Monogram Biosciences 8-K Monogram Announces Third Quarter 2006 Financial Results

Exhibit 99.1

Press Release	contacts:	Alfred G. Merriweather	Jeremiah Hall
		Chief Financial Officer	Feinstein Kean Healthcare
		Tel: 650 624 4576	Tel: 415 677 2700
		amerriweather@	jeremiah.hall@
		monogrambio.com	fkhealth.com

Monogram Announces Third Quarter 2006 Financial Results

Progress with Trofile™ Commercialization Planning and Oncology Assays

— Conference call today at 4:30 p.m. ET —

SOUTH SAN FRANCISCO, Calif., October 26, 2006 – Monogram Biosciences, Inc. (Nasdaq: MGRM) today reported financial results for the quarter ended September 30, 2006.

Third Quarter Results

The Company had revenue of $11.1 million for the third quarter of 2006, compared to revenue of $13.1 million for the third quarter of 2005. Revenue from the Company’s HIV testing products, was $10.4 million in the third quarter of 2006 compared to $12.1 million for the same period in 2005.

For the third quarter of 2006, a net loss of $6.6 million, or $0.05 per common share, was recorded, compared to a net loss of $9.6 million, or $0.08 per common share, for the same period in 2005. Included in these results were substantial non-cash items which are described below under “Proforma Results.” On a proforma basis, adjusted for these non-cash items, the net loss was $5.1 million, or $0.04 per share, in the third quarter of 2006 compared to a net loss of $2.8 million, or $0.02 per share, in the same period of 2005.

“As expected, revenue and operating results in the third quarter reflect the completion of Pfizer’s phase III trial ofmaraviroc,” said William Young, Monogram’s chief executive officer. “With enrolment in the trial now complete, testing levels have been reduced. This was a natural and expected transition and we are excited about the progress we are making with Pfizer in preparing for possible early access programs and commercial sales after FDA approval.”

1

Nine Months’ Results

The Company had revenue of $37.7 million for the first nine months of 2006, up from $35.5 million for the same period in 2005. Revenue from the Company’s HIV testing products grew 11 percent to $35.4 million in the first nine months of 2006 compared to $32.0 million for the same period in 2005.

For the nine months ended September 30, 2006, a net loss of $31.7 million, or $0.24 per common share, was recorded, compared to a net loss of $16.3 million, or $0.13 per common share, for the same period in 2005. On a proforma basis, adjusted for non-cash items, the net loss was $9.8 million, or $0.08 per share, in the nine months ended September 30, 2006 compared to a net loss of $9.5 million, or $0.08 per share, in the same period of 2005.

Cash Resources

The Company had $36.2 million in cash resources (comprising cash, cash equivalents, short-term investments and restricted cash) at September 30, 2006.

Recent Corporate Highlights

“We’ve made steady progress in both our HIV and oncology programs this quarter,” said Young. “As Pfizer’s first-in-class CCR5 antagonist,maraviroc, approaches the end of its phase III clinical evaluation, we are working with Pfizer to plan for worldwide availability of our Trofile assay, which measures HIV-1 co-receptor tropism, especially in the key HIV markets identified by Pfizer outside of the U.S. where the assay may be required to support sales ofmaraviroc.”

“In recent months, we have set out to implement enhancements made to our eTag assay and demonstrate its ability to predict response to Herceptin in the setting of metastatic breast cancer. We are very encouraged by correlations of eTag measurements and Herceptin treatment outcome in two unique cohorts of patient samples and are now seeking to confirm our observations in additional independent datasets,” continued Young.

Corporate:

• Closed a $10 million revolving credit line with Merrill Lynch Business Financial Services Inc.

• Ended the third quarter of 2006 with total cash and cash investments of $36.2 million.

HIV:

• Four studies presented at the XVI International AIDS Conference affirming the significance of Monogram’s Trofile™ HIV co-receptor tropism assay. Trofile’s negative predictive value was demonstrated in phase III study of Pfizer’smaraviroc and the assay’s positive predictive value was demonstrated in a phase II study of Schering Plough’svicriviroc.

• Continued planning under our multi-year collaboration agreement with Pfizer to provide worldwide availability of Monogram’s Trofile co-receptor tropism assay for patient use.

2

• Provided testing services in the Phase III clinical trial formaraviroc, Pfizer’s investigational CCR5-antagonist drug.

• Provided testing services in support of a first-in-class integrase inhibitor compound in a Phase III trial by Merck & Co.

• Provided testing services, including assays for co-receptor tropism and drug susceptibility, to Schering Plough to support the clinical development ofvicriviroc, Schering Plough’s investigational CCR5 receptor antagonist.

Oncology:

• Continued optimization and implementation of the eTag assay for routine operation, incorporating previously identified assay enhancements.

• Continued the analysis of activated signaling pathways in clinical cohorts in breast cancer to establish and confirm observed relationships between EGFR/Her family receptor interactions and clinical response and survival. Consistent patterns have been identified in two cohorts of breast cancer patients and we now intend to evaluate these correlations in additional independent cohorts of both early and late stage breast cancer patient samples.

Outlook

The following are the key objectives on which we are focused:

HIV:

• Continue to grow annual HIV testing revenues, driven by the use of our assays in support of our pharmaceutical company customers’ HIV drug development pipeline, including current and anticipated clinical trials of numerous entry inhibitors and integrase inhibitors.

• Continue planning, through our collaboration with Pfizer, for use of our Trofile co-receptor tropism assay with Pfizer’smaraviroc in early access programs and worldwide commercial use following regulatory approval.

