Research Triangle Park, North Carolina
August 12, 2002

Paradigm Genetics, Inc. (Nasdaq: PDGM), a life sciences company, today reported financial results for the second quarter ended June 30, 2002.

For the three months ended June 30, 2002, total revenue decreased 13% to $5.3 million, compared to $6.1 million for the same period in 2001. For the six months ended June 30, 2002, total revenue decreased 3% to $11.1 million compared to $11.5 million for the same period in 2001. The decrease in revenue resulted primarily from lower throughput in the GeneFunction Factory(TM) under Paradigm's commercial partnership with Bayer AG. However, this decrease was partially offset by higher throughput in the GeneFunction Factory(TM) under the commercial partnership with The Monsanto Company and revenue derived from the ParaGen plant genotyping business, which the company acquired in December 2001.

Total operating expenses for the three months ended June 30, 2002 were $10.2 million compared to $10.5 million for the same period in 2001. Total operating expenses for the six months ended June 30, 2002 were $21.2 million compared to $20.1 million for the same period in 2001. Second quarter 2001 operating expenses included a one-time charge of $0.9 million relating to an acquisition that the company subsequently ceased pursuing. Excluding the one-time charge, operating expenses increased by 6% for the three months ended June 30, 2002 compared to the same period in 2001 and by 10% for the six months ended June 30, 2002 compared to the same period in 2001. The increase in operating expenses resulted primarily from the company's investment in its MetaVantage(TM) human metabolomics platform, investments in informatics-based technologies and expenses associated with
operating ParaGen.

Including non-cash compensation charges, the company reported a second quarter 2002 net loss of $5.0 million, or $0.16 per common share. This compares to a net loss of $4.3 million, or $0.16 per common share, for the same period in 2001. Excluding the non-cash compensation charges, the net loss for the three months ended June 30, 2002 would have been $4.9 million, or $0.15 per common share. For the six months ended June 30, 2002, the company reported a net loss of $10.2 million, or $0.32 per common share, which includes non-cash compensation charges of $416,000. This compares to a net loss of $8.3 million, or $0.32 per common share, for the same period in 2001.

"Paradigm is going through a transition period, but we're on track towards our goal of profitability and sustainability," said Heiri Gugger, Ph.D., President and Chief Executive Officer. "Together with the Board, we are crystallizing our strategy and business model. We are controlling operations and we're building the expertise of our executive team. By leveraging Paradigm's core competencies, I believe we can capitalize on untapped opportunities in agriculture and clearly define our business opportunity in
human health."

Highlights
During the second quarter 2002, Paradigm:

• Received, a joint, five-year, $11.7 million Advanced Technology Program (ATP) grant from the National Institute of Standards and Technology. The grant will be shared in equal amounts between Paradigm and LION bioscience AG. It is the largest grant the ATP has ever made in the area of bioinformatics. The federal funding will support the development of a Target Assessment Technologies Suite (TATS). This suite of technologies is intended to increase the number and success rate of validated targets for product development by the pharmaceutical
  and other life sciences industries.
• Signed an agreement with Bio-Technical Resources (BTR), a division of Arkion Life Sciences LLC, co-market technologies to the enzyme and microbial-based bio-processing industry. Under the terms of the agreement, Paradigm and BTR will jointly market services, such as biochemical profiling, metabolic engineering, strain improvement and process development, to improve the production of industrial enzymes and metabolites, such as vitamins, amino acids and pharmaceuticals.
• Successfully resolved outstanding issues with John A. Ryals, Ph.D., Paradigm's former president and CEO, relating to the cessation of his employment, and subsequent to the end of the quarter, recruited and hired Heiri Gugger, Ph.D., as president and CEO.

Paradigm Genetics, Inc., headquartered in Research Triangle Park, NC, is a life sciences company using genomics and metabolomics-based technologies to speed the discovery of products for agriculture and human health. In agriculture, Paradigm has unlocked the potential of functional genomics through its GeneFunction Factory(TM) industrialized technology platform, which links gene expression profiling, biochemical profiling, and phenotypic profiling to create industry-leading genomic knowledge and intellectual property advantages. Also, Paradigm offers plant breeders genotyping, molecular breeding and genomic services to accelerate product development through its business unit ParaGen. In human health, Paradigm partners with pharmaceutical and other biotechnology companies to transform drug discovery and development by significantly enhancing the study of drug targets,
lead compounds, and predictive medicine. The company's proprietary MetaVantage(TM) metabolomics platform elucidates the metabolic profile of a cell, tissue, or fluid, and integrates this information with data from other genomics analyses using its proprietary comprehensive informatics system.