BIOSITE® INCORPORATED ANNOUNCES RESULTS FOR

THE THIRD QUARTER OF 2006

Company Enters Into $100 Million Accelerated Stock Repurchase Agreement

SAN DIEGO — Biositeâ Incorporated (Nasdaq:BSTE) today reported financial results for the third quarter of 2006 and discussed preliminary guidance for the fourth quarter of 2006 and preliminary revenue guidance for 2007. The Company also provided an overview of several potential new products for which clinical trials are planned in 2007. In addition, Biosite has entered into an accelerated stock repurchase agreement to buy back $100 million of its common stock.

Key Financial Results

· Revenues for the third quarter of 2006 totaled $74.6 million, a 7 percent increase from $69.7 million in the comparable period of 2005. Year over year, BNP sales increased 4 percent, while sales of Biosite’s other cardiovascular products increased 33 percent. Combined revenue from physician office laboratories and international markets grew 22 percent year over year.

· For the third quarter of 2006, GAAP diluted earnings per share was $0.49 and Non-GAAP diluted earnings per share was $0.74. By comparison, in the third quarter of 2005 the Company’s diluted earnings per share was $0.68.

Non-GAAP results exclude the impact of FAS 123R, Share-Based Payment, which relates to the expensing of non-cash stock-based compensation, such as stock options. The Company adopted FAS 123R as of January 1, 2006 on a modified prospective basis. See the tables included at the end of this release for a reconciliation of Non-GAAP financial results to GAAP financial results. See also, “About Non-GAAP Financial Measures” below.

· GAAP operating income for the third quarter of 2006 was $14.3 million. Non-GAAP operating income for the third quarter of 2006 was $20.6 million. In the comparable period of 2005, operating income was $19.6 million.

- more -

BIOSITE ANNOUNCES Q3 2006 RESULTS

-2-2-2-

· Cash generated from operations was $66.8 million in the first nine months of 2006 and $29.2 million in the third quarter of 2006, which was a 39 percent increase over the third quarter of 2005.

Following are financial highlights pertaining to revenues and cash flow for the three and nine months ended September 30, 2006 and 2005:

($ in 000’s)

	Three months ended						Nine months ended
	9/30/06		9/30/05		Change		9/30/06		9/30/05		Change
Triage® BNP Test sales	$	45,531	$	43,892	4	%	$	148,773	$	142,721	4	%
Other cardiovascular product sales	14,279		10,753		33	%	39,651		27,961		42	%
Other product sales	13,301		14,243		(7	%)	39,216		40,600		(3	%)
Total product sales	73,111		68,888		6	%	227,640		211,282		8	%
Total revenues	74,642		69,668		7	%	231,741		215,278		8	%

Cash flow from operations	$	29,219	$	20,947	39	%	$	66,809	$	79,341	(16	%)
Cash used for stock repurchases	—		—				30,000		—

	9/30/06		12/31/05		Change
Cash and marketable securities balance	$	159,078	$	132,412	20	%

“In the third quarter we experienced a slow down in BNP test utilization among our U.S. hospital customers that was lower than our expectations, but appears to be consistent with quarterly fluctuations we have seen in prior years,” said Kim Blickenstaff, Biosite’s chairman and chief executive officer. “While near term growth prospects in the BNP testing market have declined due to high penetration levels, our latest annual survey of more than 3,000 U.S. hospitals and other recent market surveys lead us to believe we are maintaining our strong franchise. This will be important to our future efforts to launch new products.

“In terms of our prospects for 2007, we expect our other cardiovascular products, U.S. physician office and international markets to be key sources of sales growth next year. However, currently these revenue bases are relatively small so they may have only a limited impact on overall growth in 2007. We continue to believe that the key to restoring our growth rates lies with new products, and therefore we will focus on advancing the most important opportunities in 2007.”

- more -

BIOSITE ANNOUNCES Q3 2006 RESULTS

-3-3-3-

Financial Guidance Update

Commenting on expectations for 2006, Biosite management decreased its 2006 total revenue target to $308 million from $316 million. The Company has also updated its Non-GAAP diluted earnings per share target from $3.30 to $3.19. Biosite’s GAAP diluted earnings per share target is $2.18. For 2007, Biosite management said its total revenue target is $326 million, a 6 percent increase over 2006.

