Commenting on the financial results Renaat Van den Hooff, president and chief executive officer stated, The increase in operating expenses continues to be driven by costs associated with our sales and marketing efforts for Altrazeal(TM) and the regulatory and clinical development costs of Altrazeal(TM) Silver and Altrazeal( TM) Collagen. Our recent accomplishments related to the Altrazeal(TM) wound care portfolio include:

The first published article on Altrazeal(TM) in human use appeared in

International Wound Journal, a peer-reviewed publication

There were 3 oral presentations and 20 posters published during the

first four months of 2009 at several major Wound Care Conferences

(DFCon, APWCA, and SAWC).

We obtained a temporary reimbursement (HCPCS) code for Altrazeal(TM).

Van den Hooff continued, Despite the great clinical results we have experienced, we recognize that the selling cycle is taking longer than we originally expected. This has led us to refocus our sales strategy on specific sites of care. In parallel we have implemented cost improvement measures, including headcount reductions, in order to reduce our operating expenses moving forward. We are also continuing in our efforts to complete the acquisition of York Pharma plc. The strategic importance of creating a larger company with an established revenue base will enable ULURU to accelerate growth and position us to build shareholder value.

Operating Results

Research and development expenses for the Q1 2009 were $775,000, including $42,000 in share-based compensation, compared to $875,000, including $ 36,000 in share-based compensation, for the first quarter of 2008. The decrease of about $100,000 in research and development expenses was primarily due to lower development costs of $169,000 associated with our Altrazeal related wound care products and decreased costs of $10,000 associated with the clinical studies for Altrazeal and Altrazeal Silver. These decreases were partially offset by an increase in regulatory expenses of $88,000 associated with consultants engaged for our regulatory filings for Altrazeal related products.

Selling, general and administrative expenses for the Q1 2009 were $2.2 million, including $759,000 in share-based compensation, against $ 0.9 million, including $172,000 in share-based compensation, for the first quarter of 2008. The increase of about $1.3 million in selling, general and administrative expenses in 2009 was primarily due to costs associated with our sales and marketing efforts of about $600,000, distribution services of about $120,000, and a net increase of about $458,000 in compensation costs. The net increase in compensation cost includes about $519,000 of share-based compensation expense after giving effect to certain vesting accelerations of stock options and restricted stock which were partially offset by certain stock option forfeitures and by savings of $77, 000 relating to benefit forfeitures pursuant to the Separation Agreement with our former chief executive officer. Other factors affecting the cost increase were additional expenses of $82,000 for legal services associated with our patent filings and $70,000 for legal expense associated with SEC filings, employment matters, and trademark filings.

Interest and miscellaneous income for the Q1 2009 was $15,000 as against $125,000 for the first quarter of 2008. The decrease of about $110,000 is attributable to a decrease in interest income due to lower cash balances and interest yields in 2009.