ART Announces Fourth Quarter And Year End 2005 Financial Results

Company continues to gain market share with significant increase in revenues

Montreal, Canada, March 10, 2006 - ART Advanced Research Technologies Inc. (“ART”) (TSX: ARA), a Canadian medical device company and a leader in optical molecular imaging products for the healthcare and pharmaceutical industries, today announces its financial results for the fourth quarter and year ended December 31, 2005. All dollar amounts referenced herein are in US dollars, unless otherwise stated.

ART reported sales of $1,239,700 for the three-month period ended December 31, 2005, up by 107% from $599,000 for the same quarter a year ago. Total revenues for the year ended December 31, 2005 were $4,125,550 compared with $1,935,000 for 2004, an increase of 113%. The Company posted a net loss of $3,313,319 ($0.08 per share) for the 2005 fourth quarter, compared to $2,714,207 ($0.06 per share) for the corresponding 2004 period. The net loss for the year ended December 31, 2005 totaled $13,129,184 or ($0.31 per share), compared with a net loss of $9,928,603 or ($0.24 per share) in 2004.

Financial Highlights (in US dollars)

For the three-month period ended December 31, 2005 sales were $1,239,700, up by 107% from $599,000 for the same quarter a year ago. No maintenance sales were recorded during the 2005 fourth quarter and during the corresponding quarter in 2004. For the year ended December 31, 2005 revenues were $4,125,550, compared to $1,935,000 for the year ended December 31, 2004. Products sales for the year ended December 31, 2005 amounted to $3,626,100 compared to $1,935,000 a year ago. Maintenance sales totaled $499,450 compared to nil in the year ended December 31, 2004. The increase in revenues comes from an increase in the Company’s eXplore Optix product and maintenance sales as the Company pursued its market penetration in preclinical optical imaging. During the year ended December 31, 2005, the Company sold 19 eXplore units, including 1 demo unit, as compared to 11 units and no demo units in 2004.

The following information provides a discussion and analysis on the expenses for the 2005 fourth quarter and the year ended December 31, 2005 compared to the same periods of 2004. The majority of these expenses, which include the cost of sales and operating expenses, are incurred in Canadian dollars. Following a rapid appreciation of the Canadian currency over the US, non-favorable variances were created for these expenses in the current periods compared to same periods of last year.

Cost of sales for the 2005 fourth quarter was $816,949 compared to $306,625 in the fourth quarter of 2004. The gross margin for the quarter ended December 31, 2005 was 34% compared to 49% for the same quarter a year ago. For the year ended December 31, 2005, the total cost of sales was $2,789,585 compared to $915,087 in the year ended December 31, 2004. As a result, ART generated a combined gross margin of 32% during the year ended December 31, 2005, and 53% last year. The combined gross margin decrease during the 2005 fourth quarter and year ended December 31, 2005 compared to last year was due to: 1) the fact that ART transitioned to the new multiwavelength base system which is a more costly system and offered the possibility to its existing customers to upgrade their base system to the new system at a preferential price; and 2) the rapid appreciation of the Canadian currency over the U.S. During the year ended December 31, 2005, ART generated a gross margin of 34% from the sales of its products and a gross margin of 18% from sales resulting from maintenance. Cost of sales consisted principally of raw materials, royalties and manufacturing costs.

The Company’s research and development (“R&D”) expenditures for the three-month period ended December 31, 2005, net of investment tax credits amounted to $2,216,146, compared to $2,007,223 for the same period a year ago. The Company’s research and development (“R&D”) expenditures for the year ended December 31, 2005, net of investment tax credits amounted to $9,154,960, compared to $7,511,485 for the year ended December 31, 2004. The R&D expenditures consist principally of the salaries and benefits for personnel involved in R&D projects, of consultation fees paid for clinical studies, the cost associated with the preparation and conduct of the clinical studies and of the cost of prototypes. The increase in R&D expenditures for the 2005 quarter and the year ended December 31, 2005 compared to last year relates to the medical sector and is mainly due to the cost associated with the preparation and conduct of the clinical studies, which include the manufacturing of the SoftScan clinical prototypes, the negotiation of the protocols with the selected sites and the cost related to site selection both in Canada and in the US. During the year ended December 31, 2005, the manufacturing costs to build the SoftScan clinical prototypes were $1,369,309. The Company also made the decision to build three additional SoftScan prototypes in the event that more sites would be needed to execute the clinical plan.

Selling, general, and administrative (“SG&A”) expenses for the 2005 fourth quarter, totaled $971,405, compared to $960,873 for the same quarter a year ago. SG&A expenses for the year ended December 31, 2005, totaled $3,918,236, compared to $3,474,446 for the year ended December 31, 2004. SG&A expenses consist principally of salaries, professional fees and other costs associated with marketing activities. SG&A expenses were engaged to support commercial activities related to the eXplore Optix product as well as support its overall activities.

The loss before interest and foreign exchange loss for the 2005 fourth quarter was $2,834,299 compared to $2,732,527 for the same quarter a year ago. For the 2005 fiscal year, the loss before interest and foreign exchange loss was $12,023,037 compared to $10,215,645 a year ago.

As a result, the net loss for the three-month period ended December 31, 2005 was $3,313,319 or $0.08 per share, compared to $2,714,207 or $0.06 per share for the three-month period ended December 31, 2004. Net loss for the year ended December 31, 2005 was $13,129,184 or $0.31 per share, compared to $9,928,603 or $0.24 per share for the year ended December 31, 2004.

The financial statements, accompanying notes to the financial statements, and Management’s Discussion and Analysis for three-month period ended December 31, 2005, will be available online at www.sedar.com or at www.art.ca. Summary financial tables are provided below.

Conference Call

ART will host a conference call today at 8:30 AM (EDT). The telephone number to access the conference call is (866) 898-9626 (U.S. and Canada). Outside of North America, please dial (416) 340-2216. A replay of the call will be available until March 17, 2005. When dialing in for the replay from North America, please dial (800) 408-3053 or from outside of North America, please dial (416) 695-5800. The access code for the replay is 3176270.

A detailed list of the risks and uncertainties affecting the Company can be found in the Company’s Annual Report on Form 20-F.

About ART

ART Advanced Research Technologies Inc. is a leader in optical molecular imaging products for the healthcare and pharmaceutical industries. ART has developed two products based on its innovative technology. The first is eXplore Optix™, a molecular imaging device designed for monitoring physiological changes in living systems at the preclinical study phases of new drugs. eXplore Optix™ is distributed by GE Healthcare and is used by industry and academic leaders worldwide to bring new and better treatments to patients faster. The second is SoftScan®, a medical imaging device designed to improve the diagnosis and treatment of breast cancer. ART is commercializing its products in a global strategic alliance with GE Healthcare, a world leader in mammography and imaging. ART’s shares are listed on the TSX under the ticker symbol ARA.

This press release may contain forward-looking statements subject to risks and uncertainties that would cause actual events to differ materially from expectations. These risks and uncertainties are described in ART Advanced Research Technologies Inc.’s regulatory filings with Canadian Securities Commissions and with the Securities and Exchange Commission in the United States.

Contact Information

Sébastien Gignac

Vice President, Corporate Secretary and General Counsel

ART Advanced Research Technologies Inc.

Contact via E-mail