BioSphere Medical, Inc. Reports First-Quarter Financial Results and Growth Strategy Milestones.

Business/Technology Editors

ROCKLAND, Mass.--(BUSINESS WIRE)--April 27, 2000

Separately Announces Receipt of 510(k) Clearance from U.S. Food and

Drug Administration

BioSphere Medical, Inc. (Nasdaq:BSMD), a medical device company that is pioneering the use of bioengineered microspheres to treat tumors and vascular malformations by occluding their blood supply, today announced its financial results for the first quarter ended March 31, 2000.

"We made excellent progress this quarter toward reaching our goal of globally commercializing our proprietary lead product, Embosphere Microspheres," said John Carnuccio, BioSphere Medical's president and chief executive officer. "We are also extremely pleased to announce that we have received 510(k) clearance from the U.S. Food and Drug Administration for use of Embosphere Microspheres in the United States. We believe that our recent successes internationally and in the U.S. demonstrate that Embosphere Microspheres is a superior product in a rapidly growing global market."

For the first quarter of 2000, BioSphere Medical reported revenues from continuing operations of $774,000, compared with revenues of $280,000 in the corresponding period last year. For the first quarter of 2000, BioSphere Medical reported a net loss from continuing operations of $1,476,000, or $0.16 per share, with approximately 9.2 million weighted average shares outstanding. This compares with a net loss from continuing operations of $539,000, or $0.7 per share, in the first quarter of 1999 with approximately 8.5 million weighted average shares outstanding.

First-quarter International Highlights

"With regulatory approvals and distribution channels in place in Canada and Australia, we launched Embosphere Microspheres into the market for general embolotherapy in those countries during the first quarter, providing physicians and their patients with a superior product for a wide range of embolotherapy procedures," Carnuccio said. Embosphere Microspheres received similar regulatory approval from the European Union in 1997.

Looking to build on expanding demand in Europe, during the first quarter the Company executed its option to acquire an additional 34.5 percent of France-based BioSphere Medical. "In addition, we conducted clinical procedures in the U.K. that successfully demonstrated the use of Embosphere Microspheres for treating uterine fibroids, and began an embolotherapy training program for key European interventional radiologists," Carnuccio said.

"Patients around the world are becoming increasingly aware of the benefits of embolotherapy for treatment of uterine fibroids, and the number of referring physicians is growing rapidly as they learn about the high success rates and minimal complications associated with use of Embosphere Microspheres," Carnuccio said. "As a result, interventional radiologists in the U.S., Europe, Canada and Australia are demonstrating growing interest in embolotherapy, and as this interest expands to other areas around the globe, BioSphere Medical is positioned to capture a significant share of this and other emerging high-volume embolization markets."

Among these emerging markets is embolotherapy for liver cancer. In the first quarter, the Company obtained an exclusive license for Hepasphere(TM) SAP Microspheres. This product is used for targeted liver embolization (T-LE), a technique for the occlusion of the blood vessels that feed hepatic tumors in liver cancer, which cause an estimated 1.2 million deaths in the world each year. We are initiating regulatory process for Hepasphere SAP Microspheres in Japan, followed by an application in the U.S. in the future. "The ability to further develop Hepasphere SAP Microspheres further demonstrates our commitment to advances in embolotherapy," Carnuccio said.

First-quarter U.S. Highlights

In the U.S., the Company filed a 510(k) application with the Food and Drug Administration (FDA) in 1999 for clearance for Embosphere Microspheres. Today, BioSphere Medical separately announced that it has received 510(k) clearance. "Our 510(k) clearance is a major milestone for the company, and a noteworthy event in the advancement of embolotherapy in the United States," Carnuccio said.

Looking beyond general embolization toward meeting growing interest in UAE among patients and physicians in the U.S., BioSphere Medical initiated clinical trials of Embosphere Microspheres for UAE treatment of uterine fibroids in January 2000 under an Investigational Device Exemption (IDE) granted by the FDA.

