Nanogen Announces $20 Million Financing Transaction

"We are pleased to announce this financing from a group of solidinstitutional investors familiar with both our market place and ourlong term prospects," said Howard C. Birndorf, Nanogen chairman andchief executive officer. "This financing provides the company with avehicle for long term continued investment in the company and allowsus to focus on our core objectives of managing the business andimproving our EBITDA performance."

The unsecured Senior Convertible Notes to be issued in thefinancing will bear interest annually at a rate of 6.25% per annum andwill provide investors with the right to convert principal intoregistered shares of Nanogen common stock at $1.27 per share, whichcarries a premium of approximately 12% over the closing bid price ofNanogen's stock on August 24, 2007. The Notes have a three year termand, subject to certain conditions, the company may elect to makepayments of interest in cash or stock. After 24 months, Nanogen willhave the right to force conversion of the Notes into shares of thecompany's common stock, depending on the performance of the commonstock. The company will initially place $7.3 million of the funds in arestricted bank account that will become unrestricted subject tocertain stock price performance criteria.

Additionally, the investors initially received warrants topurchase approximately 11.0 million shares of common stock at anexercise price of $1.14 per share for a term of five years, which maybe replaced with additional warrants if these initial warrants areexercised. Under certain circumstances, the company can force theexercise of these warrants, depending upon the performance of itscommon stock, which will provide the company access to additionalcapital.

Nanogen expects to use the net proceeds from the offering forworking capital and general corporate purposes. For additional detailsconcerning this transaction and the warrants, please see Nanogen's 8-Kfiled on August 27, 2007.

This press release is not an offer to sell or the solicitation ofan offer to buy nor shall there be any sale of such Notes or Warrantsin any state in which such offer, solicitation or sale would beunlawful prior to registration or qualification under the securitieslaws of any such state. The securities are being offered under thecompany's shelf registration statements filed with the Securities andExchange Commission and only by means of a prospectus supplement, baseprospectus and final term sheet, copies of which may be obtained fromSeven Hills Partners, LLC, 275 Battery Street, 16th Floor, SanFrancisco, California 94111, collect: (415) 869-6223.

About Nanogen, Inc.

Nanogen's advanced technologies provide researchers, cliniciansand physicians worldwide with improved methods and tools to predict,diagnose, and ultimately help treat disease. The company's productsinclude real-time PCR reagents, the NanoChip® electronic microarrayplatform and a line of rapid, point-of-care diagnostic tests.Nanogen's ten years of pioneering research involving nanotechnologyholds the promise of miniaturization and continues to be supported forits potential for diagnostic and biodefense applications. Foradditional information please visit Nanogen's website at.

Nanogen Forward-Looking Statement

This press release contains forward-looking statements that aresubject to risks and uncertainties that could cause actual results todiffer materially from those set forth in the forward-lookingstatements, including whether patents owned or licensed by Nanogenwill be developed into products, whether the patents owned by Nanogenoffer any protection against competitors with competing technologies,whether products under development can be successfully developed andcommercialized, whether results reported by our customers or partnerscan be identically replicated, and other risks and uncertaintiesdiscussed under the caption "Factors That May Affect Results" andelsewhere in Nanogen's Form 10-K or Form 10-Q most recently filed withthe Securities and Exchange Commission. These forward-lookingstatements speak only as of the date hereof. Nanogen disclaims anyintent or obligation to update these forward-looking statements.