Oncology:

• Validate the eTag EGFR/Her test panel in our CLIA certified clinical laboratory for clinical application to breast cancer, non-small-cell lung cancer and other EGFR pathway-driven tumors.

• Demonstrate the clinical utility of the eTag assay by developing predictive algorithms of patient response to targeted inhibitors of the EGFR/Her pathway in breast and lung cancers.

• Develop clinical data in support of the anticipated introduction of our first commercial eTag assay in oncology, a test panel measuring activated EGFR/Her family receptors related to approved targeted cancer therapies.

3

• Establish and extend research and clinical collaborations with pharmaceutical and biotechnology companies directed at the application of the eTag technology to drug discovery, development and clinical evaluation.

Following the financial statements below, Monogram has provided supplemental information to help investors and media gain further insights into its business.

Proforma Results

The Company is reporting non-GAAP proforma results which exclude certain items to provide a clearer view of ongoing expenses without the impact of merger-related costs and non-cash stock-based compensation. A reconciliation of these non-GAAP proforma results to GAAP results is included with the Statement of Operations data attached to this release.

There were several non-cash items that affected results for the periods ended September 30, 2006 and 2005 and were recorded as follows:

• Adjustments reflected in operating expenses for the following items of stock-based compensation: the net impact in 2005 of variable accounting on all former ACLARA stock options as a result of the contingent value rights, or CVRs; recognition of expense based on the value of CVRs related to former ACLARA stock options that vested during the period in 2005 and 2006; and charges in 2006 for stock-based compensation in accordance with SFAS 123R which was adopted by the Company effective January 1, 2006. These adjustments were $1.5 million (unfavorable) and $0.5 million (favorable) for the third quarter of 2006 and 2005, respectively.

• “Mark-to-market” adjustments to the liability established for the payment on the CVRs issued as part of the merger consideration for ACLARA are reflected as non-operating income and expense in the statement of operations for each period in 2005 and in the first two quarters of 2006. As the outstanding CVR’s were settled in the second quarter of 2006, adjustments are not relevant for the quarter ended September 30, 2006 or for future quarters.

Capital Structure and Contingent Value Rights

At September 30, 2006, a total of 130.8 million shares of common stock were outstanding. Stock options and warrants are outstanding on 19.2 million shares and 0.8 million shares of common stock, respectively. The principal amount of Pfizer’s $25 million convertible note is convertible into approximately 9.2 million shares of common stock.

4

Conference Call Details

Monogram will host a conference call today at 4:30 p.m. Eastern Time. To participate in the live teleconference please call (800) 817-4887, or (913) 981-4913 for international callers, fifteen minutes before the conference begins. Live audio of the call will be simultaneously broadcast over the Internet and will be available to members of the news media, investors and the general public. Access to live and archived audio of the conference call will be available by following the appropriate links atwww.monogrambio.com and clicking on the Investor Relations link. Following the live broadcast, a replay of the call will also be available at (888) 203-1112, or (719) 457-0820 for international callers. The replay passcode is 3470325.

The information provided on the teleconference is only accurate at the time of the conference call, and Monogram assumes no obligation to provide updated information except as required by law.

About Monogram

Monogram is advancing individualized medicine by discovering, developing and marketing innovative products to guide and improve treatment of serious infectious diseases and cancer. The Company’s products are designed to help doctors optimize treatment regimens for their patients that lead to better outcomes and reduced costs. The Company’s technology is also being used by numerous biopharmaceutical companies to develop new and improved antiviral therapeutics and vaccines as well as targeted cancer therapeutics. More information about the Company and its technology can be found on its web site atwww.monogrambio.com.

Forward Looking Statements

Certain statements in this press release and attached supplemental information are forward-looking. These forward-looking statements include references to the potential for an HIV drug that requires a molecular diagnostic for patient selection, plans for further development of the eTag technology and anticipated validation in a CLIA setting, expected protection provided by recently allowed patents, the ability of the Company to advance its opportunities in HIV and oncology, activities expected to occur in connection with the Pfizer collaboration, and the statements under “Outlook”. These forward-looking statements are subject to risks and uncertainties and other factors, which may cause actual results to differ materially from the anticipated results or other expectations expressed in such forward-looking statements. These risks and uncertainties include, but are not limited to: the risk that regulatory authorities may not require a molecular diagnostic for patient selection for an HIV drug, risks related to the implementation of the collaboration with Pfizer; risks related to our ability to recognize revenue from activities under the collaboration with Pfizer; risks and uncertainties relating to the performance of our products; the growth in revenues; the size, timing and success or failure of any clinical trials for CCR5 inhibitors, entry inhibitors or integrase inhibitors; the use of our Trofile co-receptor tropism assay for patient use in the event of approval of any CCR5 inhibitors; the ability of our eTag assays to predict response to particular therapeutic agents, our ability to successfully conduct clinical studies and the results obtained from those studies; whether larger confirmatory clinical studies will confirm the results of initial studies; our ability to establish reliable, high-volume operations at commercially reasonable costs; expected reliance on a few customers for the majority of our revenues; the annual renewal of certain customer agreements; actual market acceptance of our products and adoption of our technological approach and products by pharmaceutical and biotechnology companies; our estimate of the size of our markets; our estimates of the levels of demand for our products; the impact of competition; the timing and ultimate size of pharmaceutical company clinical trials; seasonal effects on revenue due to holiday periods which often affect the first and third quarters; whether payors will authorize reimbursement for our products and services; whether the FDA or any other agency will decide to

