* 30% increase in diagnostic lab revenues from Q3-2008 to Q3-2009
 * Progress in litigation regarding $36 million verdict to
   CombiMatrix
 * Sequentially flat diagnostic lab product and service revenues
   from Q2-2009 to Q3-2009
 * Leuchemix clinical trials progressing well
 * Continued progress in company's Comprehensive Cancer Array test
   currently in development

"CombiMatrix continued to solidify its position as an emerging leader in molecular diagnostics, also known as personalized medicine, during the quarter," stated Dr. Amit Kumar, President and CEO of CombiMatrix Corporation. "We remain upbeat about the progress of our Comprehensive Cancer Array test development effort and believe this project, coupled with our stable diagnostic lab business, will strengthen our leadership position in this emerging industry. We are not alone in our view that molecular diagnostics is the most exciting emerging field in the life sciences. As this industry develops, CombiMatrix seeks to continue to be at the forefront."

Dr. Kumar continued, "Although revenues were flat on a sequential basis, we demonstrated strong growth of our diagnostic lab business year-over-year. While economic difficulties and other factors have slowed our diagnostics growth over the last two quarters, we feel that the third quarter of 2009 was the bottom. We are looking forward to getting back onto our growth trajectory beginning with the next quarter. Also, we recently announced that the U.S. 9th Circuit Court of Appeals had scheduled an oral hearing for November 2, 2009 regarding our $36 million verdict against National Union Fire Insurance Company of Pittsburg, PA. National Union was granted a delay and we are waiting for a revised hearing date to be set by the Court. We are pleased that this case is nearing final resolution, and while we cannot predict the timing of a verdict, we hope it will be soon after the hearing."

"Additionally, the strategic discussions we have initiated with RW Baird, our financial advisor, are progressing. Although I am not able to provide specific information about companies contacted or the content of related discussions, I would like to give a general update. We have been in contact with a number of companies and have made, and will continue to make, management presentations to those who express interest. Some potential suitors who have signed non-disclosure agreements have initiated due diligence. These companies do not fit a single mold -- they include both large cap companies and companies in the middle market, as well as financial organizations that have expressed an interest in getting into this space and are seeking a platform. Some companies appear interested in acquiring our whole company, while others seem interested in components that are a strategic fit for them. In time, we expect to be able to evaluate offers, if any, from interested parties. As already noted, the content of our discussions and the identity of contacted parties are confidential, so I cannot provide additional information at this time; however, we intend to provide further updates when we conclude that circumstances are appropriate. I also note that at this time, there is no assurance that we will receive any firm offers from interested parties, or that our management would deem any offers acceptable," concluded Dr. Kumar.

Operating Results - Three Months Ended September 30, 2009 and 2008

Revenues for the third quarter of 2009 were $970,000 versus $1.2 million for the second quarter of 2009 and $1.0 million in the third quarter of 2008. Third quarter 2009 revenues were comprised of $133,000 in government contact revenues, $234,000 in CustomArray(TM) product, equipment and service revenues, and $603,000 in diagnostic lab revenues. Third quarter 2008 revenues were comprised of $343,000 in government contract revenues, $205,000 in CustomArray product, equipment and service revenues and $463,000 in diagnostic lab revenues. Government contract revenues have decreased due to fewer active contracts with the U.S. Department of Defense ("DoD") in the current reporting period than in the comparable historical period. CustomArray product revenues have increased due to slightly higher instrument sales in the current reporting period than in the comparable historical period. Diagnostic laboratory revenues increased during the third quarter of 2009 versus the comparable period in 2008 by 30% due primarily to expanded sales and marketing efforts as well as a larger suite of diagnostic test offerings in the current reporting period than in the comparable 2008 period. The flattening of diagnostic laboratory revenues from the second quarter of 2009 was due primarily to macroscopic factors as well as company specific factors such as the loss of New York business, which we hope to regain soon once our licensure with the state of New York is approved.

Operating expenses for the third quarter of 2009 were $4.7 million versus $4.9 million in the comparable 2008 period. Operating expenses included research and development and marketing, general and administrative expenses of $1.4 million and $2.3 million, respectively, versus $1.3 million and $2.3 million, respectively, in the comparable 2008 period. Included in these amounts were non-cash stock compensation charges totaling $876,000 in the third quarter of 2009 versus $775,000 in the comparable 2008 period.

Net loss for the third quarter of 2009 was $3.3 million versus $4.2 million in the comparable 2008 period. The 2009 results included $531,000 of interest and amortization charges associated with the Company's $8.4 million secured convertible debenture, versus $403,000 in interest charges in the comparable 2008 period. Also, non-cash derivative mark-to-model credits associated with the convertible debenture were $977,000 for the third quarter of 2009 versus $16,000 in the comparable 2008 period.

Operating Results - Nine months Ended September 30, 2009 and 2008

Revenues for the nine months ended September 30, 2009 were $3.7 million versus $5.1 million for the comparable period in 2008. Revenues in 2009 were comprised of $949,000 in government contact revenues, $860,000 in CustomArray product, equipment and service revenues and $1.9 million in diagnostic lab revenues. Revenues in 2008 were comprised of $2.4 million in government contact revenues, $1.6 million in CustomArray product, equipment and service revenues and $1.1 million in diagnostic lab revenues. Government contract revenues have decreased in 2009 due to fewer active DoD contracts than in 2008. CustomArray product revenues have decreased in 2009 due to lower instrument sales than in 2008.