Clarient, Inc. & Health Discovery Corporation Jointly Announce Licensing Agreement

SAN JUAN CAPISTRANO, Calif. and SAVANNAH, Ga., Nov. 22 /PRNewswire-FirstCall/ -- Clarient, Inc. , a premier technology and services resource for pathologists, oncologists and the pharmaceutical industry, and Health Discovery Corporation , an emerging leader in the pattern recognition field, jointly announced today that they have entered into a licensing agreement in which Clarient will utilize HDC's Support Vector Machine (SVM) intellectual property (IP). Under the terms of the Agreement, Clarient will pay HDC an upfront licensing fee and future royalties for any Clarient product developed using the SVM technology. This agreement will capitalize on Clarient's position as a leader in rare event detection and allow for the development of applications to detect cancer cells in peripheral blood and bone marrow. Circulating cells testing is being investigated as a way to allow physicians the ability to understand a patient's propensity for cancer recurrence after surgery.

Ron Andrews, Clarient's President and CEO said: "Having access to this IP portfolio will allow Clarient to accelerate its development of companion diagnostics. The future of cancer management relies heavily on our ability to accurately assess and characterize cancer cells. This process will require the use of complex biomarkers to deliver on the promise of personalized medicine. When combined with our broad patent portfolio, the SVM technology can position Clarient as a leader in peripheral cell testing."

Stephen D. Barnhill, M.D., Chairman and CEO of Health Discovery Corporation, commented: "HDC is pleased to work with one of the leading cancer diagnostic companies in our industry, particularly in such an important area. This significant deal with our partners at Clarient stands as an endorsement of HDC's business model and the proven capabilities of our SVM technology. Clarient's heritage in cellular image analysis and rare cell detection combined with the power of our Support Vector Machine technology will enable our two companies to rapidly build on the ability to detect circulating tumor cells. In turn, detection of circulating tumor cells will have a dramatic effect on the management of various cancers. We believe that the resulting information will provide physicians with a greater understanding of patient prognosis after treatment."

Support Vector Machines are replacing neural networks in a variety of fields including engineering, information retrieval and bioinformatics. SVM's have received widespread notice for their ability to discover hidden relationships in complex datasets and have been exploited in numerous applications which include: image analysis, protein structure prediction, spectral analysis, medical diagnosis and prognosis, classification of microarray gene expression data, decryption, and many others.

"Our initial utility of these patents will be in the development of robust circulating tumor and endothelial cell applications," said Jose de la Torre- Bueno, Ph.D., Clarient's Chief Technology Officer, "but we believe Support Vector Machines offer a quicker path to market for other biomarkers currently in development. We have developed rare event applications which can eventually aid pharmaceutical companies for use in therapeutic clinical trials. The addition of Support Vector Machines can advance the utility of this program as we begin to market this cutting edge test to a broader base of biotechnology and pharmaceutical companies doing research in the field of cancer."

"Through our partnership with DAKO," Andrews continued, "we will work towards a fully-automated product to include cell enrichment, tissue staining and quantification via cellular image analysis. We believe Support Vector Machines will simplify our current technique and will speed up the development process, and we will report on the progress of this important project in future periods."

About Clarient Inc.

Clarient provides market leading technologies, services and expert support for the characterization, assessment and treatment of cancer, leading to more accurate diagnoses by pathologists, more confident treatment decisions by oncologists, a more efficient way to identify and develop pharmaceuticals and, ultimately, better outcomes for patients. A majority-owned subsidiary of Safeguard Scientifics, Inc., Clarient was formed in 1996 to develop and market the Automated Cellular Imaging System (ACIS). This digital imaging and assessment system allowed pathologists, for the first time, to obtain potentially more reliable, reproducible quantitative results for a broad range of slide-based diagnostic tests. In 2005, the ACIS and other leading diagnostic technologies such as flow cytometry and genetic testing were brought in-house to a state-of-the-art diagnostic laboratory and surrounded by a team of premiere cancer specialists, forming the Clarient Diagnostic Services business. This facility and the Clarient team support the efforts of pathologists and the biopharmaceutical industry as a central resource for cancer diagnostics, disease interpretation, remote pathology, and contract research operations.

Clarient's mission is to provide critical information to clinicians that will improve the quality and reduce the cost of patient care, and speed drug discovery. Many of the top clinical laboratories, hospitals, university medical centers and biopharmaceutical companies in the United States and Europe are currently using Clarient technology and services. Clarient and ACIS are registered trademarks of Clarient. For more information, visit www.clarientinc.com.

About Safeguard

Safeguard Scientifics, Inc. advances the value of revenue-stage information technology and life sciences companies. Safeguard provides growth capital as well as a range of strategic, operating and management resources to help its partner companies build value in their businesses. Safeguard participates in expansion financings, management buyouts, recapitalizations, industry consolidations and early-stage financings. For more information about Safeguard, visit www.safeguard.com.

About Health Discovery Corporation

Savannah-based Health Discovery Corporation is uniquely positioned in the field of pattern recognition. Through its broad patent portfolio and the efforts of its recognized scientific team, HDC is focused on commercializing its intellectual property in genomic and proteomic biomarker discovery, medical imaging, diagnostics, and pharmaceutical advancements in personalized medicine. The company's patent-protected technology also has significant application in non-medical fields that require manipulation and analysis of large, complex datasets such as insurance, financial markets, Internet search & spam, and homeland security.

The statements herein regarding Clarient, Inc. contain forward-looking statements that involve risks and uncertainty. Future events and the Company's actual results could differ materially from the results reflected in these forward-looking statements. Factors that might cause such a difference include, but are not limited to the Company's ability to obtain additional financing on acceptable terms or at all, the Company's ability to utilize support vector machine intellectual property to develop and enhance its cancer diagnostic product offerings, the performance and acceptance of the Company's system in the market place, the success of the Company's development and distribution arrangement with DAKO Cytomation, the Company's ability to expand and maintain a successful sales and marketing organization, continuation of favorable third party payer reimbursement for tests performed using the Company's system, unanticipated expenses or liabilities or other adverse events affecting cash flow, uncertainty of success in developing any new software applications, failure to obtain FDA clearance or approval for particular applications, the Company's ability to compete with other technologies and with emerging competitors in cell imaging and dependence on third parties for collaboration in developing new tests and in distributing the Company's systems and tests performed on the system, and risks detailed from time to time in the Company's SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Recent experience with respect to instrument placements, new contracts for placements, revenues and results of operations may not be indicative of future results for the reasons set forth above.

The company does not assume any obligation to update any forward-looking statements or other information contained in this document.

Clarient, Inc. Contact: Health Discovery Corporation Contact: Roberta L. Smigel Daniel R. Furth (949) 276.0110 (800) 965.3198 investorrelations@clarientinc.cominvestor@healthdiscoverycorp.com

Clarient, Inc.; Health Discovery Corporation

CONTACT: Roberta L. Smigel of Clarient, Inc., +1-949-276-0110,investorrelations@clarientinc.com; or Daniel R. Furth of Health DiscoveryCorporation, +1-800-965-3198, or investor@healthdiscoverycorp.com

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