Nanogen POC Manufacturing Consolidation Q&A

Nanogen has announced plans to move the manufacturing of our rapid testing (point-of-care) products from our operations in Toronto, Canada (acquired with the asset purchase of Spectral Diagnostics cardiac business in 2006) to our GMP manufacturing facility at our corporate headquarters in San Diego, California. This consolidation should be seamless and should not cause interruption in the supply or delivery of our rapid cardiac diagnostic products to our customers. We anticipate the Q&A section below will be helpful in answering your questions. Should you have additional questions, please contact the following:

Customer Inquiries: Please call our toll free number at 1-877-NANOGEN (626-6436) and select the number 2. You may also reach us via email at: techsupport@nanogen.com

Investor Inquiries: Please call the main Nanogen line at 1-877-NANOGEN (626-6436) and select 0 to ask to be transferred to Investor Relations. You may also reach us via email at: info@nanogen.com

Customer FAQs

Q – I currently order Cardiac Status or Decision Point products from Nanogen. Will I be able to continue to use this diagnostic test?
A – Yes. We are NOT discontinuing the production of our cardiac rapid test products. We are consolidating our manufacturing operations and moving the responsibility for manufacturing of these products from Toronto to San Diego. The transfer of current operations in Toronto to the Company’s San Diego facility should be completed by the end of 2008.

Q - Should I be concerned about delay or disruption in the receipt of my product orders?
A - We expect this consolidation will be transparent to our customers with no change to the normal supply or delivery of product. However, if you are interested in acquiring a “safety stock” of product for the transition period, our Sales Representatives are available to discuss your specific needs and would be pleased to meet with you to arrange ordering and inventory deliveries.

Q – I call the Toronto office to place product orders and for technical support. If the Toronto facility is no longer in operation, how will my orders be handled and my questions answered?
A – The customer service and technical support teams in Toronto will be maintained throughout the transition period. In addition, customer service and technical support personnel in San Diego are being cross-trained on all our products and will be capable of taking product orders and answering technical questions on the point of care products. Additionally, there are no changes to our field sales and service teams related to this consolidation and your current Sales Representative will remain your key contact.

To place product orders, please continue to use our 1-888-35HEART number or dial our main Nanogen toll free number 1-877-NANOGEN (626-6435) and select the number 1.

To receive technical support, you may continue to use the 1-888-35HEART number or you can use the Nanogen main toll free number 1-877-NANOGEN (626-6435) and select the number 2.

Q - Since you are closing the point of care manufacturing facility in Toronto, does this mean you are exiting or closing the cardiac or rapid testing business?
A – No. We will continue to produce and ship our current cardiac products. Additionally, Nanogen is committed to developing and bringing new rapid testing products to the market. Our whole blood NT-proBNP test for Congestive Heart Failure is expected to be on the market this year and we continue to develop our rapid test for Influenza in collaboration with HX Diagnostics under a contract with the CDC. We view the consolidation as a positive step for the future since both R&D and Manufacturing will be in the same facility and will be more closely aligned as we develop our future rapid testing products.

Investor FAQs

Q - What will be the impact on your financials?
A – We expect to see cost savings of approximately $3 million per year, starting in 2009, related to the closure of the Toronto manufacturing facility and the concomitant reduction in workforce of approximately 30 people. This action will have no impact on our projected revenues as we will continue to manufacture and support the rapid testing (point-of-care) product lines.

Q – Does Nanogen still anticipate a fourth quarter EBITDA breakeven by the end of 2008?
A – The decision to consolidate these operations is driven by our commitment to continue to improve our profitability and will not impact our financial guidance. We continue to expect to reach cash flow breakeven, as defined by our modified EBITDA performance, in late 2008. The full cost saving benefits from this action will be reflected in our results beginning in January 2009.