CardioVascular Dynamics Signs Letter of Intent to Sell Its Vascular Access Business Unit to Escalon Medical Corporation.

IRVINE, Calif.--(BW HealthWire)--Oct. 22, 1998--CardioVascular Dynamics Inc. (Nasdaq: CCVD) (CVD) and Escalon Medical Corp. (Nasdaq: ESMC) Thursday announced they have entered into a letter of intent whereby CVD will sell the assets and operations of its Vascular Access Business Unit to Escalon.

Under the terms of the agreement, CVD will receive an initial payment, a payment upon the transferring of the assets and technology, and royalties on sales for a period of five years. The sale is subject to various conditions including the negotiation and execution of a definitive sale agreement. Subject to such conditions, CVD and Escalon anticipate closing the transaction in the fourth quarter of 1998. Further terms were not disclosed.

Commenting on the transaction, Jeffrey O'Donnell, CVD president and chief executive officer said, "Our goal is to focus CVD like a bullet in flight. With the divestiture of our Vascular Access Unit and the potential acquisition of Radiance Medical Systems Inc., CVD will be better poised to focus all of its efforts and resources to bringing its proprietary technologies to the interventional cardiology market."

Escalon Chairman and Chief Executive Officer, Richard J. DePiano said, "The acquisition of CVD's Vascular Access Business allows us to diversify our target markets and demonstrates Escalon's strategy of investing in profitable niche products and markets where the company can become a market leader. The business will be folded into our FDA-approved manufacturing plant in Wisconsin and will utilize excess capacity at this facility, while the products will continue to be sold through existing distributors. We look forward to completing the transaction and believe it will create value for both parties."

CVD acquired the vascular access technology in a license agreement with Advance Cardiovascular Systems Inc. in March 1996. Vascular Access technology involves the use of a tiny doppler ultrasound circuit placed at the tip of a specially-designed vascular access needle on a catheter. When placed in proximity to the vascular system, Vascular Access devices can help the physician locate the blood vessel, determine whether the vessel is an artery or vein, and provide access to the intended vascular site. Once in position within the vessel, the physician can begin the planned treatment via the conduit created by the Vascular Access device. During the past two years, CVD engineers have miniaturized this doppler chip technology to less then 10 thousands of an inch (0.010 inch). This small size is required to locate the tiny arteries and veins of small infants.

Founded in 1987, Escalon develops, markets and distributes ophthalmic surgical and pharmaceutical products which provide a base of positive cash flow to fund a targeted research and development effort. The company utilizes strategic partnerships to help finance its development programs and is also seeking acquisitions to further diversify its product line to achieve critical mass in sales and take better advantage of the company's distribution capabilities. Escalon has headquarters in Wayne, Pa. and manufacturing operations near Milwaukee, Wis.

CVD develops peripheral and coronary stents, coronary stent delivery systems, balloon dilatation catheters for coronary and peripheral vascular use, and site-specific drug delivery catheters for the delivery of radiation to prevent reoccurrence following the interventional treatment of atherosclerosis.

Except for historical information contained herein, this news release contains forward looking statements, the accuracy of which are necessarily subject to risks and uncertainties. Actual results may be affected by, among other things, risks and uncertainties related to the negotiation and execution of acquisition documents, the failure to obtain requisite approval, new product development and introduction cycles, research and development activities, including failure to demonstrate clinical efficacy, delays by regulatory authorities, scientific and technical advances by CVD or third parties, introduction of competitive products, third party reimbursement and physician training, and other risk factors and matters set forth in CVD's Annual Report on Form 10-K for the year ended Dec. 31, 1997 and the company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 and Escalon's Annual Report on Form 10-K for the fiscal year ended June 30, 1998 and Amendment No. 3 of the Registration Statement on Form 3 (Registration Statement No. 333-44513), which has been filed with the Securities and Exchange Commission.