Brachytherapy: An Initial Report.

RELEASE for May 12, 2010

INC. REPORTS THIRD QUARTER RESULTS

Washington - IsoRay Inc. (AMEX: ISR) a medical isotope company focusing on the

treatment of prostate, lung, head and neck and other malignant disease through

the use of its proprietary radioisotope technology, announced its financial

results for the third quarter of fiscal year 2010, ended March 31,

revenue for the quarter was approximately $1,203,216 as compared to

approximately $1,366,289 in the third quarter of fiscal 2009. The

Company's revenues during the quarter were primarily generated through the sales

of Proxcelan Cesium-131 seeds for the treatment of primarily prostate

cancer but also had nominal revenues for lung cancer and head and neck cancer

Company recognized a gross income of $52,486 for the three month period ended

March 31, 2010, compared to gross income of $15,245 in the third quarter of

fiscal 2009 and represents a 224% increase.

Company's net loss of approximately $1.1 million for the three months ended

March 31, 2010 compared to approximately $1.5 million loss for the quarter ended

March 31, 2009, representing a 26% improvement.

Company's net cash used by operating activities this past quarter decreased by

18% to approximately $646,000 as compared to approximately $788,000 in the third

quarter of fiscal 2009. The Company had cash and short-term investments of

approximately $2,426,000 as of March 31, 2010.

Babcock, IsoRay Chairman and CEO, commented "While sales are not where we want

them to be, we have completed our first phase of right-sizing Isoray as we

prepare for future growth. Isoray is uniquely positioned as the brachytherapy

isotope provider of choice due to Cesium 131's high energy and short half life,

as well as other characteristics of IsoRay's Cs-131 source. Due to our existing

FDA approvals, I believe we will see revenue grow from non-prostate

applications with increasing numbers of cases as we continue to execute our plan

to position Cs-131 brachytherapy for cancers throughout the body. Increasingly

we are seeing leading physicians request Cs-131 for patients who have an

immediate need for treatment and seek out Cesium-131 as a solution to the

management of challenging oncologic cases.

continuing to evaluate numerous FDA-cleared devices that would expand the use of

our proprietary isotope in both seed and liquid form. In addition we are

investigating other non-medical uses of our isotope to further help secure a

strong revenue base."

Inc., through its subsidiary, IsoRay Medical, Inc., is the sole producer of the

Cesium-131 brachytherapy seed, used to treat prostate and other cancers. The

Cesium-131 seed offers a significantly shorter half-life than the 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 the longevity of common brachytherapy side

effects(a)(b). IsoRay is based in Richland, Washington. More information is

available about IsoRay at www.isoray.com.

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

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

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

Prestidge 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, whether the increase in gross income and decrease in the net

cash used by operating activities seen in the third quarter of fiscal 2010 as

compared to the third quarter of fiscal 2009 will continue in the future,

whether revenue will increase in future periods, whether IsoRay will be able to

expand its base beyond prostate cancer, whether IsoRay's Cesium-131 seed will be

used to treat additional cancers and malignant disease, whether

changes in IsoRay's sales and marketing strategy will result in improved sales,

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. It 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, IsoRay's ability to reduce or maintain net

cash used by operating activities, whether later studies and protocols support

the findings of the initial studies, success of future research and development

activities, whether initial implants of Cesium-131 to treat non-prostate cancers

result in favorable patient outcomes in both the short- and long-term, patient

results achieved when Cesium-131 is used for the treatment of cancers and

malignant diseases beyond prostate cancer, IsoRay's ability to successfully

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

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

months ended March 31