“Biosite has reached an important stage in its evolution. Our core business remains stable, and we are generating substantial levels of cash, though growth has temporarily slowed while we work toward the commercialization of new products,” said Blickenstaff. “We believe that returning value to stockholders through a stock repurchase program that is accretive to earnings per share, along with funding key product development initiatives that will fuel long term growth are good uses of our cash at this time.”

See the Biosite Incorporated Guidance Data table included at the end of this release for additional details regarding the Company’s financial guidance data, a reconciliation of Non-GAAP financial guidance to GAAP financial guidance and a description of certain factors that could affect the Company’s actual financial results. See also, “About Non-GAAP Financial Measures” below.

Stock Repurchase Program

Biosite today announced that its board of directors approved an increase in the Company’s stock repurchase program, raising the amount of stock that the Company is authorized to repurchase over the next 12 months to $100 million from $50 million. In connection with this stock repurchase program, the Company has entered into a privately negotiated transaction with Goldman, Sachs & Co. to repurchase $100 million of its common stock. Based on Biosite’s closing stock price on October 25, 2006, the $100 million share repurchase authorization represents approximately 12 percent of the Company’s total market capitalization.

Biosite will immediately pay Goldman Sachs $100 million and will receive a substantial majority of the shares to be delivered under the agreement within approximately five weeks. The agreement includes collar provisions that establish the minimum and maximum numbers of shares to be repurchased. The specific number of shares to be repurchased is generally based on the volume-weighted average share price of the Company’s common shares during the six- to nine-month term of the accelerated repurchase agreement, subject to collar limits. All of the repurchased shares will be retired.

The board of directors may authorize additional amounts for the stock repurchase program depending on prevailing market conditions, available cash resources and other factors. Future repurchases of stock may be made in the open market, in privately negotiated transactions, or through the use of derivative securities or arrangements.

- more -

BIOSITE ANNOUNCES Q3 2006 RESULTS

-4-4-4-

“We are increasingly excited by the number of highly innovative products in our research and development pipeline, which resulted from our Biosite Discovery and licensing activities over the past several years,” said Blickenstaff. “These represent significant advances in diagnostic medicine for a variety of critical disease states and underscore the value of our commitment to research.

“In assessing this potential for our business and pipeline, we believe Biosite shares are substantially undervalued and represent a very attractive investment at current price levels. Our announced share repurchase program is a tangible demonstration of our confidence in our future potential. We are pleased that our strong balance sheet and history of free cash flow, which reflect the success of our business model, allow us to make this commitment at this time.”

Research and Development

In the area of research and development, Biosite reported that it has continued to advance activities related to its top priority product initiatives: the Triage Sepsis Panel, intended to aid in the diagnosis of sepsis, a test to aid in the diagnosis of acute kidney injury, and next generation products based on theTriage Cardio Profilerâ Panel, a product currently used to aid in the evaluation of chest pain patients. Clinical trials intended to support regulatory submissions for these products are expected to commence in 2007.

Also in the third quarter of 2006, Biosite continued development of a protocol for a clinical trial aimed at supporting submission of a filing seeking regulatory approval to market the Triage Stroke Panel in the United States. Other activities included site selection activities and preparations for a pilot study that is expected to take place in 2007.

“With more than 3,000 hospital customers, we have built an impressive installed base of business in the United States and have a pipeline of promising products,” said Ken Buechler, Biosite’s president and chief scientific officer. “We believe our product pipeline has the potential to deliver significant growth in the future, but to make it happen we must focus our resources on a few key opportunities. We will maintain our development activities on a variety of other programs, but will not raise their priority until we execute on our top priority product initiatives.”

About Biosite® Incorporated

Biosite Incorporated is a leading bio-medical company commercializing proteomics discoveries for the advancement of medical diagnosis. The Company’s products contribute to improvements in medical care by aiding physicians in the diagnosis of critical diseases and health conditions. Biosite’s Triage® rapid diagnostics are used in more than 50 percent of U.S. hospitals and in more than 60 international markets. Information on Biosite can be found at www.biosite.com.

