel. As described above, these transaction-related costs have been excluded from the Company's non-GAAP results for the first quarter. Gen-Probe expects to record additional Tepnel-related charges in the second quarter, which also will be excluded from the Company's non-GAAP results.

Total other income in the first quarter of 2009 was $4.6 million, compared to $5.7 million in the prior year period, a decrease of 19% that resulted primarily from the $1.6 million gain recorded in the first quarter of 2008 related to the Company's sale of its equity investment in Molecular Profiling Institute.

Gen-Probe continues to have a strong balance sheet. As of March 31, 2009, the Company had $652.6 million of cash, cash equivalents and marketable securities, and $170.0 million outstanding under a revolving credit facility. The Company currently pays interest on funds borrowed under the credit facility at a floating rate 0.6 percent above the one-month London Interbank Offered Rate (LIBOR), which was recently 0.5 percent.

In the first quarter of 2009, Gen-Probe generated net cash of $52.0 million from its operating activities, more than double the Company's net income. The Company also repurchased approximately 0.9 million shares of its common stock for $35.6 million during the quarter.

Updated 2009 Financial Guidance

"We are updating our guidance based on our solid first-quarter performance and our Tepnel acquisition," said Herm Rosenman, the Company's senior vice president of finance and chief financial officer. "We continue to expect solid growth from our STD franchise, new products and recently acquired business, although we anticipate that blood screening growth will be pressured by the strong dollar and increasing competitive pressures."

In the table below, Gen-Probe's non-GAAP guidance excludes certain expenses related to the Tepnel acquisition, namely transaction costs and the increase in non-cash depreciation and amortization expense required under the rules of purchase accounting. These expenses are forecast to total between $8 million and $10 million in 2009, equating to between ($0.10) and ($0.13) of EPS on a GAAP basis.