Results Of Phase 3 Clinical Trial Of Chrysalin(R) (TP508) In Fracture Repair

OrthoLogic Corp. (Nasdaq: OLGC) today announced results of an analysis of topline data from its
Phase 3 clinical trial of the novel synthetic peptide Chrysalin(R) (TP508) in
unstable, displaced distal radius (wrist) fractures. Treatment with 10ug
Chrysalin did not demonstrate a statistically significant benefit compared to
placebo in the primary efficacy endpoint of time to removal of immobilization.


A secondary endpoint, radiographic evidence of time to radial cortical
bridging, showed a statistically significant benefit for Chrysalin-treated
subjects (p = 0.049). This benefit mirrored findings from the Phase 1/2
clinical trial that provided part of the foundation for the Phase 3 study. No
difference was observed between Chrysalin treatment and placebo in the other
secondary endpoints.


The trial met the pre-specified safety endpoint by demonstrating no
significant difference in adverse event rates between the Chrysalin and
placebo groups.


"We will be conducting a full examination of these results in order to
guide our program going forward, including a planned interim analysis of
results from the ongoing Phase 2b dose ranging trial of Chrysalin in distal
radius fractures, which includes a 30ug dose," commented James M. Pusey, MD,
President and CEO of OrthoLogic.


The Company expects to communicate results of its interim analysis during
the third quarter of 2006.


Study Description


The study was a prospective, double-blind, randomized, placebo-controlled
Phase 3 clinical trial designed to evaluate the safety of Chrysalin and its
efficacy regarding the rate of healing in adult subjects with unstable and/or
displaced distal radius fractures. Subjects were randomized to receive a
single 1mL percutaneous injection of Chrysalin at 10 ug or placebo
administered into the fracture site under fluoroscopic guidance. Five hundred
three subjects were enrolled at 27 active centers in the United States.


Subjects were evaluated post-surgery at weeks 1-8, 10, 12, 26 and 52. The
primary efficacy endpoint was time to removal of all immobilization, defined
as the elapsed time between the date of fracture surgery and the first study
visit at which the investigator, based on clinical and radiographic
assessments of healing, removed all rigid immobilization hardware used to
stabilize the fracture.


Secondary efficacy endpoints included:


* Time to clinical and radiographic bone healing


* Assessment of the fractured wrist range of motion and grip strength
relative to the contralateral limb


* Clinical outcomes as measured by the Patient Rated Wrist Evaluation
questionnaire


Safety was measured as the proportion of subjects with treatment-emergent
adverse events.


About OrthoLogic


OrthoLogic is a biotechnology company focused on the development and
commercialization of the novel synthetic peptide Chrysalin(R) (TP508) in two
lead indications, both of which represent areas of significant unmet medical
need -- fracture repair and diabetic foot ulcer healing. Based on the
Company's pioneering scientific research of the natural healing cascade,
OrthoLogic has become a leading company focused on tissue and bone repair.
The Company owns exclusive worldwide rights for Chrysalin.















OrthoLogic is committed to developing a pipeline of novel peptides and
other molecules aimed at helping patients with equally under-served
conditions. The Company has an exclusive worldwide license to the novel
pre-clinical 24-amino acid peptide AZX100, the first of a new class of
compounds in the field of smooth muscle relaxation called Intracellular Actin
Relaxing Molecules, or ICARMs(TM). AZX100 is currently being investigated for
medically and commercially significant applications, such as the treatment of
vasospasm associated with subarachnoid hemorrhage, the prevention of keloid
scarring and the treatment of asthma.


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


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 preclinical or clinical testing; unfavorable outcomes
in our preclinical 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, 2005, and other documents we file with the
Securities and Exchange Commission.


OrthoLogic Corp.

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