Date:5/15/2012

effectively address the market.  26 million American adults have Chronic Kidney Disease (CKD) and millions of others are at increased risk.  CKD is a progressive disease which ultimately leads to kidney failure.  There are more than half a million patients whose kidneys have failed requiring them to seek treatment.  Of these, approximately 370,000 are receiving hemodialysis and this number is growing yearly.  In 2009 the total medical care costs for Chronic Renal Failure reached $42.5 billion.

UltrafiltrationFor the first quarter of 2012, Nephros recorded approximately $243,000 of sales related to its water ultrafiltration products, a 69% increase over the prior year.  With the recent additions of Shane Sullivan as Director of U.S. Sales and Dr. Joseph Cervia as a strategic consultant, Nephros is focused on the waterborne hospital infection control market and other addressable markets for the water ultrafiltration product line.  Observational studies have shown a significant reduction in required erythropoietin dosing when the Nephros DSU is utilized during hemodialysis therapy.  In a separate study involving two major U.S. hospitals, the Nephros DSU system was shown to be effective in reducing waterborne Legionella bacteria to undetectable levels, an effect which was sustained for the 3-month study period.  We believe that market forces including more stringent standards for dialysis water purity from the Association for the Advancement of Medical Instruments (AAMI), bundling of dialysis reimbursement payments, and CMS initiatives which relate hospital reimbursement rates to infection control compliance can provide positive momentum for increased adoption of the Nephros ultrafiltration products.

Collaborative AgreementsDuring 2011, Nephros completed the initial milestones under the joint collaboration agreement with STERIS Corp. (NYSE:

SOURCE Nephros, Inc. Copyright©2010 PR Newswire. All rights reserved

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