Corporation: Investors and Media: Cyanotech Corporation Guerrant Associates Jeffrey H. Sakamoto Laura Guerrant (808) 326-1353 (808) 882-1467 jsakamoto@cyanotech.com lguerrant@guerrantir.co

CYANOTECH CORPORATION PROVIDES UPDATE ON POND

Hawaii. December 14, 2004 Cyanotech Corporation (Nasdaq: CYAN), a world leader

in producing high-value natural products from microalgae, today provided an

update on the Company s expansion and conversion of certain of its culture

ponds from Spirulina production to astaxanthin production. Of the 10 ponds identified for conversion,

the Company anticipates that 6 ponds will be completed by the end of this

In the company s 2nd

Quarter Fiscal 2005 press release dated November 1, 2004, it was noted that demand for

natural astaxanthin during the quarter had been impacted by inclement

environmental factors in Japan which affected customers fish farming

operations, as well as by competitive pricing issues from synthetic astaxanthin

aquaculture products in Europe. In

addition, the Company had also noted that over the next two quarters (fiscal

year 2005 3rd and 4th quarters, respectively), demand for

its natural astaxanthin in aquaculture was anticipated to be level with that of

the second quarter. However, also in the

same release, the Company stated that demand in the future is expected to

rebound to levels consistent with prior demand patterns. In

response to such shift in product demand, the Company is deferring the

conversion of the four remaining ponds for the continuing cultivation of

Chairman, President and Chief Executive Officer, Gerald R. Cysewski, said, When

we implemented the conversion of our ponds, our intent was to increase our

flexibility to adjust production of both of our products as required so that we

would be in a better position to respond to the varying demands of the

marketplace. The benefits of this have

been immediate. By rapidly assessing

market demand we are able to improve our response and adjust our cultivation

accordingly. In this instance, we

experienced reduced demand for astaxanthin in the aquaculture market and

retained for Spirulina production the remaining ponds marked for conversion. Dr. Cysewski concluded, As we see conditions

improving in the aquaculture markets, the Company will reassess the timing and appropriateness of full

Cyanotech Corporation, a world

leader in microalgal technology, produces high-value natural products from

microalgae and is the world s largest commercial producer of natural

astaxanthin (pronounced asta-zan-thin ) from microalgae. Products include BioAstin natural

astaxanthin, a powerful antioxidant with expanding applications as a human

nutraceutical; NatuRose natural astaxanthin for the aquaculture and animal

feed industries; Spirulina Pacifica , a nutrient-rich dietary supplement; and

phycobiliproteins, which are fluorescent pigments used in the immunological

diagnostics market. Spirulina Pacifica

and BioAstin are sold directly online through the Company s website,

www.nutrex-hawaii.com, as well as through resellers in over 30 countries

worldwide. Technical information for the

Company s phycobiliproteins products is available at www.phycobiliprotein.com.

Corporate data and other product information are available at

Harbor Statement under the Private Securities Litigation Reform Act of 1995

Except for statements of historical fact, the

statements in this press release are forward-looking. Such statements are subject to a number of

risks and uncertainties that could cause actual results to differ materially

from the statements made. These factors

include, but are not limited to, general economic conditions, forecasts of

sales in future periods, changes in sales levels to our largest customers,

weather patterns, risks associated with the acceptance of new products,

competition, foreign exchange fluctuations, government regulation, and other

factors more fully detailed in the Company s recent Form 10-Q and annual form

10-K filings with the Securities and Exchange Commission.