BioSphere Medical Announces Preliminary Third Quarter Financial Estimates; Company Affirms its Positive Business Outlook.

Business Editors

ROCKLAND, Mass.--(BUSINESS WIRE)--Oct. 4, 2001

BioSphere Medical (Nasdaq: BSMD), a medical device company that is pioneering the use of bioengineered microspheres in embolotherapy, today announced that it anticipates total consolidated revenues for the third quarter of 2001 of approximately $2.0 million. This compares with $1.0 million in the third quarter of 2000. In the second quarter of 2001, total consolidated revenues were approximately $2.4 million, of which $2.2 million represented product revenues. The Company expects its third quarter loss per share to be in a range of $0.23 to $0.26, based on 12.62 million weighted average common shares outstanding.

"In the U.S., where we are focusing the majority of our product commercialization and market development efforts, our third quarter 2001 revenues more than tripled to greater than $1.4 million from $0.4 million in 2000," stated John Carnuccio, president and chief executive officer. "We achieved this increase in revenues notwithstanding a general reduction in embolotherapy procedures in the summer months and the cancellation of procedures and general business interruption following the unexpected tragic events of September 11, 2001. These attacks also adversely affected the number of orders we received at the end of the quarter, which historically comprise a significant percentage of revenues for the period. Despite these obstacles, our U.S. product revenues were substantially the same as in the second quarter of 2001, our strongest quarter to date."

"While these adverse factors had an effect on our sequential revenue growth from the second to third quarter of 2001, we are continuing to make great strides toward our goal of developing and capturing the dominant share of the growing embolotherapy market," Carnuccio said. "Several metrics indicate the continued growth of our business, including the addition of approximately 125 new accounts in the quarter and the second best repeat order rate for existing accounts in the month of September."

"This was accomplished with a relatively new field sales organization, half of which are new additions since May of this year. Also, until the business disruption from the attacks, the first week of September, driven by the launch of our new EmboGold(TM) Microspheres product line, was the second strongest sales week in our history and was in line with our expectations for achieving our revenue targets for the quarter. In addition, EmboGold(TM) Microspheres are premium priced, and have already contributed to an increased average selling price for our products."

Carnuccio further stated, "We believe that our business and targeted markets are fundamentally sound. We remain confident about our expectations for the long-term growth of the embolotherapy market, and we are pleased with the progress we made during the third quarter in capturing an increasing share of this market."

Biosphere Medical's third-quarter financial results are scheduled to be released on October 18, 2001 and the Company expects to give further guidance on its business outlook at that time. BioSphere will host a conference call on Thursday, October 18, 2001 at 11:00 a.m. Eastern time. Investors may access this call live at www.biospheremed.com.

About BioSphere Medical, Inc.

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

BioSphere Medical's lead product, Embosphere Microspheres, was cleared by the FDA in April 2000 for marketing for hypervascularized tumors and vascular malformations. The Company is currently conducting clinical trials of Embosphere Microspheres for uterine fibroid embolization (UFE) in the United States under an Investigational Device Exemption (IDE) granted by the FDA. BioSphere Medical has received CE Mark approval in the European Community and approvals in Canada and Australia which allow the Company to sell Embosphere Microspheres for use in general embolization procedures, including uterine fibroid embolization.

Cautionary Statement Regarding Forward-Looking Statements - This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The Company's words such as "expects," "plans," "seeks," "projects," "believes," "may," "anticipates," "estimates," and similar expressions identify these forward-looking statements. These statements are subject to risks and uncertainties and are based upon the Company's beliefs and assumptions. These forward-looking statements include statements concerning the Company's expectations with respect to its financial results for the third quarter of 2001 and revenues for the fourth quarter of 2001. There are a number of important factors that may affect the Company's actual performance and results and the accuracy of its forward-looking statements, many of which are beyond the Company's control and are difficult to predict. These important factors include, without limitation, changes in the Company's financial results for the third quarter of 2001 that may arise during the closing of the Company's books and the Company's ability 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(R) Microspheres, EmboGold Microspheres and HepaSphere SAP(TM) Microsphere technologies for uterine fibroid embolization, targeted liver 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 to finance the development, marketing and sales of its products; general economic conditions; as well as those risk factors detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2000 filed by the Company with the Securities and Exchange Commission.