Nutraceutix's CEO Discusses Significance Of Global Alliance with ADM Natural Health and Nutrition; Comments on Q1 Operations

REDMOND, Wash.--(BUSINESS WIRE)--April 3, 2002--Nutraceutix, Inc.'s (OTC BB: NUTX) President and CEO, David T. Howard, discussed the significance of its recently announced agreement with Archer Daniels Midland (NYSE: ADM). On March 29th the companies jointly announced an exclusive licensing agreement had been executed for ADM to use Nutraceutix's patented Controlled Delivery Technology (CDT(TM)) to develop and market dietary supplements.

Howard explained that the alliance, which calls for ADM to market its products using Nutraceutix's CDT technology exclusively, on a global basis, to dietary supplement manufacturers, is significant to both companies for a number of reasons.

"First, for Nutraceutix, the agreement validates our CDT technology platform.

"Second, we view ADM as the best possible partner for the dietary supplement market. We no longer need to actively pursue other nutraceutical alliances. Our partnership with ADM -- an agricultural commodities and products giant with an expanding presence in the nutraceuticals industry -- allows us the freedom to now focus our resources on and pursue partnerships with OTC and pharmaceutical companies to incorporate CDT technology into products for their respective markets.

"The first product to be marketed by ADM is Novasoy(R) Daily Dose(TM). The Novasoy(R) Daily Dose(TM) product represents a new innovation in the category of natural-based soy isoflavones.

"Although ADM has not yet provided estimates for market size or market share, we can look to third-party studies to understand the breadth and depth of the isoflavone market. According to Frost & Sullivan, annual soy isoflavone sales in the U.S. are skyrocketing from $100 million in 1999, to $235 million in 2000, and were estimated to have reached $470 million in 2001. Obviously, the ability of the CDT technology platform to improve the way soy isoflavones are available to the body, particularly when there are long periods between dosings, is an important advantage in this exploding market.

"We will be working closely in the coming months with ADM regarding its market roll-out plans for the introduction of Novasoy(R) Daily Dose. The Novasoy brand is already well established in the U.S. where it is incorporated into more than 50 nutritional supplements marketed to support a range of health benefits from maintaining cardiovascular and bone health to well being during mid-life changes.

"ADM has internally identified subsequent products to include CDT technology and will make its product announcements according to its own timetable," Howard continued.

"And, third, securing an early income stream is part of our refocused business plan which calls for that revenue to help lower our burn rate as we pursue technology development and innovation with the OTC and pharmaceutical partnerships -- the products from which can be very lucrative but which often take two to seven years to bring to fruition.

"We believe that this strategic alliance is important to ADM as well as it moves from being recognized as a provider of ingredients to a provider of ideas, products and solutions for its customers. CDT provides ADM with a means to expand its nutraceutical reach, by bringing that all-important element of product differentiation, and to fulfill its continued commitment to bringing innovation and science to supplements and functional food," said Howard.

Howard also said that the Company is already rebounding from the effects of the one time event (September 11th) which dramatically reduced Q4 2001 revenues. "Sales have increased steadily each month of the first quarter and it looks as though March revenues have returned to targeted levels. We can expect a loss from operations in Q1 but we anticipate returning to operating profitability in our nutraceutical business by Q3. We will continue to invest those profits in our expanding drug delivery technology platform," Howard concluded.

Based in Redmond, Washington, Nutraceutix, Inc. is a biopharmaceutical company that leverages specialized knowledge, proprietary and patented products and technologies such as LiveBac(R) Probiotics and the patented CDT Controlled Delivery Technology platform in order to introduce distinctive and novel OTC products, prescription drugs and dietary supplements. Nutraceutix has established partnerships with pharmaceutical, OTC, and supplement companies to co-develop new products with enhanced benefits. Additional information can be found on the Nutraceutix web site at or by calling 1/800-548-3222.

Except for any historical information, the matters discussed in this press release contain forward-looking statements within the meaning of Section 37A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve risks and uncertainties, including activities, events or developments that the company expects, believes or anticipates will or may occur in the future. A number of factors could cause actual results to differ from those indicated in the forward-looking statements, including the Company's ability to continue to successfully market and provide its products and services and maintain their effectiveness, the continuation of the arrangements with the Company's product development partners, the ability of the Company to meet its financial projections, and general economic conditions. Such statements are subject to a number of assumptions, risks and uncertainties. Readers are cautioned that such statements are not guarantees of future performance and that actual results or developments may differ materially from those set forth in the forward-looking statements. The Company undertakes no obligation to publicly update or revise forward-looking statements whether as a result of new information or otherwise.

--30--rs/la* SJK/la
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