Calypte Only Company with Full Menu of Tests.

The Joint Venture assets include a 2,100-m(2) GMP manufacturing facility located on a 24,000-m(2) site that also contains additional office and warehouse buildings. The Joint Venture acquired these facilities as part of an asset acquisition from Beijing Yaohua Bio-Technology Ltd. The acquisition also includes the rights to 17 diagnostic test products approved by the SFDA, including a rapid HIV-1/2 blood test and other diagnostic tests including various sexually transmitted diseases ("STDs").

Roger I. Gale, Calypte's Chairman and CEO, stated, "We view this acquisition as a crucial milestone in our global strategy. We have completed clinical trials and submitted our application of the Aware(TM) HIV-1/2 rapid oral fluid (OMT) diagnostic test for approval by the SFDA. We are now well on our way to having the facilities and manufacturing licenses we need to deliver substantive sales in China."

About China:

China has a population of approximately 1.4 billion. According to a joint China, World Health Organization and UNAIDS epidemiological survey there were a reported 650,000 adults and children in China living with HIV/AIDS in 2005. China is instituting prominent HIV/AIDS awareness and education programs, and establishing programs to guarantee universal access to treatment. New laws in China include mandatory testing of all military recruits and higher education students. The 2005 prevention budgets of central and local governments as well as the Chinese Ministry of Health now exceed $100 million.

About Calypte Biomedical:

Calypte Biomedical Corporation is a U.S.-based healthcare company focused on the development and commercialization of diagnostic testing products for the detection of sexually transmitted diseases such as the HIV-1 BED Incidence EIA and new diagnostic test products for the rapid detection of HIV and other sexually transmitted diseases, several of which do not require blood samples. Calypte believes there is a significant need for rapid detection of such diseases globally to control their proliferation, particularly in developing countries, which lack the medical infrastructure to support laboratory-based testing. Calypte believes that testing for HIV and other sexually transmitted infectious diseases may make important contributions to public health, and could increase the likelihood of treating those with undetected HIV and other sexually transmitted diseases.

Statements in this press release that are not historical facts are forward-looking statements within the meaning of the Securities Act of 1933, as amended. Those statements include statements regarding the intent, belief or current expectations of the Company and its management. Such statements reflect management's current views, are based on certain assumptions and involve risks and uncertainties. Actual results, events, or performance may differ materially from the above forward-looking statements due to a number of important factors, and will be dependent upon a variety of factors, including, but not limited to, the Company's ability to obtain additional financing, if and as needed, and access funds from its existing financing arrangements that will allow it to continue its current and future operations and whether demand for its test products in domestic and international markets will generate sufficient revenues to achieve positive cash flow and profitability. The Company undertakes no obligation to publicly update these forward-looking statements to reflect events or circumstances that occur after the date hereof or to reflect any change in the Company's expectations with regard to these forward-looking statements or the occurrence of unanticipated events. Factors that may impact the Company's success are more fully disclosed in the Company's most recent public filings with the U.S. Securities and Exchange Commission ("SEC"), including its annual report on Form 10-KSB/A (No. 2) for the year ended December 31, 2004 and its subsequent filings with the SEC.

SOURCE Calypte Biomedical Corporation

CONTACT: Company Contact: Theodore R. Gwin, Chief Financial Officer, +1-971-204-0282 or tgwin@calypte.com ; Investor Relations Contact: Tim Clemensen, Rubenstein Investor Relations, +1-212-843-9337 or tclemensen@rubensteinir.com
/Web site: www.calypte.com






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Position- Long; ST Rating- Strong Buy; LT Rating- Strong Buy