- more -

BIOSITE ANNOUNCES Q3 2006 RESULTS

-5-5-5-

Investor Conference Call

Biosite will host an investor conference call to discuss financial results and research and development progress. The call will take place today, October 26, 2006, at 1:30 p.m. PDT. A live webcast of the call can be accessed via the Internet at www.biosite.com. The phone number for U.S. callers is (866) 362-4831 and international callers is (617) 597-5347. The conference call code for the live call is 70356502. The call will be archived on the Biosite website for at least 21 days. The phone replay number is (888) 286-8010. International callers, please dial (617) 801-6888. Please reference the conference call code 34186056.

About Non-GAAP Financial Measures

This press release contains financial results and guidance that excludes the effects of FAS 123R, Share-Based Payment, which relates to stock-based compensation, and is not in accordance with U.S. generally accepted accounting principles (GAAP). The Company believes that this Non-GAAP financial measure provides meaningful supplemental information to both management and investors that is indicative of the Company’s core operating results and facilitates comparison of operating results across reporting periods. The Company uses this Non-GAAP measure when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. This Non-GAAP measure should not be viewed in isolation from or as a substitute for the Company’s financial results or guidance in accordance with GAAP. Assumptions regarding the valuation of stock-based compensation and the timing of events, such as the issuance of new stock-based compensation awards and the realization of tax benefits, may differ from actual results. For more information, please see the guidance table included at the end of this release.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Examples of forward-looking statements are financial targets and growth objectives and also include but are not limited to statements that are preceded by, followed by, or that include the words “will”; “believes”; “should”; “intend”; “anticipates”; “plans”; “expects”; “estimates”; or similar statements. Forward-looking statements in this press release include statements regarding the Company’s expected financial performance for the 2006 and 2007 fiscal years, such as anticipated revenues and earnings per share, the Company’s ability to maintain market share for BNP testing, the Company’s plans to complete the development of the Triage Sepsis Panel, an acute kidney injury test and next generation Triage Cardio Profiler products, and commence related clinical trials for these potential products and the Triage Stroke Panel when expected, as well as the Company’s ability to launch new products when anticipated. Risks and uncertainties include risks associated with Biosite’s ability to commence and complete clinical trials as currently planned; Biosite’s ability to adequately respond to the U.S. Food & Drug Administration’s questions regarding the pending 510(k) filing for MPO; Biosite’s ability to complete the development of a satisfactory Protein C test; Biosite’s ability to obtain regulatory approvals and

- more -

BIOSITE ANNOUNCES Q3 2006 RESULTS

-6-6-6-

complete other pre-market activities needed to launch new products as currently planned, including the MPO test, a sepsis panel, a panel for acute kidney injury and a Protein C test; Biosite’s ability to effectively promote and market acceptance of any new products; the continued growth of the BNP market generally, including the physician office market; the Company’s ability to effectively expand sales activities outside the United States; and other risks associated with changing market conditions and the effect of competition from companies with greater capital and resources, including the impact on market pricing for BNP testing generally. Other risks that should be considered are detailed in the Company’s most recent Annual Report on Forms 10-K and 10-Q and other SEC filings. The Company disclaims, however, any intent or obligation to update these forward-looking statements. Copies of the Company’s SEC filings are available from the Investor Relations department or from the Company’s website.

###

Biosite®, Cardio Profiler®, Triage® and New Dimensions in Diagnosis® are registered trademarks of Biosite Incorporated.

Biosite Incorporated
Unaudited Statements of Income Data — GAAP
(in thousands, except per share data and margins)

	Three months ended								Nine months ended
	September 30,								September 30,
	2006			2005			% Change		2006			2005			% Change

Total revenues:
Product sales	$	73,111		$	68,888		6	%	$	227,640		$	211,282		8	%
Contract revenue	1,531			780			96	%	4,101			3,996			3	%
Total revenues	74,642			69,668			7	%	231,741			215,278			8	%

Gross margin on product sales	68		%	70		%			69		%	70		%

Operating expenses:
Cost of product sales	23,694			20,900			13	%	70,236			64,155			9	%
Selling, general and administrative	24,107			17,858			35	%	72,909			54,930			33	%
Research and development	12,512			10,549			19	%	39,354			31,509			25	%
License and patent disputes	—			788			(100	)%	3,142			1,340			134	%
Total operating expenses	60,313			50,095			20	%	185,641			151,934			22	%