5

further regulate our products or services, whether the draft guidance on Multivariate Index Assays recently issued by FDA applies to our current or planned products ; whether we will encounter problems or delays in automating our processes; the ultimate validity and enforceability of our patent applications and patents; the possible infringement of the intellectual property of others; whether licenses to third party technology will be available; whether we are able to build brand loyalty and expand revenues; restrictions on the conduct of our business imposed by the Pfizer and Merrill Lynch debt agreements; and whether we will be able to raise sufficient capital in the future, if required. For a discussion of other factors that may cause actual events to differ from those projected, please refer to our most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as other subsequent filings with the Securities and Exchange Commission. We do not undertake, and specifically disclaim any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

PhenoSense, Trofile and eTag are trademarks of Monogram Biosciences, Inc.

~financials to follow~

6

MONOGRAM BIOSCIENCES, INC.

SELECTED STATEMENT OF OPERATIONS DATA

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2006			2005			2006			2005
Revenue:
Product revenue	$	10,415		$	12,136		$	35,418		$	31,994
Contract revenue		687			1,002			2,310			3,552
Total revenue		11,102			13,138			37,728			35,546
Operating costs and expenses:
Cost of product revenue		5,962			5,406			17,307			14,720
Research and development		4,638			4,776			14,421			13,724
Sales and marketing		3,819			3,095			11,264			8,916
General and administrative		3,377			2,808			11,240			7,665
Total operating costs and expenses		17,796			16,085			54,232			45,025
Operating loss		(6,694	)		(2,947	)		(16,504	)		(9,479	)
Interest and other income, net		90			585			1,233			1,689
CVR valuation adjustment		—			(7,249	)		(16,450	)		(8,493	)
Net Loss		(6,604	)		(9,611	)		(31,721	)		(16,283	)
Net loss per common share	$	(0.05	)	$	(0.08	)	$	(0.24	)	$	(0.13	)
Weighted-average shares used in computing net loss per common share		130,694			126,526			130,223			122,265
Reconciliation of Proforma Results to GAAP
Net loss	$	(6,604	)	$	(9,611	)	$	(31,721	)	$	(16,283	)
Adjustments for non cash items:
CVR valuation adjustment		—			7,249			16,450			8,493
Stock based compensation		1,505			(449	)		5,430			(1,695	)
Proforma net loss		(5,099	)		(2,811	)		(9,841	)		(9,485	)
Proforma net loss per common share	$	(0.04	)	$	(0.02	)	$	(0.08	)	$	(0.08	)

Management believes that this proforma financial data supplements our GAAP financial statements by providing investors with additional information which allows them to have a clearer picture of the Company’s operations, financial performance and the comparability of the Company’s operating results from period to period as they exclude the effects of costs related to the Company’s merger with ACLARA that management believes are not indicative of the Company’s ongoing operations and the impact of stock-based compensation. The presentation of this additional information is not meant to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Above, management has provided a reconciliation of the proforma financial information with the comparable financial information reported in accordance with GAAP.

7

MONOGRAM BIOSCIENCES, INC.

SELECTED BALANCE SHEET DATA

(In thousands)

(Unaudited)

	September 30, 2006			December 31, 2005
				(Note 1)
ASSETS
Current assets:
Cash and cash equivalents	$	8,030		$	7,616
Short-term investments		28,115			57,398
Restricted cash		50			50
Accounts receivable, net		7,225			9,063
Prepaid expenses		1,527			1,107
Inventory		1,245			1,170
Other current assets		486			790
Total current assets		46,678			77,194
Property and equipment, net		7,956			8,580
Goodwill		9,927			9,927
Deferred costs		953			—
Other assets		2,032			1,977
Total assets	$	67,546		$	97,678
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,827		$	1,751
Accrued compensation		2,112			2,271
Accrued liabilities		5,473			4,116
Current portion of restructuring costs		1,609			1,417
Deferred revenue		637			383
Current portion of loans payable and capital lease obligations		5,824			596
Contingent value rights		2,769			42,676
Total current liabilities		21,251			53,210
Long-term convertible promissory note		25,000			—
Long-term portion of restructuring costs		990			1,916
Long-term deferred revenue		953			—
Other long-term liabilities		607			781
Total liabilities		48,801			55,907
Stockholders’ equity:
Common stock		131			128
Additional paid-in capital		275,839			267,526
Accumulated other comprehensive loss		(216	)		(514	)
Deferred compensation		—			(81	)
Accumulated deficit		(257,009	)		(225,288	)
Total stockholders’ equity		18,745			41,771
Total liabilities and stockholders’ equity	$	67,546		$	97,678

(1) The balance sheet data at December 31, 2005 is derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission.

8

MONOGRAM BIOSCIENCES, INC.

SUPPLEMENTAL INFORMATION

To provide additional insights to investors, the following information is provided in a question and answer format.

HIV

1. What is the nature of the collaboration agreement with Pfizer?

The collaboration agreement announced in May 2006 provides a framework in which Pfizer and Monogram will collaborate to make Monogram’s Trofile co-receptor tropism assay available globally. Trofile has been used for patient selection in Pfizer’s phase III trial ofmaraviroc, its CCR5 antagonist drug for treatment of HIV. Having been used for patient selection in the clinical trials, it is possible that the test will also be required in clinical use after drug approval. This collaboration puts in place arrangements that are designed to make sure that the test can be available in countries outside of the U.S. where Pfizer, after regulatory approval, wishes to commercializemaraviroc.

