Unassociated Document For Release

First Quarter Results

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

treatment of prostate and other malignant disease through use of its proprietary

radioisotope technology, today announced its financial results for the first

quarter ended September 30, 2008.

Chairman and Interim CEO Dwight Babcock said sales revenue for the quarter

decreased by 18 percent to approximately $1,519,583 as compared to approximately

$1,855,719 in the year-earlier period. However, medical centers ordering

Company's Proxcelan seeds remained steady at 47 compared to the 49 centers that

ordered in the first quarter of fiscal 2008.

Company said that the decline in sales revenue resulted primarily from more

physicians taking vacation this past quarter than during the same quarter

2007 and the annual professional meeting for Radiation Oncologists that fell

September (resulting in additional physician absences) for the first time

the Company began reporting. In addition, the Company incurred turnover in

sales force during the quarter ended September 30, 2008. The Company hired

replacements for the sales force but lost sales opportunities due to recruitment

efforts and reduced time in the field due to sales training of new

decreased from approximately $2,159,401 or $0.09 loss per share in fiscal

2008's first quarter, to approximately $1,793,596 or $0.08 loss per share in the

quarter ended September 30, 2008. The decreased loss was mainly due to reduced

material and production costs and reduced operating expenses as the Company

worked to streamline its operations and become more efficient.

focus is on increasing sales and continuing to streamline

operations," said Babcock. "We lost several members of the sales team this

summer, but have since replaced them with a solid group of proven salespersons.

In addition, we have worked with the sales force to revise our compensation

package to provide for strong growth incentives while providing a solid

during the quarter were generated through sales of Proxcelan Cesium-131 seeds

for the treatment of prostate and ocular melanoma cancers. Since the first

patient implant in October 2004 through April 2008, approximately 3,200 prostate

cancer patients have been treated with Cesium-131.

Company noted that the November issue of Brachytherapy

an article recommending treatment guidelines for physicians in treating prostate

cancer using Proxcelan Cesium-131 brachytherapy seeds. The article represents

the first full clinical manuscript devoted to the use of Proxcelan prostate

seeds to be accepted by a peer-reviewed journal.

said, "We are very pleased to announce the first publication in a peer-reviewed

journal this quarter and will continue our strong push for additional clinical

addition to treatment guidelines developed by the Cesium Advisory Group (CAG),

the report also provides a comprehensive overview of the key differences between

Proxcelan seeds and Iodine-125, another common medical isotope used in

brachytherapy seed treatment for prostate cancer.

guidelines-focusing on the treatment of low, intermediate and high risk prostate

cancer--are based on the combined experience of more than 1,200 Cesium-131

implants and three clinical trials conducted by the most experienced physicians

using Proxcelan in the United States. The report provides technical

recommendations covering all aspects of permanent seed brachytherapy--from

pre-planning to patient release criteria. These recommendations and guidelines

are a tool for any physician who sees the radiobiological advantages of

Cesium-131 but has questions about how to translate the differences

Company had a gross margin of $71,146 for the three-month period ended September

30, 2008 compared to a loss of $149,783 for the three-month period ended

September 30, 2007, for an increase of 147% which was due to reduction in

material costs and more efficient use of manufacturing resources despite the

decrease in revenues.

Company had cash of approximately $3,775,691 and short-term investments of

approximately $3,566,800 as of September 30, 2008.

previously announced, a conference call is scheduled for 1:30 p.m. Pacific

(4:30 p.m. Eastern Time) today to discuss this earnings release. Participants

should dial into the call 10-15 minutes before the scheduled time using the

following numbers: 877-407-9210 (from the US and Canada) or +1 201-689-8049

(from outside the US and Canada). A live webcast of the conference call will

also be accessible via the Internet by going to www.isoray.com,

going to www.investorcalendar.com.

webcast replay will be available until November 26, 2008.

telephonic replay of the conference call will be available by dialing

877-660-6853 (from the US and Canada) or +1 201-612-7415 (from outside the

and Canada) and by entering account number 286 and conference ID number 302540.

An online archive will also be available immediately following the call at

sites noted above. The telephonic replay will be available until November 26,

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

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

process and should be considered preliminary until IsoRay files its Form 10-Q

for the fiscal quarter ended September 30, 2008.

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

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

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, whether

publication of clinical studies and treatment guidelines will result in

increased physician interest, whether changes in IsoRay's sales and marketing

strategy will result in improved sales, 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. It is important to