ArthroCare Expands Spinal Surgery Product Set; Company Introduces Four New Disposable Devices.

Business Editors/Health & Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--July 12, 2000

ArthroCare Corporation (Nasdaq:ARTC) today announced the introduction of four new disposable devices for spinal surgery.

The expanded product line, which now comprises six devices, improves the ease of use and functionality of ArthroCare's Coblation(R)-based spinal surgery system.

All four of the new disposable devices are designed to remove soft tissue, including disc and scar tissue, more aggressively than the initial disposable devices ArthroCare fielded for spinal surgery. In addition, all four of the new devices incorporate the company's proprietary suction functionality, which enhances a surgeon's visibility and control during surgical procedures. The new SpineVac(TM) and DisCoblator(TM) XL are designed for arthroscopic thoracic spinal indications while the Aggressor(TM) is a larger device designed for lumbar procedures. The VersaTor(TM) is a precise tissue-cutting tool with a longer shaft for improved access to the surgical area.

"Our early experience in the spinal surgery market is similar in some ways to our early experience in arthroscopy," said Michael A. Baker, ArthroCare's president and chief executive officer. "In arthroscopy, we started with three disposable devices and, based on feedback from surgeons, have aggressively expanded that product line to 24 devices. In spinal surgery we are responding quickly to feedback from spinal surgeons to extend and refine our disposable device offerings. We believe our clinical reputation and rapid responsiveness to customers will serve us as well in the spinal surgery market as it has in arthroscopy."

Lower back pain is the most common reason for disability for people under age 50 and is the second leading cause of employee absenteeism. Back pain is the number one cause of U.S. healthcare expenditures, afflicting an estimated 9 million Americans annually. Chronic back pain is estimated to cost the nation more than $50 billion per year in direct and indirect medical expenses.

ArthroCare's spinal surgery system, based on the company's patented Coblation(R)-technology, is currently being used in open surgical procedures in the spine. The company intends to develop an array of both open and minimally invasive surgical alternatives for treating both discogenic and mechanical back pain due to nerve compression.

ArthroCare's products allow surgeons to operate with a high level of precision and control, limiting damage to surrounding tissue and thereby potentially reducing pain and speeding recovery for the patient. The company's products operate at lower temperatures than traditional electrosurgical or laser surgery tools and enable surgeons to remove, shrink or sculpt soft tissue and to seal bleeding vessels.

ArthroCare is a medical device company that develops, manufactures and markets products based on its patented Coblation technology. ArthroCare's soft-tissue surgery systems consist of a controller unit and an assortment of single-use disposable devices that are specialized for specific types of surgery. The company believes its Coblation technology can replace the multiple surgical tools traditionally used in soft-tissue surgery with one multi-purpose surgical system. Coblation technology is applicable across many soft-tissue surgical markets. The company's strategy includes applying its patented Coblation technology to a broad range of soft-tissue surgical markets, including arthroscopic surgery, cosmetic surgery, ear, nose and throat surgery, spinal surgery, neurosurgery, general surgery, and various cardiology applications. The company's web site is at www.arthrocare.com.

Except for historical information, this press release includes forward-looking statements including, but not limited to, success of certain product lines and strategies, the strength of the company's market position, the strength of the company's clinical reputation, and other statements that involve risks and uncertainties. These risks and uncertainties are detailed from time to time in the company's Securities and Exchange Commission filings, including ArthroCare's Form 10-K for the year ended January 1, 2000 and Form 10-Q for the quarter ended April 1, 2000. Forward-looking statements are indicated by words or phrases such as "anticipates," "estimates," "projects," "believes," "intends," "expects," and similar words and phrases. Actual results may differ materially from management expectations.