Brachytherapy: An Initial Report.

RELEASE for August 20, 2008

Fourth Quarter & Fiscal Year 2008 Results

Washington (August 20, 2008) IsoRay Inc. (AMEX:ISR), a medical isotope company

focused on the treatment of prostate cancer and other malignant disease through

use of its proprietary radioisotope technology, announces today its financial

results for the quarter and year ended June 30, 2008.

year has seen many changes at IsoRay," said IsoRay Chairman and CEO Dwight

Babcock. "We have made significant steps in focusing on the core business,

gaining efficiencies, lowering the cost structure, and reducing cash

expenditures. With the majority of the operational changes in place we are

actively hiring and building up our sales force in an effort to substantially

improve our top line growth."

the Company's revenues were generated through sales of Proxcelan Cesium-131

seeds for the treatment of prostate cancer. Since

first patient implant in October 2004 over 2,800 prostate cancer patients have

been treated with Cesium-131.

fiscal year 2008, sales revenue increased by 25% to $7,158,690 over fiscal

ordering in fiscal year 2008 have increased 25% to 99, an increase from 79

centers in fiscal year 2007. The increase in Proxcelan sales during the fiscal

year can be attributed mainly to the increased number of centers ordering,

the accruing data from the monotherapy multi-institutional trial that continues

to show homogeneous gland coverage, quicker resolution of side effects, and

rapidly declining PSAs for Proxcelan patients.

for fiscal year 2008 decreased 11% to $8,557,507. Over the past six months,

Company has improved its overall cost structure by refocusing on its core

business and working to further streamline its business processes. This effort

has resulted in improved margins and lower expenses.

revenue increased 7%

$1,760,985 for the fourth quarter ending June 30, 2008 compared to the prior

quarter ended June 30, 2007. Gross

margin for the fourth quarter was $381,139, an improvement of 5,270% over the

gross loss of $7,372 for the prior year fourth quarter and increased 279% from

the gross margin of $100,661 for the previous quarter. Over the past six months,

the Company has focused on improving its production cost structure by improving

isotope forecasting and ordering, labor efficiency, and production procedures.

This focus on the production cost structure has led to improved gross margins

and the Company is continually reviewing its processes to discover additional

for the quarter ended June 30, 2008 was $1,441,439 which represents an

improvement of 47% and 34% over the net loss for the quarters ended June 30,

2007 and March 31, 2008, respectively. The reduced net loss again demonstrates

the Company's improvements in production efficiencies and overall cost structure

during the past six months as discussed above.

Company had cash and short-term investments of $8,546,033 as of June 30,

financial results reported today do not take into account any adjustments that

may be required in connection with the completion of the Company's audit and

review process and should be considered preliminary until IsoRay files its

10-K for the fiscal year ended June 30, 2008.

Company said additional major milestones achieved during the past fiscal year

Company also said that continuing initiatives include:

Inc., through its subsidiary, IsoRay Medical, Inc., is the sole manufacturer

marketer of the Cesium-131 brachytherapy seed, used to treat prostate and other

cancers. The Cesium-131 seed offers a significantly shorter half-life than

two other isotopes commonly used for brachytherapy, which results in a

substantially faster delivery of therapeutic radiation, lower probability of

cancer cell survival and reduction of common brachytherapy side

is based in Richland, Washington. More information is available about IsoRay

CI, Dale RG, Coles IP, et al. The Determination of Radiobiologically Optimized

Half-lives for Radionuclides Used in Permanent Brachytherapy Implants. Int.

Radiation Oncology Biol. Phys. 2003; 55 (2): 378-385.

B.R., Bice W.S., Jurkovic I., et al. Cesium-131 Permanent Prostate

Brachytherapy: An Initial Report. Int. J. Radiation Oncology Biol. Phys. 2005;

in this news release about IsoRay's future expectations, including: the

advantages of our Cesium-131 seed, future demand for IsoRay's existing and

planned products, IsoRay's manufacturing needs and capabilities, whether new

sites will achieve licensure and result in future sales both in the U.S. and

abroad, whether enrichment technology will develop a viable method for producing

enriched barium and create manufacturing efficiencies, and whether IsoRay will

be able to reduce operating costs and increase revenue, and all other statements

in this release, other than historical facts, are "forward-looking statements"

within the meaning of the Private Securities Litigation Reform Act of 1995

("PSLRA"). This statement is included for the express purpose of availing

IsoRay, Inc. of the protections of the safe harbor provisions of the PSLRA.

is important to note that actual results and ultimate corporate actions could

differ materially from those in such forward-looking statements based on such

factors as physician acceptance, training and use of IsoRay's products, changing

levels of demand for IsoRay's current and proposed future products; whether

later studies and protocols support the findings of the initial studies, success

of future research and development activities, IsoRay's ability to successfully

manufacture, market and sell its products, IsoRay's ability to manufacture

products in sufficient quantities to meet demand within required delivery time

periods while meeting its quality control standards, IsoRay's ability to enforce

its intellectual property rights, changes in reimbursement rates, changes in

laws and regulations applicable to our product, and other risks detailed from

time to time in IsoRay's reports filed with the SEC.

Inc. and Subsidiaries

Statements of Operations