Avitar, Inc. Reports Fiscal 2000 Results

Sales Increased By 63 Percent From Previous Year

January 17, 2001

CANTON, MA, January 16, 2001 – Avitar, Inc. (AMEX: AVR) has reported financial results for its fiscal year ended September 30, 2000.

Revenues for 2000 increased by approximately 63 percent to $4,079,000 compared to $2,495,000 for the fiscal year ended September 1999. Sales of ORALscreen™, its drugs-of-abuse product line, and the Hydrasorb™ wound dressing product line were responsible for the improvement.

Net loss for the fiscal year ended September 30, 2000 was $6,361,000 or $0.26 per share. In the previous fiscal year, the net loss from continuing operations was $3,118,000 or $0.24 per share. The results for fiscal 2000 reflect the impact of accelerated sales, marketing and development efforts to support the company's ORALscreen™ product lines and drug testing services.

"Our ORALscreen rapid point-of-contact screening test for drugs-of-abuse continues to gain acceptance in the marketplace. With our direct sales force now in place, we are in a position to penetrate the $1.5 Billion worldwide drugs-of-abuse market both directly as well as through strategic partnerships," said Peter P. Phildius, Avitar's Chairman and Chief Executive Officer.

"We are optimistic that ORALscreen will provide accelerated growth to Avitar as our marketing and sales efforts are implemented," Phildius added.

Avitar, Inc. (AMEX: AVR) headquartered in Canton, Massachusetts, develops, manufactures and markets innovative medical devices based on core technologies in oral fluid diagnostics and customized polyurethane applications. The company markets a unique portfolio of substance abuse testing products and services that include ORALscreenTM, the world’s first rapid point-of-collection oral fluid test for drugs of abuse, ORALadvantage™, the first comprehensive substance abuse program featuring its oral fluid-based products, HAIRscreenTM, a laboratory-based test for detecting long term drug abuse using hair, and several other specialized tests for drugs of abuse. ORALscreen is a cost-effective drugs-of-abuse test with potential net cost savings of more than $100.00 per sample tested. Additional products include an oral fluid collection system for DNA testing as well as a proprietary line of polyurethane-based high tech medical devices.

This release contains forward looking statements that are subject to risks and uncertainties including the development and marketing of new applications and other risks that are detailed from time to time in the Company’s filings with the Securities and Exchange Commission.