Operating income	14,329			19,573			(27	)%	46,100			63,344			(27	)%

Operating income as % of total revenue	19		%	28		%			20		%	29		%

Interest and other income, net	1,312			1,095			20	%	3,554			1,669			113	%

Income before provision for income taxes	15,641			20,668			(24	)%	49,654			65,013			(24	)%

Provision for income taxes	(6,600		)	(8,099		)	(19	)%	(20,134		)	(24,680		)	(18	)%

Net income	$	9,041		$	12,569		(28	)%	$	29,520		$	40,333		(27	)%

Diluted earnings per share	$	0.49		$	0.68		(28	)%	$	1.60		$	2.19		(27	)%

Diluted shares used in calculating per share amounts	18,282			18,596					18,395			18,394

Share-based compensation expense for stock options and the employee stock purchase plan recorded in accordance with FAS 123R for continuing operations:


Cost of product sales	$	867		$	—	$	1,870		—
Selling, general and administrative	3,674			—		11,523			—
Research and development	1,702			—		5,299			—
Subtotal	$	6,243		$	—	$	18,692		—
Tax benefit	(1,866		)	—		(5,283		)	—
Total	$	4,377		$	—	$	13,409		—

Biosite Incorporated
Unaudited Statements of Income Data — Non-GAAP
(in thousands, except per share data and margins)

NOTE: Non-GAAP results exclude the impact of FAS 123R, which relates to the expensing of non-cash stock-based compensation

	Three months ended								Nine months ended
	September 30,								September 30,
	2006			2005			% Change		2006			2005			% Change

Total revenues:
Product sales	$	73,111		$	68,888		6	%	$	227,640		$	211,282		8	%
Contract revenue	1,531			780			96	%	4,101			3,996			3	%
Total revenues	74,642			69,668			7	%	231,741			215,278			8	%

Gross margin on product sales	69		%	70		%			70		%	70		%

Operating expenses:
Cost of product sales	22,827			20,900			9	%	68,366			64,155			7	%
Selling, general and administrative	20,433			17,858			14	%	61,386			54,930			12	%
Research and development	10,810			10,549			2	%	34,055			31,509			8	%
License and patent disputes	—			788			(100	)%	3,142			1,340			134	%
Total operating expenses	54,070			50,095			8	%	166,949			151,934			10	%

Operating income	20,572			19,573			5	%	64,792			63,344			2	%

Operating income as % of total revenue	28		%	28		%			28		%	29		%

Interest and other income, net	1,312			1,095			20	%	3,554			1,669			113	%

Income before provision for income taxes	21,884			20,668			6	%	68,346			65,013			5	%

Provision for income taxes	(8,466		)	(8,099		)	5	%	(25,417		)	(24,680		)	3	%

Net income	$	13,418		$	12,569		7	%	$	42,929		$	40,333		6	%

Diluted earnings per share	$	0.74		$	0.68		9	%	$	2.36		$	2.19		8	%

Diluted shares used in calculating per share amounts	18,017			18,596					18,154			18,394

Biosite Incorporated
Unaudited Reconciliation of Consolidated Statements of Income Data — Non-GAAP to
Consolidated Statements of Income Data — GAAP
(in thousands, except per share data and margins)

	Three months ended									Three months ended
	September 30, 2006									September 30, 2005
	Non-GAAP			Adjmts			GAAP			Non-GAAP			Adjmts			GAAP

Total revenues:
Product sales	$	73,111		$	—		$	73,111		$	68,888		$	—		$	68,888
Contract revenue	1,531			—			1,531			780			—			780
Total revenues	74,642			—			74,642			69,668			—			69,668

Gross margin on product sales	69		%	(1		)%	68		%	70		%	0		%	70		%

Operating expenses:
Cost of product sales	22,827			867		[a]	23,694			20,900			—			20,900
Selling, general and administrative	20,433			3,674		[a]	24,107			17,858			—			17,858
Research and development	10,810			1,702		[a]	12,512			10,549			—			10,549
License and patent disputes	—			—			—			788			—			788
Total operating expenses	54,070			6,243			60,313			50,095			—			50,095