The agreement runs through December 31, 2009, but is renewable by Pfizer for five separate one year terms after that date. Monogram will be responsible for making the Trofile assay available in the U.S. Outside the U.S., Pfizer will take the lead in commercializing the assay. The agreement is subject to certain performance standards by Monogram and a Joint Steering Committee oversees the collaboration.

Also in May 2006, we extended the existing co-receptor tropism assay services agreement with Pfizer to provide support for potential additional Pfizer clinical programs through December 31, 2009.

2. What are the economic aspects of the agreements with Pfizer?

There are two separate aspects to the arrangements with Pfizer. The first is a $25 million financing and this is described in the Financial section of this Q&A. The second is a collaboration that is designed to make Monogram’s Trofile co-receptor tropism assay available globally.

With regard to the U.S. market, we intend to make our tests available through the same direct channels that we have used successfully in the past. While we may work collaboratively with Pfizer’s commercial organization after approval ofmaraviroc, we will have full control over our U.S. marketing activities. We will independently set our commercial price for the Trofile assay and obtain reimbursement for the assay. Outside of the U.S. Pfizer will lead the commercial effort and so will be responsible for, and incur the costs of, sales, marketing, reimbursement and regulatory matters. We will be responsible for logistics and medical education in those countries where Pfizer elects to marketmaraviroc. However, Pfizer will reimburse us for all of our costs incurred in these activities. These costs are potentially substantial, but, due to Pfizer’s funding, will not place a burden on our cash flows. Pfizer will also buy tests from Monogram.

For details of how revenue and expenses will be recognized for this collaboration, refer to the Financial section of this Q&A.

3. What is the status of the CCR5 class of HIV drugs and what has been the impact of the CCR5 clinical trials on your business?

The initiation of phase III trials for the first in the new class of CCR5 antagonist drugs in late 2004 was the primary factor in the 31% increase in our total revenue in 2005, compared to 2004. This strong revenue contribution continued in the first and second quarters of 2006. The most advanced CCR5 compound in clinical development is Pfizer’smaraviroc, for which a phase III trial has been ongoing throughout 2005 and is continuing in 2006. Enrolment is completed and Pfizer has indicated a goal of submitting an NDA formaraviroc to the FDA by the end of 2006. However we cannot be assured that this will in fact occur. With the completion of enrolment in Pfizer’s trial, testing volumes have been reduced in the third quarter of 2006.

A second planned phase III trial, by GlaxoSmithKline (GSK), was cancelled in October 2005 as a result of unfavorable phase II results. While the immediate testing opportunity presented by that particular trial is no longer present, we continue to work with GSK under a services agreement in support of its continuing HIV programs. A third program, by Schering Plough, is ongoing although it is not clear when, or if, a phase III trial may be initiated. We continue to provide testing services to Schering in support of the ongoing clinical development ofvicriviroc, their investigational CCR5 antagonist.

9

Our testing services are used in clinical programs of CCR5 entry inhibitor drugs, for patient selection and monitoring utilizing our Trofile co-receptor tropism assay, and for optimization of patients’ background treatment regimens utilizing our PhenoSense GT test.

The CCR5 antagonist class of drugs has been a significant element of our revenue in recent quarters. However, we have a total of over 60 pharmaceutical, biotechnology and research organizations for which pharmaceutical testing has been routinely conducted. In addition, other types of entry inhibitors, as well as a new class of integrase inhibitors, are progressing though the drug development pipeline and may provide additional opportunities for our pharmaceutical testing services.

4. What will be the future impact of new HIV drug classes on your business?

The most immediate opportunity is represented by the CCR5 antagonist class. This class of drug blocks the use by HIV of the patient’s CCR5 co-receptor, if this co-receptor is being used for entry by HIV into cells. Accordingly, knowing whether the CCR5 co-receptor is being used by HIV in a particular patient is critical for drug efficacy, and potentially for drug safety. The relevance of our tests will be determined in large part by how these drugs progress through their clinical trials and through FDA review and approval, although in the current Phase III trials our Trofile co-receptor tropism assay is being used for patient selection and our PhenoSense GT assay is being used for optimization of background therapies prior to initiation of treatment with the investigational CCR5 inhibitor compound. There is always the risk that the drugs will not be successful in their trials, that trials will not be completed, that the drugs will not be approved by the FDA, or that if the drug is approved, our tests will not be deemed necessary. If the drugs are successful, however, then it is possible that our tests will be used in conjunction with the drugs in clinical use after FDA approval. This could provide a meaningful increment to our HIV business over the long term.

But this is not the only area of current drug development for HIV. There are other types of entry inhibitors, including Fuzeon® from Roche (the only currently approved drug in its class), as well as many others in earlier stages of development. For these drugs, we have our PhenoSense GT test that can be used for optimization of background therapy, and our PhenoSense Entry assay that can be used to assess resistance to this class of drugs, both in clinical trials and in commercial use.

Also there is an exciting new HIV drug class, integrase inhibitors, the first of which has recently entered Phase III trials. For this class of drugs we can also provide our PhenoSense GT test for optimization of background therapy in clinical trials, and our PhenoSense Integrase assays that can be used to assess resistance to this new class of drugs, both in clinical trials and in commercial use.

