OrthoLogic Announces Publication of Preclinical Data on Fracture Repair; Data Offers Further Insight into Chrysalin's Mechanism

OrthoLogic Corp. (Nasdaq:OLGC), today announced the
publication of a key preclinical study in support of the ongoing
Chrysalin (TP508) fracture repair program.
   This preclinical study, published in the current volume of Journal
of Orthopaedic Research, the official publication of the Orthopedic
Research Society, was conducted as collaboration among researchers led
by Dr. Joseph Lane of the Hospital for Special Surgery in New York,
Dr. Xinmin Li of the University of Chicago and Dr. James Ryaby, chief
scientific officer of OrthoLogic.
   This study tested the hypothesis whether Chrysalin injected into
an experimental fracture would upregulate genes that control the
inflammatory phase of fracture repair, and whether this would result
in an earlier appearance of new vasculature into the fracture callus.
Specifically, this study used Affymetrix genomescale profiling to link
early gene expression changes to fracture histology and bone strength
changes.
   The first stage of this study showed that treatment of fractures
with Chrysalin accelerated fracture repair as demonstrated by
mechanical testing analysis, which measures the strength of the
healing fracture. The second stage used blinded histological analysis
to quantify the amount of new blood vessels in the healing fracture
callus. The results showed Chrysalin-treated fracture callus had a
significant increase in blood vessels relative to the controls. The
final stage of this study used genome array analysis to assess changes
in specific gene expression upon Chrysalin treatment. This gene array
analysis showed that Chrysalin induced expression of inflammatory
response modifiers and angiogenesis-related genes.
   The study's conclusion states: "Chrysalin promotes fracture repair
through a mechanism that involves an increased induction of a number
of growth factors, enhanced expression of inflammatory mediators and
angiogenesis-related genes."
   "We believe studies such as these are critical for developing
peptide-based therapeutics such as Chrysalin, and follow-up studies
are underway to expand upon these results," said Dr. Ryaby. "These
studies will be used to educate physicians on the mechanism of action
of Chrysalin and provide additional evidence of Chrysalin's mechanism
of action for other indications in orthopedic, dermal and
cardiovascular tissue repair."

   About Chrysalin(R)

   Chrysalin (TP508) is a 23-amino acid peptide that represents the
receptor-binding domain of the human thrombin molecule, the naturally
occurring agent responsible for blood clotting and initiating many of
the cellular events responsible for repair in both soft tissue and
bone.
   All cells contain high-affinity thrombin receptors, which led to
the hypothesis that thrombin did more than form blood clots after
wounding. It was discovered that thrombin acted as a signaling
molecule to initiate the early stages of tissue repair. The basis for
the development of Chrysalin started in 1985, when a class of
synthetic peptides was developed representing a specific
receptor-binding domain of thrombin that activates specific
wound-healing signals.
   Drugs based on the Chrysalin peptide can be used to mimic part of
the thrombin response without stimulating the events associated with
blood clotting and therefore have the potential to accelerate the
natural cascade of healing events.

   About OrthoLogic Corp.

   OrthoLogic is a drug-development company focused on
commercializing several potential therapeutics comprising the
Chrysalin(R) Product Platform, a series of product candidates aimed at
treating traumatic and chronic orthopedic indications in bone and soft
tissue as well as cardiovascular repair and wound healing. All of
these potential products are based on the Chrysalin synthetic peptide,
also known as TP508.
   OrthoLogic owns an exclusive license for all worldwide medical
indications for the peptide, and is actively pursuing five orthopedic
indications for Chrysalin. These include fracture repair and spine
fusion, which are in human clinical trials, and cartilage defect
repair, which is in late-stage preclinical trials. Ligament and tendon
repair indications are in the preclinical studies stage. In
non-orthopedic areas, a human clinical trial for chronic diabetic
ulcers has been completed. OrthoLogic's product development pipeline
also includes Chrysalin-based product candidates for dental bone
formation and myocardial revascularization.
   For more information, please visit the company's Web site:
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 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 Chrysalin Product Platform; and other factors discussed in our
Form 10-K for the fiscal year ended December 31, 2004 our Form 10-Q
for the quarter ended March 30, 2005, and other documents we file with
the Securities and Exchange Commission.