Advanced Tissue Sciences Terminates Biozhem Contract.

Business Editors & Health/Medical Writers

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SAN DIEGO--(BUSINESS WIRE)--Feb. 3, 2003

Advanced Tissue Sciences, Inc. (OTC BB: ATISQ) today announced that it has terminated its license and supply agreement with Biozhem Cosmeceuticals, Inc. related to NouriCel.

The contract, which entitled Biozhem to use NouriCel in skin care products in the direct response market, was terminated due to Biozhem's default on certain obligations, including failure to pay minimum royalties and a $1 million milestone due to Advanced Tissue Sciences on Nov. 30, 2002. Biozhem owes the company a total of about $2.5 million.

On Jan. 6, 2003, the company announced it had entered into an agreement to sell its NouriCel product line and related intellectual property to SkinMedica, Inc., subject to the approval of the bankruptcy court, satisfactory due diligence review by SkinMedica as well as standard closing conditions.

Advanced Tissue Sciences plans to file its formal plan of reorganization within the exclusivity period which ends Friday, February 7, 2003.

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 approval of the proposed sale of the company's NouriCel product to SkinMedica, the due diligence review by SkinMedica, the ability of the company to achieve other closing conditions of the contemplated transaction, the company's ability to effect an orderly wind down of its operations, the timing of the receipt of milestone or other payments, 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.