New classes of drugs add both to the richness of potential treatment options for patients and also to the potential testing opportunity for Monogram. For us, this means opportunity not only for our current genotypic and phenotypic tests but also for our new class-specific tests that are made available initially to pharmaceutical companies and over time, as these new drugs are approved, to physicians.

5. What is the status of your agreement with Merck for its phase III trial?

In February 2006, we announced that our tests are being used in a phase III trial of an integrase inhibitor by Merck & Co. This is the first phase III trial for a drug in this new class. We believe the initiation of this trial is indicative of a robust drug development pipeline, both in terms of new drugs being developed and new classes of drug being pursued by our pharmaceutical company customers. The selection by Merck of our tests for use in this trial is consistent with the leadership position that we have established as the partner for over 60 pharmaceutical, biotechnology and research organizations, including almost every company with a significant HIV drug development program. There are over 60 drugs in development, more than half of which are in the new classes of entry inhibitors, integrase inhibitors and assembly inhibitors.

6. What is the proprietary nature of your tests for tropism and HIV entry?

Our tropism and entry tests are covered by our fundamental patents for phenotypic analysis. In addition, in May 2006 we received four notices of allowance from the U.S. Patent Office related to the use of Monogram’s PhenoSense™ technology for assessing the likely efficacy of entry inhibitors, a new class of drug that prevents HIV from entering cells. Monogram’s tests measure co-receptor tropism and the susceptibility or resistance of HIV to entry inhibitors, critical elements in the development and use of these new drugs. The phenotypic approach covered by these allowed patents is able to directly and accurately assess the susceptibility or resistance of a patient’s HIV to entry inhibitors, and to determine to what extent a patient’s virus is able to gain entry into cells via one or other, or a mixture, of the two major co-receptors, CCR5 or CXCR4, that are used in conjunction with the virus’ primary receptor, CD4. The allowed patents cover an approach that is able to directly assess resistance to entry inhibitors, the identification of co-receptor usage, screening for new entry inhibitor compounds and an antibody response capable of blocking infection. Monogram’s assays utilizing these methods include the PhenoSense Entry Assay that assesses resistance of HIV to all classes of entry inhibitor drugs and the Co-Receptor Tropism Assay

10

that identifies the ability of a patient’s HIV to enter cells using specific co-receptors such as CCR5. We believe these patents are important because the envelope region of the virus (the area involved in cell entry) has a particularly heterogeneous genetic sequence. This renders genotypic methods significantly less effective for measuring co-receptor tropism and resistance to specific viral entry inhibitors, giving Monogram’s phenotypic methods significant advantages.

7. Is there published data available related to your Trofile co-receptor tropism assay?

Four studies demonstrating the utility and clinical significance of our Trofile™ co-receptor tropism assay were presented in August 2006 at the XVI International AIDS Conference in Toronto.

The first study, presented by Monogram scientists, confirmed that the Trofile assay can accurately characterize the tropism of a panel of diverse HIV strains. Our scientists used the assay to evaluate the co-receptor tropism of a panel of 46 well-characterized strains of HIV-1 that included multiple subtypes (CCR5, CXCR4, or dual/mixed tropism (DM)). The assay accurately measured the tropism of all 46 strains. The assay also was accurate when tested against three clonal viruses (CCR5, CXCR4 and DM). When CCR5 and CXCR4 clones were mixed together, the assay was able to detect minor variants down to 10 percent in all samples tested, and to 5 percent in 83 percent of samples tested. The data show that Monogram’s Trofile assay is an accurate, precise, sensitive, reproducible and robust assay for the measurement of tropism and support its use as the standard assay for patient screening and monitoring in the development of co-receptor antagonists.

The second study, also presented by Monogram scientists, compared the abilities of V3 sequencing and Monogram’s Trofile assay to accurately characterize tropism. V3 sequencing examines the genetic sequence of only the V3 region of the envelope gene of HIV taken from a patient and uses algorithms to predict co-receptor tropism. The Trofile assay uses theentire envelope gene taken from the patient’s virus to measure viral tropism directly. The study used patient-derived virus sequences representing multiple subtypes of HIV-1, and found that sensitivity for detection of viruses using the CXCR4 co-receptor varied widely depending on viral sub-type and on the interpretation system used. In comparison to phenotypic analysis with Trofile, which accurately and directly measures co-receptor usage, genotypic measures, on average, were only approximately 65% accurate, and in many cases were even less accurate. These results demonstrate that genotypic approaches are inferior for assessing tropism when compared with Trofile. This is because the region of the virus involved in cellular entry has a particularly heterogeneous genetic sequence, which renders genotypic methods significantly less effective.

In a study presented by scientists from Pfizer, Inc., the negative predictive value of Monogram’s Trofile co-receptor tropism assay was assessed in an ongoing Phase III trial of Pfizer’s investigational CCR5 antagonist,maraviroc (Study 1029). Results showed that patients identified by the assay as having virus using BOTH the CXCR4 and CCR5 receptors (dual/mixed tropic) did not respond to the investigational (CCR5) therapy. These data suggest that screening patients with the Trofile assay will allow physicians to avoid treating patients with expensive drug therapy who are unlikely to respond to that therapy.

In a study presented by investigators from the AIDS Clinical Trial Group 5211 study team and Schering Plough demonstrated the positive predictive value of the assay in patients participating in a Phase IIb trial of Schering-Plough’s investigational CCR5 antagonistvicriviroc. In this study, patients identified by the assay as having virus utilizing only the CCR5 co-receptor demonstrated clinical responses to the investigational therapy.

