BioSphere Medical Reports Fourth Quarter and Fiscal Year 2002 Financial Results.

Business Editors/Health & Medical Writers

ROCKLAND, Mass.--(BUSINESS WIRE)--Jan. 30, 2003

BioSphere Medical, Inc.(Nasdaq:BSMD):

U.S. Clearance for Uterine Fibroids;

Annual Microsphere Revenue Up 48%; Net Loss Decreased 38%

BioSphere Medical, Inc. (Nasdaq: BSMD), a medical device company that is pioneering the use of bioengineered microspheres to treat uterine fibroids, hypervascularized tumors and vascular malformations by occluding their blood supply, today reported its financial results for the fourth quarter and fiscal year ended December 31, 2002.

Fiscal Year 2002 Highlights

- First and only company to receive 510(k) clearance for its product for use in uterine fibroid embolization (UFE)

- Worldwide microsphere revenue increased 48% in 2002 compared to the prior year

- Annual U.S. product revenue increased 44% compared to the prior year

- Annual European microsphere revenue increased 81% compared to the prior year

- Net loss in the fiscal year decreased to $6.38 million ($0.49 loss per basic and diluted share) compared to $10.35 million ($0.89 loss per basic and diluted share) in the prior year

- The Company launched a comprehensive marketing and education program targeted for UFE

- Product launches of EmboCath(TM) Catheter and Segway (TM)Guidewire delivery systems to complement Uterine Fibroid embolization

- Product launches of new sterile vial and pre-filled syringe featuring greater convenience and control

Review of Financial Results

For the fourth quarter of 2002, BioSphere Medical reported consolidated revenues of $3.05 million, an increase of approximately 12% compared with consolidated revenues of $2.73 million in the corresponding 2001 period. The company reported a consolidated net loss of $0.76 million, or ($0.06) per basic and diluted share, for the fourth quarter of 2002. This compares with a consolidated net loss of $2.49 million, or ($0.20) per basic and diluted share, for the fourth quarter of 2001.

For the twelve-month period ended December 31, 2002, BioSphere Medical reported consolidated revenues of $12.15 million, an increase of approximately 35% compared with consolidated revenues of $9.00 million in the corresponding prior year period. The company reported a consolidated net loss of $6.38 million, or ($0.49) per basic and diluted share, for the twelve months ended December 31, 2002. This compares with a consolidated net loss of $10.35 million, or ($0.89) per basic and diluted share, for the corresponding prior year period.

As of December 31, 2002, the Company had cash, cash equivalents and marketable securities of $14.7 million.

Management Comments on Progress

Commenting on the Company's results, Paul A. Looney, BioSphere Medical's Chairman, CEO and President stated, "During the fourth quarter, we achieved our most significant milestone in the development of the embolization procedure to date - the 510(k) clearance of our Embosphere(TM) Microspheres for uterine fibroid embolization. Being the first and only company to have this regulatory clearance provides us an opportunity to continue our brand name recognition and market leadership in an important part of women's healthcare."

Mr. Looney continued, "We expect revenue growth to come from expanding our core markets by increasing the number of procedures performed, developing new embolic and accessory products and packages, and adding new geographic territories. Our comprehensive marketing program is designed to increase patient and physician awareness of uterine fibroid embolization as an alternative to hysterectomy.

For 2003, the Company estimates an approximate 40% annual revenue growth rate in its core microsphere business with a potential second half upside from its recently launched UFE marketing program. The Company anticipates that its gross margin should remain in the low to mid-70 percent range.

The Company will host its quarterly conference call today at 11 a.m. EDT. The number to dial into the teleconference is [phone]. Please call in approximately ten minutes before the call is scheduled to begin. A live web cast of the conference call will also be available on the BioSphere Medical web site: www.biospheremed.com. A replay of the teleconference will be available from 2:30 p.m. (EDT), January 30, 2003 until 12:00 a.m. February 6, 2003. The dial-in number is: [phone], Access Code # 133332.