In the fourth quarter of 2005 we introduced a new version of the BED Incidence test using dried blood spots as an alternative to whole blood samples. While sales have leveled off, we have plans underway to market this product more actively worldwide. There were some issues related to the application of the test, but the CDC and we continue to believe the Incidence test is a valuable piece of technology and will remain a viable surveillance test. We expect that the process of redefining its application will continue as its use expands. The CDC continues to strongly support these products and we are preparing a direct marketing campaign to increase awareness of the products throughout the world. We also continued our research work on the blood based rapid HIV Incidence test for diagnostic and surveillance purposes under the terms of a cooperative arrangement with the CDC. We plan to file the appropriate application with the US FDA for diagnostic versions of the Incidence test. We will continue to expand our already strong relationship with the CDC, which may include development of other products in the future. For example a rapid syphilis test, which is the logical compliment to an HIV test; individuals with syphilis see their HIV symptoms accelerate more rapidly.

Financial Objectives:
We believe we are firmly on track to build the revenue streams necessary to support our operations and our financial objective - sustained profitability and increased shareholder value in the longer term.

Key Deliverables for 2006

New CEO:
Firstly, the search for a new CEO was initiated almost immediately following Dr. Richard George’s resignation. We have drawn extensively on the contacts of the board and on the contacts of senior management. We have arrived at a preferred candidate and we believe he has excellent qualifications and experience in business acumen necessary to lead Calypte; he also has considerable vision. He has also met the board and most members of the senior management team and we are now discussing terms. Should the candidate accept, and we can agree terms, we would expect to have him in place by early May 2006.

Future Sales:
Our future revenues will be derived primarily from the sales of our HIV Rapid diagnostic tests into the professional market and the OTC market and from potential sales of other diagnostic tests for other sexually transmittable diseases.

Manufacturing:
The focus for 2006 is on commercializing the HIV 1 and 2 Rapid tests currently produced in Thailand which we will use to source the African and Asian markets. The Chinese market will be supplied with product manufactured by our new Chinese Joint Venture. In all markets, commencement of sales is contingent upon the successful completion of clinical trials followed by the required regulatory approvals, coupled with successful technology transfer and the scale-up of our manufacturing operations. We do not expect significant revenues from the sale of our rapid tests in 2006 as we are still in the early stages of the regulatory processes with many of our initial target markets in Africa and Asia. Our people are currently traveling in Africa, they were just in Kenya where we recently received approval and we are now in South Africa where we are near completion of our clinical trials for our oral fluid rapid test as well as several other countries. Upon returning from Africa they are scheduled to travel to India where they will help with the launch of the clinical trials of our blood and oral fluid HIV tests.

Second Generation Tests:
We have continued our focus on the further development and commercialization of our second generation lateral platform design as licensed from Ani Biotech (this we refer to as our Aware® II Platform) and its application to rapid diagnostic tests, i.e. the HIV 1 and 2. And also the expansion of our product line to a broad set of tests for other sexually transmittable diseases and to the HIV rapid test market in the United States. As Ted indicated we are presently in the process of finding a manufacturing facility locally here in the Portland area to complete the development and launch of the clinical trial process in the US and elsewhere for the Aware® II product.

Intellectual Property:
Our strong intellectual and license portfolio provides us with worldwide freedom to operate. A major challenge for us in 2006 is to maximize the comparable advantage this portfolio provides us. The route is open for a strong entry to the US OTC market and indeed we expect to kick off an HIV 1 and 2 approval process by year end 2006.

Government Change:
This year we have noticed a significant change in the approach to HIV rapid testing in developing and emerging countries. In the US also, we are sensing an entirely different attitude, no longer do companies such as ourselves have to ask what we have to do to enter the market. Now, much more, we are asked what the concerned agencies have to do to get into the market. Dr. Richard George and Dr. Ron Mink, our Chief Scientific Officer recently attended a US FDA Blood Products Advisory Committee meeting when for the first time they were asked what the FDA has to do to get rapid tests into the US Over The Counter market. The FDA is now considering an OTC test in the US and oral fluid appears to be the first choice for such a test. While such a long process, one may expect in future to be able go into a drug store and buy an HIV Test. Hopefully it will be a Calypte HIV OTC Rapid Test.