These two studies involving Pfizer’smaraviroc and Schering Plough’svicriviroc, suggest that the Trofile co-receptor tropism assay is an effective method of identifying appropriate patients for treatment with CCR5 antagonists. By virtue of its high positive and negative predictive values, the Trofile assay is highly capable of insuring that individuals receive treatments that are most likely to provide them with clinical benefit.

8. What will be the impact of possible FDA regulation?

The FDA has recently issued draft guidance related to the regulation of certain kinds of test provided through CLIA labs. This draft guidance is currently subject to public comment and may be revised before being finalized. We do not believe that the guidance is intended to regulate all CLIA-based lab tests. Rather it appears to be focused on a subset of tests referred to as IVD Multivariate Index Assays where multiple variables are analyzed, using complex statistical proprietary algorithms and the reported results may not be understood by physicians.

With regard to our HIV business, we do not currently believe that our products will be affected by this draft guidance for the following reasons:

• First, our phenotypic resistance tests and our co-receptor tropism test are all direct biological measurements and are not the kind of “black box” algorithms on which the draft guidance appears to be focused

11

• Second, the FDA is familiar with genotypic HIV tests and, to our knowledge, has made no indication that it intends the draft guidance to be applied to these tests. In addition, gene mutations in HIV have been widely published in medical literature and are well understood by physicians such that they do not seem to fit the “black box” algorithm characterization

• Third, with respect to our Trofile Assay, because of the role of our Trofile Assay in the phase II and phase III clinical evaluation of CCR5 antagonists, we have had direct interactions with the FDA and in 2004 filed a Master File on our Trofile co-receptor tropism assay with the FDA which provided the agency substantial performance characteristics and validation data on the Trofile Assay,

With regard to our potential eTag products for oncology, we will watch the evolution of the regulatory situation and will be actively engaging in the process both through direct interaction with the FDA and through trade groups. Our eTag assays are currently designed to make direct biological measurements of proteins and protein dimers and facilitate predictions based on a clear biological rationale. As such, they may be viewed as different from the “black box” algorithm based tests that the draft guidance is intended to reach, though at this time we cannot make this determination.

However, in the evolving area of molecular diagnostics, it is not clear when or what delineations will be made in determining applicability of the draft guidance once finalized and we are currently unable to predict the applicability of such final guidelines or whether any additional regulations will be proposed which might impact our current or future products.

Oncology

9. What is eTag technology? How will eTag assays be used?

Our eTag assays enable detailed analysis of activated protein drug targets and signaling pathways in cancer cells, including FFPE samples, which is the standard format in most pathology labs. The unique capability of eTag assays is the ability to directly measure, quantitatively and precisely, activated pathway status by measuring protein complexes, not just indirect measures such as gene mutations and gene expression levels. The assays are designed to provide information on a drug’s mechanism of action, selectivity and potency in a biological setting in pre-clinical research, and enable enrichment or selection of clinical trial populations later in a drug’s development. In addition, we believe these assays may ultimately be used to help physicians better determine whether certain therapies are more appropriate for individual cancer patients, and whether to combine therapies with different mechanisms or properties for such patients.

10. What will your first commercial oncology product be?

We are focused on an eTag assay panel to predict responsiveness of individual patients to drugs that target the EGFR/Her pathway. Currently approved drugs of this type are Herceptin, Tarceva, Iressa, Erbitux and Vectibix. While the details of our first test panel are still being determined, we have completed some initial market research that has validated our existing priorities of breast cancer and lung cancer as the two markets in which there could be a near term commercial opportunity for an eTag-based test. In breast cancer, there may be two opportunities based on evolving treatment settings for Herceptin. One is the opportunity for a better test to support the use of Herceptin in late stage treatment regimens for advanced disease. A second and potentially larger opportunity may be for an improved test (in relation to existing tests) to support the potential for use of Herceptin in patients with early stage disease. In lung cancer, current approaches to the selection of patients who are likely to respond to targeted therapies are even more uncertain, and we believe that the accurate assessment of activated drug targets in individual patients using the eTag assay has the potential to address this need. The details and timing of our initial products are still dependent on the nature and timing of clinical data that is being generated in our clinical studies.

11. What is the status of your clinical studies for the eTag EGFR/Her test panel?

We are engaged in many clinical collaborations with investigators in academia who are experts in their respective fields. The goals of these collaborations include the elucidation of receptor tyrosine kinase (RTK) expression and dimerization patterns across the disease landscape using the eTag assay to precisely quantify and characterize signal pathway activation in individual tumors, and to identify the correlates of response to targeted therapies of the EGFR/Her pathways. These are accomplished by making measurements of RTK expression and dimerization in formalin-fixed, paraffin-embedded specimens and correlating those measurements with measures of objective response and survival in cohorts of patients that were treated with a specific EGFR/Her inhibitor. Once established, those correlations must be confirmed and validated using independent cohorts where predictive algorithms based on initial findings can be verified, improved, and refined.

These studies are focused on several solid tumors, all of which share the characteristic that they depend upon dysregulation of the EGFR/Her pathways for their continued proliferation and survival. Based on what is already known about the pathogenesis of these tumors and the mechanisms of action of the drugs that are used to inhibit them, we

12

expect that the unique ability of the eTag assay to identify and quantitate protein dimers will allow us to discriminate among patients who are more or less likely to respond to specific EGFR/Her-pathway inhibitors, whether they be monoclonal antibodies or small molecule tyrosine kinase inhibitors. To date, we have generated some very promising results in both breast and lung cancer studies, and we are in the process of confirming and extending those initial findings. We intend to publish and present the results of our analyses, in collaboration with our academic colleagues, once we have completed the necessary studies demonstrating the clinical utility of the eTag approach.

