Stratagene Corporation (Nasdaq:STGN), a developer, manufacturer and marketer of specialized life science research and diagnostic products, today released final financial results for the fourth quarter of 2006 ended December 31, 2006 that were in-line with preliminary results issued on February 1, 2007.

For the fourth quarter of 2006, revenue was $24.7 million, compared with revenue of $57.1 million in the fourth quarter of 2005 or $23.0 million on a non-GAAP basis in the fourth quarter of 2005. The historical non-GAAP revenue comparison excludes the one-time settlement income received from Cambridge Antibody Technology. The increase in revenues on a non-GAAP basis was 7.2% and related primarily to increases in sales of QPCR instruments and reagents and allergy diagnostics products.

The Company has provided a reconciliation of adjusted revenues and earnings for 2006 compared to 2005 to reflect the results of operations without the significant non-recurring charges for litigation judgments and settlements recorded both in 2005 and 2006.

“During the fourth quarter we began to see the positive results of our product development and sales strategies come to fruition and as a result, we achieved quarterly year-over-year revenue growth,” said Joseph Sorge, MD, Chairman and CEO of Stratagene. “Our core business continues to generate strong and predictable earnings power as well as cash flow, which allows us to continue to develop our exciting and proprietary technology and testing platform for the growing molecular diagnostics market,” said Joseph Sorge.

Fourth Quarter 2006 and Recent Highlights

* QPCR instrument and reagent growth of 7.5% year-over-year

* Allergy diagnostic products growth of 22% year-over-year

* Non-GAAP earnings per share of $0.09 compared with $0.01 per share in the fourth quarter of 2005

* License agreement with Max Planck that provides access to microRNA sequences for the development, manufacture and sale of Molecular Diagnostic Kits

* Settled patent litigation with Third Wave Technology, Inc. The settlement resolves the 2005 judgment, returns more than $10 million in cash to Stratagene and provides a mechanism for cross-licenses between the parties in the future

“We resolved the litigation matter with Third Wave which returns more than $10 million to our operating accounts,” continued Dr. Sorge. “A goal for 2007 is to continue to reduce expenses associated with litigation, and as a result achieve improved cash flows. With a stronger balance sheet and freedom to market our FullVelocity technology platform, we believe we are well positioned to successfully cultivate relationships with emerging leaders in the molecular diagnostics market.

“We continue to execute on our three-pronged molecular diagnostics growth strategy that focuses on licensing and selling FullVelocity to reference labs, acquiring and developing target intellectual property to build Stratagene-branded testing kits, and selling our differentiated instruments,” continued Dr. Sorge. “At the same time, we believe that our core life science and clinical diagnostics business can continue to grow profitably and serve as a stable platform from which to continue to execute a molecular diagnostics growth strategy.”

For the fourth quarter of 2006, Stratagene recorded net income of $9.0 million. Net income during the fourth quarter of 2006 included a $10.6 million pre-tax litigation benefit ($6.7 million or $0.30 per share after tax) related to the settlement of the Third Wave vs. Stratagene litigation matter which was settled for $10.75 million in January of 2007. In 2005, Stratagene recorded a $20.6 million litigation charge for this matter. Also in the fourth quarter of 2006, Stratagene reduced the accrual for another litigation matter by $0.8 million before tax ($0.5 million or $0.02 per share after tax). On a GAAP basis, including the litigation benefit, the litigation adjustment and the impact from the adoption of FAS 123R on January 1, 2006, fourth quarter 2006 earnings were $0.40 per share. Excluding these benefits and adjustments, on a non-GAAP basis fourth quarter 2006 earnings would have been $0.09 per share.

The fourth quarter of 2006 also benefited from an adjustment to increase the Company’s full year income tax benefit as a result of the reinstatement of the Federal research and investment credit. The tax rate also benefited in the fourth quarter from the reversal of tax reserves based on the expected results of tax examinations currently in progress. These items increased net income by $0.3 million or $0.01 per share.

