Advanced Tissue Sciences Announces Regulatory Submission for Human-Based Collagen; Provides Update On Other Business Developments.

Business Editors & Health/Medical Writers

BIOWIRE2K

Advanced Tissue Sciences, Inc. (NASDAQ: ATIS) today announced that its alliance partner, Inamed Corporation, (NASDAQ: IMDC) has submitted a premarket approval (PMA) supplement for human-based collagen to the U.S. Food and Drug Administration (FDA).

If approved by the FDA, Advanced Tissue Sciences would provide its human-based collagen to Inamed for marketing as a dermal filler for wrinkles and lip augmentation.

The submission follows clinical screening to determine if human-based collagen may be used without first requiring a skin test for allergic sensitivities. It has been generally reported that the waiting period associated with the skin test requirement causes as many as half of patients scheduled for bovine-based collagen treatments not to return for their scheduled procedure.

Inamed has said they hope to receive approval to market this human-based dermal filler as early as the end of this year.

"We are gratified that Inamed has moved forward so quickly with the regulatory submission," said Arthur J. Benvenuto, chairman, president and CEO of Advanced Tissue Sciences. "Commercializing collagen for aesthetic use is a key part of our strategy, and this submission represents an important step toward realizing our goal of reaching profitability."

Benvenuto pointed out that the company is making progress on other key milestones. Following is an update on key product developments, organized by business unit.

BioNuvia, Inc.

On June 20, 2002, Biozhem Cosmeceuticals, Inc., which markets products containing NouriCel(TM) under the RevitaCel brand, announced that Thane International, Inc. intends to move forward with the RevitaCel campaign as a result of conducting successful tests of the Biozhem RevitaCel infomercial. As previously reported, Thane has contracted with Biozhem to finance and manage all aspects of Biozhem's RevitaCel System domestic direct response and international campaign, including media buying, marketing and inventory funding, operations and fulfillment management.

Under the terms of the agreement, Thane had a 30-day period to test the infomercial prior to financing further activities. Now that the test period has been successfully completed, Thane has made an additional economic commitment to Biozhem's RevitaCel project. The recent announcement affirms Thane's continued involvement.

"We believe that Thane's resources and experience in the direct response market will help drive demand and maximize the sales potential of the RevitaCel System," said Kerry Vail, ATIS vice president and general manager of BioNuvia.

Wound Care

Dermagraft(R) Reimbursement

The company's strategic partner, Smith & Nephew, plc, is working to secure Medicare and Medicaid reimbursement for the use of Dermagraft in treating patients with diabetic foot ulcers and has reported that they are on plan toward the goal of having guidelines published in all the states. The pass-through payment code for Medicare patients in an outpatient setting became effective on April 1, 2002.

"The number of states establishing reimbursement guidelines and the number of covered patients are growing," said Benvenuto. "However in consultation with Smith & Nephew, we have chosen for now not to make announcements as individual states publish guidelines, in order not to do anything that might hinder the process."

Dermagraft for Venous Leg Ulcers

The pivotal clinical trial for use of Dermagraft in treating venous leg ulcers is underway and is being managed by Smith & Nephew. Most of the clinical sites are in the United Kingdom. However there are also clinical centers in Canada and the United States. Patients are being treated and patient enrollment continues.

Other Near-Term Opportunities

The company currently plans to begin, this summer, the pivotal clinical trial for use of the company's dermal fibroblast technology as a substitute for a soft tissue graft during periodontal surgery, pending receipt of the go-ahead from the FDA.

Corrective periodontal surgery with a soft tissue graft is frequently required in patients whose gums recede and expose the tooth root. During this procedure, a donor graft (autograft) is harvested from the patient's own palatal tissue. This graft is placed over the exposed root and covered by a flap of gingival tissue, thereby preventing further recession and maintaining the health of the tooth. According to the American Dental Association, approximately 500,000 periodontal soft tissue grafts are performed annually in the U.S. "We believe that there is an exciting potential market opportunity to use our technology in this type of oral surgery," said Benvenuto.

Longer-Term Opportunities

Still another potential longer-term use for the company's dermal fibroblast technology is in treating damaged hearts. In previous animal trials, the technology has shown the ability to stimulate growth of new blood vessels in damaged heart tissue. Advanced Tissue Sciences has branded this product Anginera(TM) and plans to begin the pivotal animal trial for this application in the near future.

Background Information

Advanced Tissue Sciences is redefining tissue repair and transplantation with human-based products developed and derived from its patented tissue-engineering technology.

The company's efforts are concentrated in four therapeutic areas: wound care; aesthetic and reconstructive; cardiovascular; and orthopedic. Three products are currently on the market: TransCyte, a temporary covering for second- and third-degree burns; Dermagraft, for the treatment of diabetic foot ulcers; and NouriCel for skincare and other aesthetic applications. A strategic partner, Inamed Corporation, is pursuing approval of the company's tissue-engineered, human-based collagen for wrinkle injections. Other products are in clinical or preclinical trials.

The company has developed strategic alliances designed to unlock longer-term product opportunities. These include two joint ventures with Smith & Nephew, a strategic alliance with Inamed and a collaboration with Medtronic, Inc. More information on Advanced Tissue Sciences is available at www.advancedtissue.com.

Statements in this press release that are not strictly historical may be "forward-looking" statements, which involve risks and uncertainties. Risks and uncertainties exist in the company's operations, including, without limitation, uncertainties related to clinical trials, the ability to obtain the appropriate regulatory approvals, the ability to obtain additional milestones and financing to continue operations when needed, a history of operating losses and accumulated deficits, the timing of product launches, product opportunities, volatility of the company's stock price, the company's reliance on collaborative relationships, market acceptance of products, the company's ability to obtain and retain patent protection, as well as other risks detailed from time to time in publicly available filings with the Securities and Exchange Commission including, without limitation, Advanced Tissue Sciences' annual report on Form 10-K for the year ended December 31, 2001 and the company's quarterly report on Form 10-Q for the quarter ended March 31, 2002. The company undertakes no obligation to release publicly the results of any revision to these forward-looking statements to reflect events or circumstances arising after the date hereof. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.