Dr. George:
We continue to work with Dr. George in his capacity as our scientific advisor. He devotes much of his time to the science underpinning the development and testing of our new products and he continues to work closely with the CDC, where I’m sure most of you are aware he spent more than thirty years of his carrier, and with other government bodies in the US and around the world.

Ani Biotech:
Last week I traveled to Finland with Dr. George to meet our technology partner, Ani Biotech on firming up arrangements for further development of a new technology platform. Ani continues to be a great partner to work with and as I look forward to our long term strategies, I’m impressed with their capabilities and expect our relationship to grow with them.

China Manufacturing:
As Ted said earlier, we have acquired a Joint Venture and a manufacturing facility in China, and have applied for SFDA approval of our Aware® 1 product and expect to have initial comments back by mid year. This process in China is iterative much like it is in the US with the US FDA. We expect to complete this regulatory process by year end 2006. This includes obtaining GMP approval of our acquired plant following renovations, and the renovations I expect to be complete in mid April. I was fortunate to witness those myself several weeks ago on my own trip to visit the Chinese Joint Venture. This plant will produce product for the Chinese market and other markets. By the time it is ready we will have invested $5,000,000 and it will scale up over a twelve period to a capacity of some 10,000,000 million tests. (Transcriber comment: Later in the call Mr. Gale corrects this figure to 10 million tests per month) New laws in China will institute mandatory testing of Military recruits, High School and University students and eventually many more segments of the economy.

Aware® 1 OTC
We launched our Aware® OTC oral fluid product in the Middle East in January of this year and expect to launch this unique Over The Counter product in Eastern Europe in the next six months. This is the first OTC HIV test of its kind in the world.

USAID Waiver:
My objective and the objective of my colleagues is to have our products on the USAID Waver List by the years end. We’re in the process of compiling the requisite data in terms of manufactures claims and independent trials. Our China and pending Africa trials will provide us with the data adequate in quality and performance to allow us to file. We have the necessary data for the OMT product and expect to file that application shortly. The importance of the USAID approval for our Aware® products is that it will qualify our products for inclusion in the testing programs developing countries with donor funding. In the case of funding from the US products that are not approved locally by the FDA may be used provided they have the USAID Waver. This funding is typically USAID or PEPFAR, which is the Presidents $15 billion dollar grant to fight AIDS in 15 targeted countries where the level of disease is particularly high.

Long Term Strategy:
I would just like to touch on our long term strategy and just to make five highlight points. First in China our strategy is to develop a comprehensive marketing program. Our channels to market include government agencies, hospitals and other professional point of care settings, direct stales and retail outlets. Secondly, outside of China we will explore opportunities for new marketing channels including strategic partners. Thirdly, we will complete our US GMP manufacturing facility for the Aware® II product. Fourth, we will validate our Aware® II product for a line of other STD and Hepatitis products for use globally. Last and fifth, we will launch an Aware® II Over The Counter product in the United States as early as we possibly can.

Conclusion:
To conclude we will exploit three distinct business opportunities. First, is our Aware® HIV 1 and 2 current platform, particularly OMT which is a unique low-cost test targeted at China, Russia, India the Middle East and part of South East Asia. Second, we will capitalize on our ability to monetize our intellectual properties and expand into a full line of Aware® II sexually transmittable disease and Hepatitis products for the US market. And third, we leverage our ability of key relationships, the CDC in particular to expedite development and approval of new diagnostic tests.
Just to end on a bright clear note, we believe, that is the management of the Company; we believe that Calypte has reached a critical point in its history. Over the past two years the Company has restructured its operations and positioned itself for significant growth and profitability. The Company has completed the development of the Aware® product line and commercialized the BED Incidence Test, both of which have gaining traction in the market place. The Company has spun off its costly and loss making legacy EIA and Western Blot businesses and the Rockville manufacturing facility to boot. To end we believe firmly the stage is now set for Calypte to transition to profitability.