July 24, 2008

IsoRay Receives No List of Observations (Form FDA 483) in FDA Inspection

IsoRay, Inc. (AMEX:ISR) announced today the completion of a baseline inspection by the Food and Drug Administration (FDA) for all its Quality Systems.

IsoRay underwent its first inspection by the FDA over a period of 5 days from July 14th through July 18th. The inspection covered the manufacturing and quality systems at its Richland facility. At the end of the inspection no report of deviations from Good Manufacturing Practices or list of observations (form FDA 483) was issued to IsoRay.

"This was our first inspection by the FDA and involved a review of our entire Quality System. The fact that no 483 was issued from our first inspection is an important and very positive milestone in our company's history," stated Fred Swindler, Vice President of Regulatory Affairs and Quality Assurance.

"IsoRay is dedicated to the continual improvement of our Quality Systems and providing all the resources necessary to maintain robust systems," stated Dwight Babcock, CEO. "We appreciate all the dedication and hard work that everyone at IsoRay has put into the development of strong quality systems and we will continue our commitment to meet or exceed FDA requirements and expectations."

IsoRay uses a team approach to seek continual improvement of our Quality Systems, which are at the center of all our manufacturing, research, and development activities.

About IsoRay

IsoRay, Inc., through its subsidiary, IsoRay Medical, Inc., is the sole producer of the Proxcelan Cesium-131 brachytherapy seeds, used to treat prostate and other cancers. Proxcelan seeds offer a significantly shorter half-life than the two other isotopes commonly used for brachytherapy, which results in a substantially faster delivery of therapeutic radiation, lower probability of cancer cell survival and reduction of the longevity of common brachytherapy side effects. (a) (b). IsoRay is based in Richland, Washington. More information is available about IsoRay at www.isoray.com.

(a) Armpilia CI, Dale RG, Coles IP, et al. The Determination of Radiobiologically Optimized Half-lives for Radionuclides Used in Permanent Brachytherapy Implants. Int. J. Radiation Oncology Biol. Phys. 2003; 55 (2): 378-385.

(b) Prestidge B.R., Bice W.S., Jurkovic I., et al. Cesium-131 Permanent Prostate Brachytherapy: An Initial Report. Int. J. Radiation Oncology Biol. Phys. 2005; 63 (1): 5336-5337.

Safe Harbor Statement

Statements in this news release about IsoRay's future expectations, including: the advantages of our Proxcelan Cesium-131 seed, whether IsoRay will continue to meet FDA requirements and expectations, whether IsoRay's quality control systems will be maintained or improved in the future, and all other statements in this release, other than historical facts, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). This statement is included for the express purpose of availing IsoRay, Inc. of the protections of the safe harbor provisions of the PSLRA. It is important to note that actual results and ultimate corporate actions could differ materially from those in such forward-looking statements based on such factors as physician acceptance, training and use of our products, our ability to successfully manufacture, market and sell our products, our ability to manufacture our products in sufficient quantities to meet demand within required delivery time periods while meeting our quality control standards, our ability to enforce our intellectual property rights, whether additional studies are released and support the conclusions of early clinical studies, and other risks detailed from time to time in IsoRay's reports filed with the SEC.