Icoria, Inc. (Nasdaq: ICOR), today reported financial results for the quarter ended September 30, 2004.

Icoria’s strong performance under its existing contracts and growing acceptance of its gene expression business led to its highest-ever quarterly revenues. For the third quarter of 2004, overall revenues increased by 19% to $7.1 million as compared to $6.0 million in the third quarter of 2003. Revenue for the nine months ended September 30, 2004 increased nearly 17% to $18.3 million as compared to $15.7 million in the same period in 2003.

“We are very pleased to report the highest ever quarterly revenue in company history due primarily to increasing revenues earned on our existing contracts with the National Institute of Environmental Health Sciences and Pioneer, which offset the expected decline in revenues from our more mature contracts with Monsanto and Bayer,” said Heinrich Gugger, Ph.D. “During the third quarter, we also expanded the capabilities of our Paradigm Array Labs (“PAL”) gene expression service business through the addition of laser capture microdissection services, microRNA detection and analysis services and Good Laboratory Practice (“GLP”) compliance. These new offerings have led to the signing of new contracts with pharmaceutical companies, which we expect to positively impact our PAL revenue during the fourth quarter of 2004.”

Dr. Gugger continued, ”In addition, our healthcare team is continuing to work on two customer pilot projects, one of which has entered into a second phase, and we are hopeful that they will result in larger follow-on contracts. We also continue to make meaningful progress with our Agriculture programs as demonstrated by several new fungicide patents granted to Icoria during the past year. Finally, with the closing of our recently announced $5 million convertible debt financing in October, we have extended our ability to vigorously pursue our business opportunities by strengthening our liquidity position.”

Total operating expenses for the third quarter 2004 increased to $10.1 million, or by 26%, compared to $8.1 million in the third quarter 2003. For the nine months ended September 30, 2004, total operating expenses increased to $28.5 million, or by 13%, as compared to $25.1 million in the same period in 2003. These operating expenses reflect the second full quarter of costs related to Icoria’s acquisition of TissueInformatics.Inc on March 11, 2004. The increases in operating costs for both the quarter and nine month period ended September 30, 2004 were due primarily to materials costs associated with higher revenues from the Company’s contract with the National Institute of Environmental Health Sciences, the evolution of its research anddevelopment programs, additional sales and marketing costs associated with the expansion of our offerings and amortization of intangible assets associated with the TissueInformatics.Inc acquisition.

Icoria reported a third quarter 2004 net loss of $3.1 million, or $0.08 per common share, or 36% higher than the third quarter 2003 net loss of $2.2 million, or $0.07 per common share. For the nine months ended September 30, 2004, Icoria reported a net loss of $10.3 million, or $0.29 per common share, which is a 4% increase over the prior period net loss of $9.9 million, or $0.31 per common share.

As of September 30, 2004, the Company reported unrestricted cash, cash equivalents and short-term investments in the amount of $7.1 million.

During the third quarter of 2004, the Company reached an agreement with General Electric Capital Corporation (GECC), which permitted the Company to prepay without penalty the remaining note balance with GECC through payments of $0.3 million in each of September and October 2004. In addition, payments from two customers totaling over $1 million, which were due and expected to be received during the quarter, were delayed until the first week of October 2004. Excluding the prepayment to GECC and the delay in customer receipts, the net decrease in cash, cash equivalents and investments (“cash burn”) for the third quarter 2004 was $2.3 million, which consisted of $1.3 million from operating activities, $0.5 million for capital expenditures and $0.5 million for recurring term debt and capital lease obligations. During the same period in 2003 the comparable net cash burn was $2.2 million, excluding the impact of new borrowings during that quarter.

Icoria’s Significant Third Quarter and Recent Accomplishments and Activities:

The Company has previously announced the following accomplishments and activities (by release date), the full text of which may be found on our web site at www.icoria.com/news:

• Icoria expands patent portfolio through the grant of its sixth fungicide target patent (October 26, 2004).
• Icoria raises $5 million gross proceeds through the sale of a three-year Secured Convertible Term Note in a private placement with Laurus Master Fund, Ltd. (October 21, 2004).
• Icoria signs an agreement with Rosetta Genomics, Ltd. to commercialize Rosetta Genomics’ proprietary MirChip microRNA technology (October 18, 2004).
• Icoria expands partnering with Agilent Technologies to Include $11.7 Million ATP grant for Informatics (October 7, 2004).
• Icoria offers GLP compliant gene expression profiling services through its Paradigm Array Labs services unit (September 20, 2004).
• Icoria changes its Corporate Identity from Paradigm Genetics, Inc. to Icoria, Inc. to reflect its strategic transformation into a cutting-edge systems biology company (August 18, 2004).
• Icoria enters into collaboration with Arcturus Biosciences to provide microgenomics and laser capture microdissection technology services (August 12, 2004).

About Icoria Icoria is an integrated systems biology company applying its proprietary platform to the discovery and development of safer, more effective drugs and agrichemicals. Icoria has major contracts with the National Institute of Environmental Health Sciences, Bayer CropScience, the Monsanto Company, Pioneer Hi-Bred International (a subsidiary of DuPont) and L'Oréal Inc. Icoria also has a major grant from the National Institute of Standards & Technology's Advanced Technology Program.