More specifically, we have identified consistent patterns of protein and protein dimer formation that correlate with clinical response in two cohorts of breast cancer patient samples. We are proceeding to evaluate these patterns in additional cohorts of both early and late stage breast cancer patient samples.

Financial

12. What has been your use of cash?

During 2005, the overall reduction in our cash resources (comprising cash, cash equivalents and investments) was approximately $14 million. During the first quarter of 2006, there was an overall increase in cash resources of $2.4 million, resulting from $3.0 million in cash proceeds from the exercise of stock options. Cash provided by operations in the first quarter was approximately $0.3 million, favorably affected by improvement in accounts receivable collections. During the second quarter of 2006, the change in cash was affected by the CVR payment of $57.1 million, offset by proceeds from Pfizer’s investment of $25 million. Excluding these items, there was a net reduction in cash and cash investments in the second quarter of $0.6 million. During the third quarter of 2006, cash used by operations was $4.6 million, higher than the first part of the year due primarily to the lower level of revenue and the related accounts receivable collections. Also in the third quarter, we had approximately $5 million in borrowings under our revolving credit line and $0.6 million in other short-term borrowings. The following table shows these amounts by quarter:

	2005												2006
$ millions	Q1			Q2			Q3			Q4			Q1			Q2			Q3
Cash provided by (used in) operations (1)	$	(2.6	)	$	(1.8	)	$	(4.4	)	$	(4.9	)	$	0.3		$	0.2		$	(4.6	)
Cash used in CVR settlement		—			—			—			—			—			(57.1	)		—
Cash used in merger transaction costs		(4.7	)		—			—			—			—			—			—
Cash used in investing activities (2)		(1.5	)		(1.2	)		(0.6	)		(0.3	)		(0.6	)		(0.8	)		—
Cash provided by financing activities		4.5			2.1			0.8			0.5			2.7			25.4			5.6
	$	(4.3	)	$	(0.9	)	$	(4.2	)	$	(4.7	)	$	2.4		$	(32.3	)	$	1.0

(1) Cash used in operations excludes the payment on the CVR liability.

(2) Cash used in investing activities excludes purchase and maturities/sales of investments.

13. What is your current cash position?

At September 30, 2006 we had cash resources (comprising cash, cash equivalents, short-term investments and restricted cash) of approximately $36.2 million.

14. What are the details of your investment from Pfizer?

In May 2006, Pfizer invested $25 million in Monogram through a 3% Senior Secured Convertible Note. This note is:

• payable four years from issuance, in May 2010,

• bears interest at 3%, payable quarterly in cash or common stock at our option,

• convertible at any time at Pfizer’s option at a conversion price of $2.7048 per share,

• automatically converted at any time if the closing price of our common stock is $4.06 or greater for 20 out of 30 consecutive trading days,

• covered with regard to the resale of the shares of common stock issuable on conversion and in payment of interest by a Form S3 registration statement that has been declared effective by the SEC,

• secured by the assets of our HIV testing business,

• documented in financing agreements that have been filed as exhibits to our SEC filings.

15. How will revenue and expenses be recognized in relation to your collaboration with Pfizer?

The collaboration involves a number of elements, including supply of the Trofile assay in additional clinical studies, supply of the Trofile assay for clinical use outside of the U.S., reimbursement of costs for the establishment and operation of supply infrastructure outside of the U.S. and potential assistance to Pfizer in the establishment and operation of a second facility for processing of tropism assays. Under applicable accounting rules, each of these

13

deliverables has to be separately analyzed to establish an appropriate fair value. Absence of an established fair value for any undelivered elements requires a deferral of all other revenue in the arrangements. The application of these accounting rules requires us to defer all the revenue until the expiry or termination of the contract, or earlier completion of the deliverable, due to the absence of an established fair value for the potential assistance to Pfizer in the establishment and operation of a second facility for processing of tropism assays. Costs associated with the revenues are also being deferred. The deferrals are included in the balance sheet as long term deferred revenue of $0.9 million and deferred costs of $0.9 million.

Additional details will be included in our SEC filings on Form 10Q and 10K.

16. What are the details of the Line of Credit with Merrill Lynch?

In September 2006, we entered into a Credit and Security Agreement with Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc. This revolving credit line provides the Company with a $10 million line of credit, with borrowings limited by the amount of eligible accounts receivable, currently approximately $5 million. The line is secured by our accounts receivable, inventory and intellectual property related to our oncology testing business and is subject to certain covenants related to the conduct of our business. The Agreement expires in March 2010. As of September 30, 2006, approximately $5 million was outstanding under the revolving credit line. Amounts borrowed under the Agreement will bear interest at a rate per annum equal to a published LIBOR rate plus 4.75%.

17. What was the impact of the CVR liability and how will there be any future impact?

The final determination of the amount of the actual liability under the CVRs was made in June 2006 based on the volume weighted average prices of our common stock during the fifteen trading days ending on Friday June 9, 2006. Because this average price was less than $2.02 per share, the maximum payment of $0.88 per CVR, or $57.1 million in the aggregate, became payable in respect of all outstanding CVRs. Although $24.6 million of this amount could have been paid in shares of our common stock, we elected to make the entire payment in cash. There are no CVRs outstanding at September 30, 2006. Additional information on the CVRs is included in our SEC filings.

