Advanced Neuromodulation Systems Announces Supply and Development Agreement for Batteries; ANS to File Application to Market Rechargeable IPG.

Business Editors/Health/Medical Writers

DALLAS--(BUSINESS WIRE)--April 7, 2004

Advanced Neuromodulation Systems, Inc. (ANS) (Nasdaq:ANSI) today announced a long-term supply agreement with EaglePicher Technologies, LLC under which EaglePicher will supply ANS with rechargeable lithium ion batteries, as well as the lithium thionyl chloride batteries ANS uses today in its Genesis(R) and Genesis XP(TM) Totally Implantable Pulse Generator (IPG) Spinal Cord Stimulators. Under the agreement, EaglePicher will also continue to develop certain future generation batteries for ANS. Specific terms of the agreement were not disclosed.

ANS simultaneously announced that it will file for approval of its first generation rechargeable IPG with the FDA this quarter. "We hope to receive approval to market this new product in the United States later this year," said Chris Chavez, President and Chief Executive Officer of Advanced Neuromodulation Systems, Inc.

The supply and development agreement assures ANS a reliable source and predictable pricing for batteries used in its Genesis(R) and Genesis XP(TM) IPGs, as well as the rechargeable batteries to be used in its new family of rechargeable IPGs. This agreement strengthens an earlier agreement between the two companies, and enables both companies to leverage their respective technology strengths to develop new products that are clinically compelling.

"ANS has built its reputation on technology innovation and designing advanced neuromodulation devices that address a diverse set of clinician and patient needs," said Mr. Chavez. "No single system or solution is optimal for addressing the broad range of our customer's diverse needs. A rechargeable IPG will add another important product to our growing family of neuromodulation products. This supports our strategy of offering our customers the opportunity to select the right systems solution for each unique clinical need. We believe that clinicians will continue to need both radio-frequency (RF) powered SCS and nonrechargeable IPG products for most applications.

"We have worked with EaglePicher for the last five years under a prior supply and development agreement, through which EaglePicher demonstrated its commitment to developing and building high quality and reliable batteries for use in medical applications. We look forward to continuing our relationship with EaglePicher to develop advanced technology implantable devices," Mr. Chavez added.

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. Forbes magazine recently recognized ANS as one of America's 200 Best Small Companies and Fortune magazine recently recognized ANS as one of Fortune's Top 100 Fastest-Growing Small Companies in the United States. Frost & Sullivan, an international strategic market research firm, also recently presented ANS with its Product Innovation Award, recognizing ANS as the technology innovation leader in the neurostimulation market and ANS' Genesis(R) Implantable Pulse Generator system as the most advanced fully implantable spinal cord stimulator on the market. Additional information is available at www.ans-medical.com.

"Safe harbor" statement under the Private Securities Litigation Reform Act of 1995:

Statements contained in this document related to ANS 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: continued market acceptance of the Genesis(R) IPG and GenesisXP(TM) IPG; competition from Medtronic, Inc. and future competitors; continued market acceptance of our Renew(R) system following the launches of the Genesis IPG and GenesisXP IPG; patient or physician selection of less invasive or less expensive alternatives; adverse changes in coverage or reimbursement amounts by Medicare, Medicaid, private insurers, managed care organizations or workers' comp programs; intellectual property protection and potential infringement issues; obtaining necessary government approvals for our rechargeable IPGs and other new products or applications and maintaining compliance with FDA product and manufacturing requirements; product liability; reliance on single suppliers for certain components; completion of research and development projects in an efficient and timely manner; the satisfactory completion of clinical trials and/or market tests prior to the introduction of new products; successful integration of acquired businesses, products and technologies; international trade risks; and other risks detailed from time to time in the Company's SEC 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. Such forward-looking statements speak only as of the date on which they are made and the company does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.