Operating income	20,572			(6,243		)	14,329			19,573			—			19,573

Operating income as % of total revenue	28		%	(9		)%	19		%	28		%	0		%	28		%

Interest and other income, net	1,312			—			1,312			1,095			—			1,095

Income before provision for income taxes	21,884			(6,243		)	15,641			20,668			—			20,668

Provision for income taxes	(8,466		)	1,866		[a]	(6,600		)	(8,099		)	—			(8,099		)

Net income	$	13,418		$	(4,377	)	$	9,041		$	12,569		$	—		$	12,569

Diluted earnings per share	$	0.74		$	(0.25	)	$	0.49		$	0.68		$	—		$	0.68

Diluted shares used in calculating per share amounts	18,017			265			18,282			18,596			—			18,596

[a] - Adjustments to exclude from Non-GAAP financial measures the impact of FAS 123R, which relates to the expensing of non-cash stock-based compensation, beginning the first quarter of 2006

	Nine months ended									Nine months ended
	September 30, 2006									September 30, 2005
	Non-GAAP			Adjmts			GAAP			Non-GAAP			Adjmts			GAAP

Total revenues:
Product sales	$	227,640		$	—		$	227,640		$	211,282		$	—		$	211,282
Contract revenue	4,101			—			4,101			3,996			—			3,996
Total revenues	231,741			—			231,741			215,278			—			215,278

Gross margin on product sales	70		%	(1		)%	69		%	70		%	0		%	70		%

Operating expenses:
Cost of product sales	68,366			1,870		[a]	70,236			64,155			—			64,155
Selling, general and administrative	61,386			11,523		[a]	72,909			54,930			—			54,930
Research and development	34,055			5,299		[a]	39,354			31,509			—			31,509
License and patent disputes	3,142			—			3,142			1,340			—			1,340
Total operating expenses	166,949			18,692			185,641			151,934			—			151,934

Operating income	64,792			(18,692		)	46,100			63,344			—			63,344

Operating income as% of total revenue	28		%	(8		)%	20		%	29		%	0		%	29		%

Interest and other income, net	3,554			—			3,554			1,669			—			1,669

Income before provision for income taxes	68,346			(18,692		)	49,654			65,013			—			65,013

Provision for income taxes	(25,417		)	5,283		[a]	(20,134		)	(24,680		)	—			(24,680		)

Net income	$	42,929		$	(13,409	)	$	29,520		$	40,333		$	—		$	40,333

Diluted earnings per share	$	2.36		$	(0.76	)	$	1.60		$	2.19		$	—		$	2.19

Diluted shares used in calculating per share amounts	18,154			241			18,395			18,394			—			18,394

[a] - Adjustments to exclude from Non-GAAP financial measures the impact of FAS 123R, which relates to the expensing of non-cash stock-based compensation, beginning the first quarter of 2006

Biosite Incorporated
Selected Product Data
(in thousands, except margins and %’s)


Sales by Product:	Q1 2005			Q2 2005			Q3 2005			Q4 2005			Q1 2006			Q2 2006			Q3 2006
Triage® Drugs of Abuse Products	$	10,283		$	11,341		$	12,408		$	11,018		$	11,547		$	10,464		$	11,444
Triage Cardiac Panel	5,985			6,439			7,142			6,629			6,616			7,188			6,902
Triage BNP Tests	49,771			49,058			43,892			46,893			52,564			50,678			45,531
Triage Profiler Products	1,946			2,226			2,852			3,465			4,036			4,598			5,735
Triage D-Dimer Test	131			481			757			1,489			1,417			1,450			1,616
Triage Parasite Panel	255			283			355			269			286			337			377
Triage C. difficile Panel	1,349			1,377			942			988			1,029			1,088			1,022
Triage Meters	776			693			538			724			625			539			458
Triage Stroke Panel (EU)	—			—			2			15			37			30			26
Total Product Sales	$	70,496		$	71,898		$	68,888		$	71,490		$	78,157		$	76,372		$	73,111


International Sales:	Q1 2005			Q2 2005			Q3 2005			Q4 2005			Q1 2006			Q2 2006			Q3 2006
International Sales as % of Product Sales	13		%	12		%	12		%	13		%	14		%	15		%	14		%
BNP International Sales as % of BNP Total Sales	10		%	9		%	9		%	10		%	11		%	11		%	10		%



Margin by Product Type (a), (b):	Q1 2005			Q2 2005			Q3 2005			Q4 2005			Q1 2006			Q2 2006			Q3 2006
Triage Drugs of Abuse Product Line	82		%	78		%	82		%	81		%	79		%	77		%	73		%
Triage Cardiovascular Product Line (incl. BNP)	72		%	69		%	69		%	70		%	71		%	70		%	68		%

(a) These margins do not include all products. The Triage Meters, Triage Micro Product Line and Triage Stroke Panel are not included.

