TEMPE, Ariz., March 5, 2008 (PRIME NEWSWIRE) -- OrthoLogic Corp. (Nasdaq:OLGC) today announced operating results for the year ended December 31, 2007. The Company also announced that its Board of Directors has approved a stock repurchase program for up to five percent of its currently outstanding common shares. The shares may be repurchased from time to time in open market transactions or privately negotiated transactions at the Company's discretion, subject to market conditions and other factors. At February 29, 2008, there were approximately 41.8 million shares of common stock outstanding.

OrthoLogic reported a net loss for the year ended December 31, 2007 of $10.1 million, or $0.24 per share, compared to a net loss of $31.9 million, or $0.78 per share, for the year ended December 31, 2006. The $21.8 million decrease in net loss in 2007 compared to the same period in 2006 resulted primarily from the following: $8.5 million purchased in-process research and development costs in 2006; a decrease of $2.0 million in non-cash stock compensation expense; reduced costs in 2007 reflecting management changes and staff reductions occurring in the first half of 2006; a $5.5 million decline in clinical costs related to the Company's fracture repair Phase 3 and Phase 2b clinical trials, which were substantially completed as of December 31, 2006; a Chrysalin product platform patent impairment loss of $2.1 million recorded in 2006, and the recognition in 2006 of income tax expense related to the recording of a valuation allowance of $1.1 million for a deferred tax asset related to an Alternative Minimum Tax credit carryover.

The Company began 2007 with $70.2 million in cash and investments and ended the year with $60.6 million in cash and investments, a net change of $9.6 million versus original guidance of $18.0 million to $19.0 million and revised guidance of $12.0 million. For 2008, the Company forecasts a cash burn of $16.0 million to $18.0 million.

Conference Call Information

Management will host a conference call and webcast on Wednesday, March 5, 2008 at 1:30 pm PST/2:30 pm MST/4:30 pm EST. The call may be accessed at 877-440-5784 (domestic), 719-325-4928 (international), or by logging onto the "Investors" section of the Company's website, www.orthologic.com. An accompanying slide set entitled "OLGC YE2007 Operating Results 05-Mar-2008.pdf" can be accessed via the "Corporate Presentation" tab in the "Investors" section of the website.

A replay will be available beginning March 5, 2008 at 7:30 PM EST until midnight March 7, 2008 and may be accessed at 888-203-1112 (domestic) or 719-457-0820 (international) with access code 4224965.

About OrthoLogic

OrthoLogic is a biotechnology company committed to developing a pipeline of novel therapeutic peptides aimed at helping patients with under-served medical conditions. The Company is focused on development and commercialization of two product platforms: AZX100 and Chrysalin(r) (TP508).

AZX100 is a novel synthetic clinical-stage 24-amino acid peptide, one of a new class of compounds in the field of smooth muscle relaxation and fibrosis. Based on its demonstrated effects in pre-clinical models, AZX100 is currently being evaluated for commercially significant medical applications such as the treatment of pulmonary disease, intimal hyperplasia and the prevention of hypertrophic and keloid scarring. OrthoLogic has an exclusive worldwide license to AZX100.

Chrysalin, the Company's novel synthetic 23-amino acid peptide, has been proven in multiple pre-clinical and clinical models to stimulate cellular events leading to angiogenesis, revascularization, and repair of dermal and musculoskeletal tissues. It is being studied in disorders that involve vascular endothelial dysfunction. The Company owns exclusive worldwide rights to Chrysalin.

OrthoLogic's corporate headquarters are in Tempe, Arizona. For more information, please visit the Company's website: www.orthologic.com.

Statements in this press release or otherwise attributable to OrthoLogic regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: delays in obtaining or inability to obtain FDA, institutional review board or other regulatory approvals of pre-clinical or clinical testing; unfavorable outcomes in our pre-clinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our products; our possible need for additional capital in the future to fund the continued development of our product candidates; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2007, and other documents we file with the Securities and Exchange Commission.

Editors' Note: This press release is also available under the Investors section of the Company's Web site at www.orthologic.com.



                       ORTHOLOGIC CORP. 
                (A Development Stage Company) 
                        BALANCE SHEETS 
          (in thousands, except share and per share data)

                                                      December 31,
                                                  --------------------
                                                    2007       2006
                                                  ---------  ---------
 ASSETS
 Current assets
   Cash and cash equivalents                      $  20,943  $  18,047
   Short-term investments                            18,236     35,977
   Prepaids and other current assets                    906      1,950
                                                  ---------  ---------
     Total current assets                            40,085     55,974

 Furniture and equipment, net                           318        409
 Long-term investments                               21,459     16,206
                                                  ---------  ---------
   Total assets                                   $  61,862  $  72,589
                                                  =========  =========

 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities
   Accounts payable                               $     702  $   1,621
   Accrued compensation                                 658        584
   Accrued clinical                                       1        133
   Accrued severance and other restructuring costs      166        366
   Other accrued liabilities                            874        737
                                                  ---------  ---------
     Total current liabilities                        2,401      3,441


 Stockholders' Equity
 Common Stock  $.0005 par value;                         21         21
   100,000,000 shares authorized; 41,758,065
   and 41,564,291 shares issued and outstanding
 Additional paid-in capital                         189,013    188,236
 Accumulated deficit                               (129,573)  (119,109)
                                                  ---------  ---------
    Total stockholders' equity                       59,461     69,148
                                                  ---------  ---------
     Total liabilities and stockholders' equity   $  61,862  $  72,589
                                                  =========  =========