Additional amounts will become due upon the future exercises of assumed ACLARA stock options. There are approximately 3.3 million shares of Monogram common stock issuable upon exercise of assumed ACLARA stock options outstanding at September 30, 2006, each of which is entitled to a payment of $0.88 per share, but ONLY upon exercise of the option. In the aggregate the proceeds receivable by the Company upon such exercises is $7.1 million and the liability for CVR payments is $2.9 million. Cash received by the Company would therefore exceed the CVR liability by approximately $4.2 million. We recognize the liability for this CVR payment as the options vest and of the total potential liability of $2.9 million, $2.7 million is reflected as a liability at September 30, 2006 and the remaining $0.2 million will be recognized as the options vest, generally over the next two years. These payments will ONLY be made at the time of receipt by the Company of the related option exercise proceeds.

18. What are the trends in your net losses?

Our net income/(loss) includes adjustments from marking to market the valuation of the CVR liability for quarters prior to the June 2006 CVR maturity date, as well as non-cash charges for stock-based compensation included in operating expenses and described in the immediately following question. The effect of these items generates significant fluctuations from quarter to quarter in net income/(loss). The table below shows the net income/(loss) both in accordance with GAAP and on a proforma basis, adjusted for these non-cash items.

$ millions
	2005												2006
	Q1			Q2			Q3			Q4			Q1			Q2			Q3
GAAP Net Income (Loss)	$	(7.4	)	$	0.7		$	(9.6	)	$	(21.3	)	$	(3.3	)	$	(21.8	)	$	(6.6	)
Contingent Valuation Rights Adjustment Included in Non-operating Income/Expense (1)		5.3			(4.0	)		7.3			17.8			—			16.5			—
Contingent Valuation Rights Adjustment Included in Operating Income/Expense (2)		0.1			—			0.1			0.8			0.1			0.5			0.1
Stock-Based Compensation under APB 25		(2.1	)		0.7			(0.6	)		(0.9	)		—			—			—
Stock-Based Compensation under SFAS 123R		—			—			—			—			1.8			1.5			1.4
Other (3)		—			—			—			—			—			—			—
Proforma Net Loss	$	(4.1	)	$	(2.6	)	$	(2.8	)	$	(3.6	)	$	(1.4	)	$	(3.3	)	$	(5.1	)

(1) Reflects the mark-to-market adjustments in respect of CVRs outstanding and in respect of CVRs associated with vested ACLARA options as of the closing of the merger with ACLARA on December 10, 2004.

(2) Reflects stock-based compensation related to the CVRs vested during each period and the subsequent mark-to-market of those CVRs.

(3) Reflects stock-based compensation related to consultant options that vested during each period.

14

19. What are the trends in your operating expenses without the impact of the non-cash items?

Our operating expenses include non-cash amounts related to stock compensation. These non-cash amounts are (i) in 2005, the impact of variable accounting on all former ACLARA stock options as a result of the CVRs, (ii) in 2005 and 2006, recognition of expense based on the value of CVRs related to former ACLARA options that vested during the period, and (iii) in 2006, the impact of stock-based compensation in accordance with SFAS 123(R) which was adopted by us on January 1, 2006.

The table below shows for each operating expense category the amount that represents stock compensation and the balance that represents “proforma expenses.” Proforma expenses are all those expenses other than the non-cash stock compensation amounts described above. Certain amounts in Q1’05 and Q2’05 have been reclassified from research and development to cost of goods sold.

$millions

GAAP Expenses

	2005							2006
	Q1		Q2	Q3		Q4		Q1	Q2	Q3
Cost of Product Revenue	4.4		5.0	5.4		5.3		5.7	5.7	6.0
Research and Development	4.0		4.9	4.8		5.3		4.5	5.2	4.6
Sales and Marketing	2.5		3.3	3.1		3.7		3.4	4.0	3.8
General and Administrative	1.7		3.2	2.8		2.4		3.6	4.3	3.4
	12.6		16.4	16.1		16.7		17.2	19.2	17.8
Stock Based Compensation (1)
	2005							2006
	Q1		Q2	Q3		Q4		Q1	Q2	Q3
Cost of Product Revenue	—		—	—		—		0.2	0.1	0.2
Research and Development	(0.6	)	0.3	(0.2	)	0.3		0.5	0.8	0.3
Sales and Marketing	(0.2	)	0.1	(0.1	)	—		0.4	0.5	0.4
General and Administrative	(1.2	)	0.3	(0.2	)	(0.4	)	0.8	0.6	0.6
	(2.0	)	0.7	(0.5	)	(0.1	)	1.9	2.0	1.5
Proforma Expenses
	2005							2006
	Q1		Q2	Q3		Q4		Q1	Q2	Q3
Cost of Product Revenue	4.4		5.0	5.4		5.3		5.5	5.6	5.8
Research and Development	4.6		4.6	5.0		5.0		4.0	4.4	4.3
Sales and Marketing	2.7		3.2	3.2		3.7		3.0	3.5	3.4
General and Administrative	2.9		2.9	3.0		2.8		2.8	3.7	2.8
	14.6		15.7	16.6		16.8		15.3	17.2	16.3

(1) Reflects stock-based compensation under APB25 in 2005 and under SFAS123(R) in 2006. Additionally, it includes stock-based compensation related to CVRs vested during each period, the subsequent mark-to-market of those CVRs and stock-based compensation related to consultant options that vested during each period.

15