Lumera Reaches Agreement with the Medical University of South Carolina; MUSC and Lumera Sign Codevelopment Contract to Build Protein Array; MUSC Signs Letter of Intent to Purchase Protein Reader

"Our agreement with MUSC represents a significant milestone forour Bioscience division," said Lumera CEO Tom Mino. "We believe theresearchers at MUSC are truly innovative in their approach todeveloping next generation toxicology methods aimed at speeding up thedrug discovery process. We see great potential for the jointlydeveloped intellectual property."

Lumera's NanoCapture(TM) HPT technology is a proprietary surfacecoating and related methods, which allows proteins to be bound to asurface and remain biologically active. "In the emerging field ofprotein arrays, no standard has been created for attaching proteins toa chip. We believe that with our HPT technology, we are going to beable to define the standard," said Ron Dudek, Lumera's BioscienceProduct Group Manager.

"Lumera's approach is entirely unique," said Dr. Craig Beeson,Associate Professor in the South Carolina College of Pharmacy at MUSC."With the combined power of Lumera's ProteomicProcessor(TM) andNanoCapture(TM) HPT technologies, we feel as though we can catapultour research in mitochondrial biology to the forefront of the drugtoxicology screening arena."

According to market research firm Business Communications Company,Inc., the U.S. market for in vitro toxicology is currently estimatedat $1.1 billion. Forecasted to grow at an average annual growth rateof 12.1%, this market is expected to reach $1.96 billion by 2007.

Although financial terms were not disclosed, under this agreement,Lumera retains rights to commercialize all jointly developedintellectual property.

About MUSC

The Medical University of South Carolina's mission is to preserveand optimize human life in South Carolina and beyond. MUSC is the coreof the state's largest medical complex, its only tertiary/quaternarycare referral center, and its only free-standing academic healthcenter. The university offers a full range of programs in thebiomedical and health sciences serving as a setting for clinicalresearch, contributing financial, facility and intellectual resourcesto conduct research, and providing opportunity for appropriateparticipation of hospital patients in research and treatmentprotocols. MUSC is listed by the National Science Foundation as one ofthe top 100 universities and colleges in the nation for garneringfederal dollars for science and engineering.

About Lumera

Lumera is an emerging leader in the field of nanotechnology. Thecompany designs proprietary molecular structures and polymer compoundsfor a broad range of bioscience, electro-optic, and specialtynanotechnology applications. The company also has developedproprietary processes for fabricating such devices. For moreinformation, please visit http://www.lumera.com/.

Certain statements contained in this release are forward-lookingstatements that involve a number of risks and uncertainties. Factorsthat could cause actual results to differ materially from thoseprojected in the company's forward-looking statements include thefollowing: market acceptance of our technologies and products; ourability to obtain financing; our financial and technical resourcesrelative to those of our competitors; our ability to keep up withrapid technological change; government regulation of our technologies;our ability to enforce our intellectual property rights and protectour proprietary technologies; the ability to obtain additionalcontract awards and to develop partnership opportunities; the timingof commercial product launches; the ability to achieve key technicalmilestones in key products; and other risk factors identified fromtime to time in the company's SEC reports, including in its AnnualReport on 10-K for the year ended December 31, 2003, and its QuarterlyReports on Form 10-Q.