Advanced Neuromodulation Systems Announces 28-Day Extension by the FDA of Comment Period for IPG Reclassification Recommendation.

Business Editors & Health Writers

DALLAS--(BUSINESS WIRE)--Oct. 10, 2000

Advanced Neuromodulation Systems Inc. (ANS) (Nasdaq:ANSI) today announced that the Food and Drug Administration has extended to Nov. 3, 2000, the public comment period for the notice of panel recommendation to reclassify the Totally Implanted Pulse Generator (IPG) Spinal Cord Stimulator for pain relief from a Class III Device to a Class II Device.

The FDA's decision to extend the comment period by 28 days followed a request for a 60-day extension by Medtronic Inc., ANS' sole competitor in the spinal cord stimulation market.

In its Oct. 3, 2000, written reply to Medtronic, the FDA noted, "You have had more than a year to consider your objections to the panel recommendation," and that Medtronic has already submitted detailed letter objections and made presentations to the FDA regarding its objections.

"Therefore, we believe that you have had adequate time to review and respond to the panel recommendation and that an extension of the comment period to November 3, 2000 is sufficient," the FDA wrote Medtronic.

Chris Chavez, president and chief executive officer of ANS, said: "We believe that the FDA's letter speaks for itself regarding Medtronic's efforts to delay the reclassification process for the Totally Implanted Spinal Cord Stimulator for pain relief. Today, Medtronic holds 100 percent market share of the IPG market for pain relief.

"We are encouraged that the FDA has granted only a minimal further delay in the process. We also are encouraged that in spite of Medtronic's efforts to delay the reclassification, the agency has already published its tentative finding in support of the panel's recommendation to reclassify the IPG from a Class III device to a Class II device.

"We will continue to work with the agency to expedite the submission and review of ANS' 510(k) Premarket Notification for our IPG. We are prepared to move forward quickly to achieve our goal of launching ANS' fully implantable IPG system for spinal cord stimulation (SCS) in the United States."

Following the public comment period and notice by the FDA of the final reclassification rule, Chavez said, two regulatory steps will remain to be completed prior to commercialization of ANS' IPG device in the United States: First, ANS must submit a 510(k) Premarket Notification to the FDA; and second, ANS must receive a clearance order from the FDA. He said that a ruling by the FDA on a 510(k) submission typically can be expected within 90 to 120 days.

Chavez explained that the spinal cord stimulation (SCS) market for treating pain of the trunk and limbs, which is estimated by industry analysts to exceed $200 million annually, consists of two product categories -- radio-frequency (RF) stimulation systems and IPG stimulation systems.

"ANS is the technology leader of the $45 million RF segment with a 50 percent market share. Our advanced 16-channel, multiple-electrode, computer-programmable RF systems have become the product of choice to treat complex, bilateral, multifocal pain patterns that consume high levels of battery power," he said.

The CEO added: "The market for IPGs, which are fully implantable devices used predominantly for simple, unilateral pain patterns that do not require high energy levels to treat, currently exceeds $150 million and is growing 30 percent annually.

"This is an exciting growth opportunity for ANS. Based on our success in the RF segment, and recognizing that the very same pain practitioners to whom we now sell our RF products also routinely implant IPG devices, we are confident that ANS will successfully commercialize our IPG once regulatory clearance is achieved."

The complete texts of the public requests for extension and the FDA's response soon will be available at www.fda.gov/ohrms/dockets/default.htm.

About Advanced Neuromodulation Systems

Advanced Neuromodulation Systems designs, develops, manufactures and markets implantable systems used to manage chronic intractable pain and other disorders of the central nervous system.

The following is a "safe-harbor" statement under the Private Securities Litigation Reform Act of 1995: Statements contained in this document that are not based on historical facts are "forward-looking statements." Terms such as "plan," "should," "would," "anticipate," "believe," "intend," "estimate," "expect," "predict," "scheduled," "new market," "potential market applications" and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: completion of research and development projects in an efficient and timely manner; obtaining regulatory approvals on a timely and cost-efficient basis to permit the introduction of new products; the successful reclassification of the IPG by the FDA; the satisfactory completion of clinical trials and/or market tests prior to the introduction of new products; the adequacy, acceptability and timeliness of component supply; the approval of new products by reimbursement agencies like insurance companies, HMOs, Medicare and Medicaid; the efficacy of the company's products for new applications; and other risks detailed from time to time in the company's Securities and Exchange Commission filings. Consequently, if such management assumptions prove to be incorrect or such risks or uncertainties materialize, anticipated results could differ materially from those forecast in forward-looking statements.