(b) Includes the impact of FAS 123R, which relates to the expensing of non-cash stock-based compensation, beginning the first quarter of 2006

Biosite Incorporated
Unaudited Balance Sheet Data — GAAP
(in thousands)

	September 30, 2006		December 31, 2005
	Unaudited
Assets
Cash, cash equivalents & marketable securities	$	159,078	$	132,412
Accounts receivable	30,997		30,303
Inventories	31,871		32,627
Other current assets	8,908		9,422
Total current assets	230,854		204,764

Property, equipment and leasehold improvements, net	158,218		151,018
Patents and license rights, net	9,828		4,764
Other assets	12,958		7,380
Total assets	$	411,858	$	367,926

Liabilities and Stockholders’ Equity
Current liabilities	$	50,902	$	39,104
Long-term liabilities	9,152		13,457
Stockholders’ equity	351,804		315,365
Total liabilities and stockholders’ equity	$	411,858	$	367,926

Biosite Incorporated
Guidance Data
(in thousands, except per share data, margins and %’s)

The financial guidance provided below is an estimate based on information available as of October 26, 2006. The Company’s future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below. Some of the factors that could affect the Company’s actual financial results are stated above in the section entitled “Forward Looking Statements” and in the Company’s filings with the SEC. The Company assumes no obligation to update the guidance set forth below.

	Three months ended December 31, 2006
	Non-GAAP Estimate			Adjustments (a)			GAAP Estimate

Triage® BNP product sales	$	48,000		—			$	48,000
Total product sales	$	75,500		—			$	75,500

Total revenues	$	76,500		—			$	76,500

International product sales % of Total product sales	16.0		%	—			16.0		%

Gross margin on product sales	69.5		%	(1.0		)%(b)	68.5		%

Operating expenses (excl. Cost of sales) % of Revenue	40.0		%	7.0		% (b)	47.0		%

Operating income as % of total revenues	29.5		%	(8.0		)%(b)	21.5		%

Diluted earnings per share	$	0.83		$	(0.25	) (b)	$	0.58

Income tax rate	38.5		%	3.0		% (b)	41.5		%

Cash flow from operations	$	15,000		—			$	15,000

	Year ended December 31, 2006
	Non-GAAP Estimate			Adjustments (a)			GAAP Estimate

Triage BNP product sales	$	196,500		—			$	196,500
Total product sales	$	303,000		—			$	303,000

Total revenues	$	308,000		—			$	308,000

International sales % of total sales	15.0		%	—			15.0		%

Gross margin on product sales	70.0		%	(1.0		)%(b)	69.0		%

Operating expenses (excl. Cost of sales) % of revenues	42.0		%	7.0		% (b)	49.0		%

Operating income as % of total revenues	28.5		%	(8.0		)%(b)	20.5		%

Diluted earnings per share	$	3.19		$	(1.01	) (b)	$	2.18

Income tax rate	37.5		%	3.5		% (b)	41.0		%

Cash flow from operations	$	80,000		—			$	80,000

	Year ended December 31, 2007
	Non-GAAP Estimate		Adjustments (a)	GAAP Estimate

Total revenues	$	326,000	—	$	326,000

(a) These adjustments reconcile the Company’s non-GAAP financial guidance to its GAAP financial guidance for the next quarter and full year 2006 and the full year 2007. See the section entitled “About Non-GAAP Financial Measures” above.

(b) Reflects the estimated non-cash compensation expense attributable to stock-based compensation awards including stock options and employee stock purchase plan shares and their estimated impact on income taxes and diluted shares used in calculating EPS. This amount reflects the total estimated expense from the application of FAS 123R, which the Company adopted in the first quarter of 2006.