Uterine fibroids affect more than 25 million women in the U.S., and about six million of these women are symptomatic. Symptoms may include severe bleeding, pain and disfigurement. "We took significant strides toward realizing the tremendous potential for UAE to improve the safety and efficacy of treatment for uterine fibroids in this country by completing U.S. patient enrollment of the clinical trials for Embosphere Microspheres under the IDE during the first quarter," Carnuccio said. "We also completed a corporate relocation that nearly doubled our space, which will allow us to accommodate our growing staff and better support our sales, research and marketing efforts as interest in embolotherapy widens."

First-quarter Financial Highlights

"We also strengthened our financial capabilities during the first quarter by completing a $5.9 million private placement of common stock and warrants, and by re-listing BioSphere Medical's stock on the Nasdaq National Market," Carnuccio said. "The private placement has enhanced our liquidity and our ability to execute our strategy. Our position on the Nasdaq should enhance our visibility in the marketplace and expand our access to capital, both of which will be key to executing our commercialization strategy."

About BioSphere Medical

BioSphere Medical, Inc., based in Rockland, Massachusetts, is a medical device Company focused on embolotherapy, the treatment of tumors and vascular malformations by occluding blood flow. The Company is pioneering the use of patented and proprietary bioengineered microspheres as a new class of embolics.

This press release contains forward-looking statements that involve risks and uncertainties, including those relating to the future sale of the Company's products and the long-term growth of the Company. Among the important factors that could cause actual events to differ materially from those indicated by forward-looking statements in this release are the failure of the Company to achieve or maintain necessary regulatory approvals, either in the United States or internationally, with respect to the manufacture and sale of its products; to successfully develop and commercialize the Embosphere Microspheres technology for Uterine Artery Embolization and other applications; to provide patent and other proprietary protection for the Company's products; the absence of, or delays and cancellations of, product orders; the delay in the introduction of new products; competitive pressures; the inability of the Company to raise additional funds, if needed, to finance the development, marketing, and sales of its products; general economic conditions; as well as those risk factors detailed in the periodic reports filed by the Company with the Securities and Exchange Commission.

                        BIOSPHERE MEDICAL, INC.
            CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                   FOR THE THREE MONTH PERIODS ENDED
                        March 31, 2000 and 1999
                              (unaudited)

(In thousands, except per share amounts)

                                                    Three months ended
                                                         March 31,
                                                      2000       1999


Revenues                                           $   774    $   280

Costs and expenses
  Cost of sales                                        282        146
  Research & development                               549         17
  Selling, general and administrative                1,550        603
    Total costs and expenses                         2,381        766

    Loss from continuing operations                 (1,607)      (486)

Other income (expenses), net                           151        (21)
    Pretax loss from continuing operations          (1,456)      (507)

Income tax                                            --           18
    Loss before minority interest                   (1,456)      (525)
Minority interest                                      (20)       (14)
    Net loss from continuing operations             (1,476)      (539)

Loss from discontinued operations                     --         (436)

    Net Loss                                       $(1,476)   $  (975)


    Basic and diluted net loss per share
               from continuing operations          $ (0.16)   $ (0.07)
    Basic and diluted net loss per share
               from discontinued operations        $  --      $ (0.05)
    Basic and diluted net loss per share           $ (0.16)   $ (0.12)

    Weighted average number of
       common shares outstanding                     9,246      8,456

                        BIOSPHERE MEDICAL, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                               (unaudited)

(In thousands)

                                                   March 31, March 31,
                                                       2000      1999
ASSETS
     Cash and cash equivalents                      $ 9,892   $ 1,416
     Accounts receivable                                766      --
     Inventory                                          507      --
     Prepaid and other current assets                    61        27
     Net assets of discontinued operations             --      11,593
     Property, and equipment, net                       407        94
     Goodwill, net                                      694      --
     Other assets                                       647         8

        Total Assets                                $12,974   $13,138

LIABILITIES AND STOCKHOLDERS' EQUITY
     Accounts payable and accrued expenses          $ 2,429   $ 4,629
     Notes payable and long term debt                   147       390

        Total Liabilities                             2,576     5,019

     Minority interest                                  897       131

     Total stockholders' equity                       9,501     7,988


        Total liabilities and stockholders' equity  $12,974   $13,138