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 has received clearance in many countries, including the United States, Canada, Australia and the European Community, which allow the Company to sell its products 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, including statements with respect to the company's expectations that it will grow its revenue through market penetration and its sales and marketing strategies. The Company uses words such as "plans," "seeks," "projects," expects", "believes," "may," "anticipates," "estimates," "should'" and similar expressions to identify these forward-looking statements. These statements are subject to risks and uncertainties and are based upon the Company's beliefs and assumptions. 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, risks relating to: the failure of the Company and its distributors to successfully market and sell the company's products; 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; the failure of the Company to successfully develop, commercialize and achieve widespread market acceptance of the Embosphere(R) Microspheres and EmboGold(TM) Microsphere technologies for uterine fibroid embolization, targeted liver embolization and other applications; risks relating to the Company's ability to obtain and maintain patent and other proprietary protection for its products; the absence of or delays and cancellations of, product orders; delays, difficulties or unanticipated costs 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; and general economic conditions. These risk factors are further described in the section titled "Certain Factors That May Affect Future Operations" in the Company's Current report on Form 10-Q for the quarter ended September 30, 2002, as filed by the Company with the Securities and Exchange Commission. In addition, the forward-looking statements included in this press release represent the Company's expectations and beliefs as of the date of this release. The Company anticipates that subsequent events and developments may cause these expectations and beliefs to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation or intention to do so.

                       BIOSPHERE MEDICAL, INC.
                    SELECTED FINANCIAL INFORMATION

                CONDENSED CONSOLIDATED BALANCE SHEETS
                   As of December 31, 2002 and 2001
                            (in thousands)

                                             December 31, December 31,
                                                 2002          2001
ASSETS

   Cash, cash equivalents and marketable
    securities                             $     14,738   $    23,119
   Accounts receivable, net                       2,059         1,809
   Inventories, net                               3,179         1,111
   Due from related party                             -           276
   Prepaid and other current assets                 431           282
   Property and equipment, net                    1,692         1,570
   Goodwill, net                                  1,443         1,443
   Other assets                                     386           374

           Total assets                    $     23,928   $    29,984

LIABILITIES AND STOCKHOLDERS' EQUITY
   Accounts payable and accrued expenses   $      3,276   $     3,723
   Debt and capital lease obligations               393           388
   Stockholders' equity                          20,259        25,873

           Total liabilities and
            stockholders' equity           $     23,928   $    29,984




           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
   For the three months and years ended December 31, 2002 and 2001
               (in thousands, except per share amounts)


                                 Three Months Ended     Years Ended
                                    December 31,        December 31,
                                   2002     2001      2002      2001

REVENUES:
   Product revenue               $3,046  $ 2,725    $12,152  $  8,752
   Collaboration revenue              -        -          -       250
   Total revenues                 3,046    2,725     12,152     9,002

COSTS AND EXPENSES:
   Cost of product revenues         869      701      3,261     2,356
   Research and development         822    1,140      3,971     4,755
   Sales                          1,259    1,623      5,035     6,137
   Marketing                        638    1,052      3,024     3,305
   General and administrative       665      795      4,006     3,397

   Total costs and expenses       4,253    5,311     19,297    19,950

LOSS FROM OPERATIONS             (1,207)  (2,586)    (7,145)  (10,948)
   Other income and expenses, net   268      187        583       691

NET LOSS BEFORE INCOME TAXES       (939)  (2,399)    (6,562)  (10,257)
   Tax benefit (provision)          181      (88)       181       (88)
NET LOSS                          $(758) $(2,487)   $(6,381) $(10,345)


BASIC AND DILUTED
  NET LOSS PER SHARE             $(0.06) $ (0.20)   $ (0.49) $  (0.89)

Weighted average common shares
 outstanding
   Basic and diluted             13,116   12,721     12,988    11,642