GAAP net income in the fourth quarter of 2005 was $2.0 million or $0.09 per share. Net income during the fourth quarter of 2005 included a $23.4 million net pre-tax benefit ($14.6 million or $0.65 per share after tax) from the one-time cash payment from Cambridge Antibody Technology in satisfaction of certain patent owners' interests in a collaboration for the development of Abbott Laboratories' Humira product, offset by a $20.6 million pre-tax litigation charge ($12.9 million or $0.57 per share after tax) related to the judgment entered in favor of Third Wave Technologies. On a non-GAAP basis, excluding this one-time cash payment and pre-tax litigation charge, fourth quarter 2005 earnings would have been $0.01 per share.

Full Year 2006 Results

For the full year 2006, the Company reported revenues of $95.6 million. For the full year 2005, the Company reported $130.3 million in revenue. Excluding the aforementioned one-time payment from Cambridge Antibody Technology, revenue in 2005 would have been $96.2 million. Net income for the full year 2006 was $59,000 or $0.00 per share. Net income during 2006 included $10.0 million in net pre-tax litigation and interest charges ($6.3 million or $0.29 per share after tax) and non-cash stock based compensation expenses related to the implementation of FAS 123R on January 1, 2006. The stock-based compensation expense associated with FAS 123R accounted for $0.9 million before taxes ($0.6 million or $0.02 per share after tax). On a non-GAAP basis, excluding the net litigation charges and stock-based compensation, full year 2006 earnings would have been $0.31 per share compared with non-GAAP earnings of $0.27 per share in 2005. As indicated previously, 2005 non-GAAP income excludes the one-time cash payment from Cambridge Antibody Technology and the litigation charge associated with the Third Wave Technologies matter.

As of December 31, 2006, the Company had total cash and cash equivalents of approximately $42.9 million. In January of 2007, Stratagene agreed to pay Third Wave $10.75 million in cash as full satisfaction for the judgment previously entered in the amount of $20.7 million in the litigation. With the payment to Third Wave, the litigation matter was resolved and the remaining cash associated with the $21.0 million appeal bond will be returned to Stratagene. After this settlement, Stratagene has approximately $32.2 million of total cash and cash equivalents which includes $12.2 million in restricted cash for the appeal of the court decision in the Company’s litigation with Invitrogen. The bond amount associated with this case was approved by the Federal Circuit Court in Texas in late 2006.

Outlook for the Full Year 2007

For the full year 2007, Stratagene’s financial goals include:

* Revenue growth in the low single digits from its core research and clinical diagnostics businesses

* Gross margin in the range of 62% to 64% of total revenues.

* Research and development expenses in the range of 13% to 15% of revenues.

* Non-GAAP earnings per share to grow at a rate higher than revenues

* Effective tax rate of 34%

* Fully diluted share count of 22.6 million.

Conference Call Today

Stratagene will host a conference call and webcast today, Tuesday, March 6, 2007, at 4:30 p.m. Eastern Time to discuss the Company’s fourth quarter 2006 results, outlook for 2007, and current corporate developments. The dial-in number for the conference call is 800-257-2182 for domestic participants and 303-262-2138 for international participants.

A taped replay of the conference call will also be available beginning approximately one hour after the call’s conclusion and will remain available for seven days. It can be accessed by dialing 800-405-2236 for domestic callers and 303-590-3000 for international callers, using the passcode 11085628#. To access the live webcast of the call, go to Stratagene’s website at http://www.stratagene.com and click on the Investors icon. An archived webcast will also be available at http://www.stratagene.com.

About Stratagene Corporation

Stratagene is a developer, manufacturer and marketer of specialized life science research and diagnostic products. The Company's life science research unit supports advances in science by inventing, manufacturing and distributing products that simplify, accelerate and improve research. These products are used throughout the academic, industrial and government research sectors in fields spanning molecular biology, genomics, proteomics, drug discovery and toxicology. The Company's diagnostic unit develops and manufactures products for urinalysis as well as high quality automated instrument and reagent systems that use blood samples to test for more than 1,000 different allergies and autoimmune disorders. In addition, by combining its expertise in diagnostics and molecular biology, as well as its experience with FDA regulatory procedures, the Company is pursuing opportunities to expand its product portfolio to include molecular diagnostic kits and instrumentation. More information is available at www.stratagene.com.