ArthroCare Introduces Laparoscopic and General Surgery Product Set; Third Quarter Results Meet Expectations.

Business Editors/Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--Oct. 8, 2001

ArthroCare Corp. (Nasdaq:ARTC) today announced that the company has established a new division, ArthroCare ENDO, to develop and market products for the general surgery and laparoscopic surgery markets. ArthroCare ENDO is introducing a new line of disposable surgical devices designed specifically for urology and for open and laparoscopic approaches to gynecology and general surgery at the American College of Surgeons (ACS) meeting in New Orleans, which began yesterday.

The five new devices, based on the company's patented Coblation(R) technology, are compatible with ArthroCare's installed base of more than 12,000 controllers. ArthroCare ENDO's products are CE marked and are currently being marketed in the United States under Food and Drug Administration (FDA) 510(k) general clearances for general surgery and urology indications. The company is seeking additional 510(k) clearances to promote the products specifically for laparoscopic and gynecological surgery.

The company believes that Coblation technology can potentially add value to a large number of commonly performed procedures in these markets. The company believes the number of potential procedures for the ENDO division products exceeds 5 million in the United States alone. Products for the new ArthroCare ENDO business initially will be distributed worldwide by a select network of distributors, supported by ArthroCare's national and regional sales managers.

"In the last two years, we have made enormous technical advances in the development of Coblation-based devices for a variety of demanding surgical procedures, such as Coblation-assisted tonsillectomies (CAT) and neurosurgery," said Michael A. Baker, ArthroCare's president and chief executive officer. "These advances have positioned us to field an exciting product set for laparoscopic and general surgery. Our early human and clinical experience indicates that Coblation technology has the potential to outperform the premier technologies currently being used in these surgeries."

ArthroCare also said today that preliminary results for the third fiscal quarter, ended Sept. 29, 2001, indicate the company will report product sales, revenue and earnings within the range of published analyst expectations. Full results for the third quarter are tentatively scheduled for release during the last week of October.

ABOUT ARTHROCARE

ArthroCare's products allow surgeons to operate with a high level of precision and control, limiting damage to surrounding tissue. The company's products operate at lower temperatures than traditional electrosurgical or laser surgery tools and enable surgeons to remove, thermally modify, 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 website is www.arthrocare.com.

SAFE HARBOR STATEMENTS

Except for historical information, this press release includes forward-looking statements. These statements include, but are not limited to the company's belief in the success of novel surgical procedures, the company's belief that certain surgical products and procedures will enhance achievement of the company's long term potential, the possibility of market penetration in certain markets, the continued rate of growth of certain products sets, future regulatory clearances and other statements that involve risks and uncertainties. These risks and uncertainties include, but are not limited to the uncertainty of success of the company's non-arthroscopic products, competitive risk, and the uncertainty of protecting the company's patent position. These and other 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 Dec. 30, 2000 and the Form 10-Q for the quarter ended June 30, 2001. 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 plans.