Advanced Tissue Sciences Provides Bankruptcy Update.

Business Editors and Health/Medical Writers

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LA JOLLA, Calif.--(BUSINESS WIRE)--Dec. 19, 2002

Advanced Tissue Sciences, Inc. (OTC BB: ATISQ) today provided an update on certain changes and its activities under its Chapter 11 reorganization.

As of Monday, December 23, 2002 the company's business address will change to 10520 Wateridge Circle Drive, San Diego, CA 92121. Smith & Nephew is taking over the facility in La Jolla previously occupied by Advanced Tissue Sciences. The company's remaining employees are moving to a facility that the company leased prior to its bankruptcy filing in October. The company will have seven remaining employees as of December 31, 2002. There will be no increase in lease expense as a result of the move.

The new general telephone number is now [phone]. The new telephone number for investor relations and news media inquiries, effective Friday, December 20, will be 619-795-2345.

The company also announced that its web site will be shut down permanently at 5:00 p.m. Pacific time today. The site is no longer an accurate portrayal of Advanced Tissue Sciences and the status of the company does not warrant the cost of updating the site and its contents.

The company continues to target early 2003 for the submission of its formal plan of reorganization. However, consistent with the decision to liquidate assets, the company has begun actively marketing its remaining assets. Eureka Capital Markets, LLC, the company's financial and liquidation advisors, are actively involved in the marketing of those assets.

Eureka has prepared several detailed "product profiles" for company product lines. Those profiles have been circulated to parties with potential interest and are serving as the basis for ongoing negotiations. The company will announce material transactions when deals are actually complete. Any material transactions must be approved by the Bankruptcy Court before they can be consummated. The company does not intend to make announcements or other comments about offers and negotiations while they are ongoing.

Those interested in purchasing assets should contact George Kidd, Managing Director, Eureka Capital Markets, at [phone].

The company also has retained a real estate broker who is assisting in locating a potential assignee or sublessee for the lease on the facility on Wateridge Circle Drive. The present lease is supported by a letter of credit that the company was forced to secure by posting approximately $1.7 million in cash. Any assumption and assignment of the lease, as well as any rejection of the lease, must be approved by the Bankruptcy Court.

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 decision to liquidate including, without limitation, uncertainties related to the company's ability to effect an orderly wind down of its operations, the retention of the necessary personnel, the company's ability to formulate a plan of liquidation, the possible amendment, delay in implementation or termination of any proposed plan of liquidation, the ability of the company to find a buyer or buyers for its assets, the amounts to be realized in connection with the proposed sale of the company's assets, approval by the bankruptcy court of the company's proposed plan of liquidation when formulated, the timing and amount of payments, if any, to security holders under the proposed plan of liquidation, the quotation of the company's shares on the OTC Bulletin Board, a history of operating losses and accumulated deficits, potential write-offs and other charges, 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 reports on Form 10-Q for the quarters ended March 31, 2002, June 30, 2002 and September 30, 2002. The company undertakes no obligation to release publicly the results of any revisions 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.