Given Imaging Announces Fourth Quarter and Year End 2002 Results
Growth reflects significant progress on all fronts

2/12/2003 - Yoqneam, Israel - Given Imaging Ltd. (NASDAQ:GIVN), today announced fourth quarter and year end results for the period ended December 31, 2002. The Company reported that worldwide sales of its Given® Diagnostic Imaging System and M2A video capsule grew to $28.9 million for the twelve months ended December 31, 2002. Revenues for the fourth quarter were $9.0 million, up 20% from the third quarter, and 157% above the fourth quarter of 2001.

"2002 was a year of profound achievement for Given Imaging as we accomplished all of our major milestones: financial reimbursement, production and medical community acceptance. We also invested significant resources in expanding our international sales and marketing organization and global distribution network, which covers now 50 countries" said Gavriel D. Meron, President and CEO of Given Imaging. "Most importantly, the medical community now recognizes our Given Diagnostic System as an essential diagnostic tool for detecting and diagnosing a growing number of small bowel disorders. As we enter 2003, all of the pieces are in place to build broader proliferation of our technology and value for shareholders. Our financial position is strong and we believe that we will reach breakeven in the second half of this year."

On a geographic basis, sales of the Given System in the United States accounted for more than half of total annual revenues. A geographical breakdown of annual sales is as follows:
(millions of US dollars)
United States $15.7
Europe $$8.3
ROW $4.9

Fourth Quarter and Full Year 2002 Financials
Revenues totaled $9.0 million during the fourth quarter, up from $7.5 in the third quarter, and $3.5 in the fourth quarter of 2001. Gross profit was 66% of revenues, up from 58.7% in the third quarter, and 50.6% in the fourth quarter of 2001. Net loss for the fourth quarter was $3.7 million, or $0.15 per share, down from a net loss of $4.0 million in the third quarter of 2002, or $0.16 per share, and $6.5 million in the fourth quarter of 2001, or $0.26.

For the year ended December 31, 2002, revenues were $28.9 million and gross profit was 59% of revenues. Net loss for the full year 2002 was $18.3 million or $0.73 per share, compared to a net loss of $18.7 million in 2001 or $1.60 per share ($0.74 per share on an adjusted, post-initial public offering basis of 25,104,913 shares).

By year-end 2002, cumulative deliveries of the Given Diagnostic System reached more than 1,000, with more than 460 systems installed in the United States.

In light of the concerns regarding any impact of an armed conflict in Iraq, Given Imaging reiterates its contingency supply arrangements, consisting of a back-up manufacturing facility and strategic inventories of finished goods and materials outside of Israel.

Fourth Quarter Highlights
During the fourth quarter, Given Imaging accomplished the following milestones:

• Sold approximately 8,200 M2A capsules, of which more than 5,800 represent reorders. Cumulatively, approximately 30,000 M2A capsules have been sold to date.
• Received an Ambulatory Payment Classification (APC) from CMS (Centers for Medicare & Medicaid) for capsule endoscopy for U.S. Medicare patients in an outpatient hospital setting. CMS also assigned a temporary G code for physicians to use when reporting capsule endoscopy to Medicare.
• Saw further medical community acceptance as evidenced by the number of abstracts and sessions devoted to capsule endoscopy at the United European Gastroenterology Week (UEGW) in Geneva, Switzerland, the American College of Gastroenterologists (ACG) Annual Meeting in Seattle, Washington, and the Australian Gastro Week (AGW) this month. Data on nearly 1,700 patients was presented showing superiority of capsule endoscopy over conventional methods in diagnosing small bowel diseases including cancer, Crohn's disease, gastro-intestinal bleeding, inflammatory bowel disease and celiac.
• Continued the roll-out of the ASGE sponsored CME courses on capsule endoscopy throughout the United States.
• Received reimbursement coverage by The Regence Group of Oregon, Washington, Utah and Idaho; Blue Cross of California; Blue Cross & Blue Shield of Rhode Island Medicare and HGSAdministrators which is Highmark of Pennsylvania's government business unit for capsule endoscopy.
• Obtained reimbursement coverage beyond bleeding for patients who demonstrate symptoms of Crohn's disease or small bowel tumors that cannot be confirmed by other methods from HGSAdministrators. Grew the U.S. field force to 40 sales professionals.
• Signed a long-term development and supply agreement with Micron Technology to provide CMOS image sensors used in the M2A capsule.
• Launched the Rapid 2 and Booster to support new features such as Multiview and reporting software that enhance the physician's efficiency in using the Given Diagnostic System.
• Received regulatory approval from the Russian Federation
• Received the "Photonics Circle of Excellence" award, recognizing the 25 most innovative New Products of the year 2002

Guidance
Based on our positive fourth quarter and full year performance, the Company is now prepared to issue guidance for the first time.

The Company expects its revenues for 2003 to increase approximately 100% over 2002 revenues of $28.9 million.

Looking forward to the first quarter of 2003, the Company expects its revenues to increase approximately 100% over its first quarter 2002 revenues of $5.2 million.

The Company expects to reach breakeven and achieve sustainable profitability in the second half of 2003.

Fourth Quarter Webcast Information
Given Imaging will host a conference call tomorrow, Thursday, February 13, 2002, at 9:00 am Eastern Standard Time (4:00 pm Israel time) to discuss its 2002 results. The conference call will be webcast through the Company's website www.givenimaging.com.

This press release contains forward-looking statements about Given Imaging, including projections about our business, our future revenues, and our future profitability, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, words such as "anticipates," "estimates," "expects," "intends," "plans," "believes," and words and terms of similar substance used in connection with any discussion of future operating or financial performance identify such forward-looking statements. Those forward-looking statements are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including but not limited to the following: changes in regulatory environment, our success in implementing our sales, marketing and manufacturing plan, protection and validity of patents and other intellectual property rights, the impact of currency exchange rates, the effect of competition by other companies, the outcome of future litigation, the reimbursement policies for our product from healthcare payors, quarterly variations in operating results, the possibility of armed conflict or civil or military unrest in Israel and other risks disclosed in our filings with the U.S. Securities Exchange Commission.

19.Sept.'03