                          ORTHOLOGIC CORP. 
                   (A Development Stage Company) 
                      STATEMENTS OF OPERATIONS 
                (in thousands, except per share data)
                                                        
                                                           As a  
                           Years Ended December 31,    Development
                          -------------------------    Stage Company
                                                     August 5, 2004 -
                           2007     2006      2005   December 31, 2007
                          -------  -------  -------  -----------------
 OPERATING EXPENSES
   General and
    administrative        $ 3,738  $ 6,558  $ 4,910  $          17,084
   Research and
    development             9,641   19,661   25,444             62,826
   Purchased in-process
    research and
    development                      8,471       --             34,311
   Other gains                                 (250)              (375)
                          -------  -------  -------  -----------------
     Total operating
      expenses             13,379   34,690   30,104            113,846
   Interest and other
    income, net            (3,278)  (3,883)  (2,640)           (10,552)
                          -------  -------  -------  -----------------
   Loss from continuing
    operations before
    taxes                  10,101   30,807   27,464            103,294
   Income tax expense
    (benefit)                        1,106     (108)               356
                          -------  -------  -------  -----------------
     Loss from continuing
      operations           10,101   31,913   27,356            103,650
  Discontinued operations
   - net gain on the sale
   of the bone device
   business, net of taxes
   of $0, $0, $96, ($267)
   respectively                --       --     (154)            (2,202)
                          -------  -------  -------  -----------------
     NET LOSS             $10,101  $31,913  $27,202  $         101,448
                          -------  -------  -------  -----------------
 Per Share Information:
   Net loss, basic and
    diluted               $  0.24  $  0.78  $  0.72
                          =======  =======  =======
   Basic and diluted 
    shares outstanding     41,644   40,764   38,032
                          -------  -------  -------


                          ORTHOLOGIC CORP. 
                   (A Development Stage Company) 
                      STATEMENTS OF CASH FLOWS 
                           (in thousands)

                                                             As a
                                                          Development
                                                         Stage Company
                                                           August 5,
                                                             2004 -
                           Years Ended December 31,       December 31,
                          2007       2006       2005         2007
----------------------------------------------------------------------
 OPERATING ACTIVITIES
 Net loss               $(10,101)  $(31,913)  $(27,202)  $    (101,448)
 Non Cash items:
   Deferred tax expense       --      1,106         --             770
   Depreciation and
    amortization             169      2,833        392           3,434
   Non-cash stock
    compensation             777      2,781        162           3,720
   Gain on sale of bone
    device business           --         --       (250)         (2,298)
   In-process research 
    and development           --      8,471         --          34,311
 Change in other 
  operating items:                                                  --
   Prepaids and other
    current assets         1,044     (1,094)       424             803
   Accounts payable         (919)       334        203            (269)
   Accrued liabilities      (384)    (1,422)      (294)         (1,317)
                        --------   --------   --------   -------------
     Cash flows used in
      operating
      activities          (9,414)   (18,904)   (26,565)        (62,294)
                        --------   --------   --------   -------------
 INVESTING ACTIVITIES
   Expenditures for
    furniture and
    equipment, net          (178)      (196)      (268)           (693)
   Proceeds from sale
    of assets                 --         --      7,000           7,000
   Cash paid for assets 
    of AzERx/CBI              --       (390)        --          (4,058)
   Cash paid for patent
    assignment rights         --       (250)      (400)           (650)
   Purchases of
    investments          (51,395)   (56,509)   (48,823)       (197,289)
   Maturities of
    investments           63,883     52,847     65,502         215,532
                        --------   --------   --------   -------------
     Cash flows provided
      by (used in)
      investing
      activities          12,310     (4,498)    23,011          19,842
                        --------   --------   --------   -------------
 FINANCING ACTIVITIES
   Net proceeds from stock
    option exercises          --      2,962        288           4,612
   Net proceeds from sale
    of stock                  --      3,376         --           3,376
                        --------   --------   --------   -------------
     Cash flows provided
      by financing
      activities              --      6,338        288           7,988
                        --------   --------   --------   -------------
 NET INCREASE (DECREASE)
  IN CASH AND CASH
  EQUIVALENTS              2,896    (17,064)    (3,266)        (34,464)
 CASH AND CASH
  EQUIVALENTS,
  BEGINNING OF PERIOD     18,047     35,111     38,377          55,407
                        --------   --------   --------   -------------
 CASH AND CASH
  EQUIVALENTS,
  END OF PERIOD         $ 20,943   $ 18,047   $ 35,111   $      20,943
                        ========   ========   ========   =============

 Supplemental Disclosure
  of Non-Cash Investing
  Activities
   AzERx / CBI Acquisitions
   Current assets
    acquired            $     --   $     --   $     --   $          29
   Patents acquired           --         --         --           2,142
   Liabilities acquired,
    and accrued acquisition
    costs                     --       (317)        --            (457)
   Original investment
    reversal                  --         --         --            (750)
   In-process research and
    development acquired      --      8,471         --          34,311
   Common stock issued for
    acquisitions              --     (7,764)        --         (31,217)
                        --------   --------   --------   -------------
     Cash paid for
      acquisitions      $     --   $    390   $     --   $       4,058
                        ========   ========   ========   =============
OrthoLogic Corp.
Investor Relations
Karen Struck
(602) 286-5250
kstruck@olgc.com

The Trout Group
Lauren Glaser
(415) 392-3310
lglaser@troutgroup.com