Conceptus Announces Acquisition of Microgyn Manufacturing Rights.

SAN CARLOS, Calif.--(BW HealthWire)--Dec. 2, 1997--Conceptus Inc. (NASDAQ:CPTS) announced today that it has acquired the exclusive rights to manufacture its ERA(TM) and FUTURA(TM) Sheaths from Medical Scientific Inc. (MSI), a private manufacturing company located in Taunton, Mass.

In November 1996 Conceptus acquired Microgyn Inc., a private medical device company that had developed the technology utilized in the ERA and FUTURA Sheaths. Prior to its acquisition by Conceptus, Microgyn had entered into a manufacturing agreement with MSI which granted to MSI the exclusive rights to manufacture the ERA and FUTURA Sheaths for a specified period.

Over the next four months, Conceptus will transfer the manufacturing know-how related to the ERA and FUTURA Sheaths to its facility in San Carlos, Calif. Conceptus expects to be in full production in San Carlos by the end of the first quarter of 1998. During this transition period, Conceptus will also be developing and introducing new sheaths for use in both the gynecology and urology markets.

During the six-month period of transition it is expected that there will be incremental manufacturing expenses associated with the start-up of manufacturing of sheaths in Conceptus' San Carlos facility. Conceptus will also record a charge of $800,000 in the fourth quarter of 1997 to reflect the write-off of a loan that Conceptus made to MSI, which was a condition of the original manufacturing agreement.

"Acquiring the manufacturing rights to our sheaths greatly enhances our ability to be responsive to the market with new designs and an expanded product offering in electrosurgery," stated Kathryn Tunstall, president and chief executive officer of Conceptus Inc. "It will also enable Conceptus to benefit from any future manufacturing margin improvements in this product line," she added.

In September 1997 Conceptus introduced the ERA Sheath in the United States for therapeutic hysteroscopy, a rapidly growing alternative to the over 600,000 hysterectomies performed each year in the United States.

The company previously announced a distribution agreement with Imagyn Medical Technologies (NASDAQ:IMTI) (formerly Urohealth Inc.) for the FUTURA Sheath and specialty electrode designed for urology procedures such as Transuretheral Resection of the Prostate (TURP), the gold standard procedure for treating benign prostatic hyperplasia (BPH). Imagyn Medical Technologies is a major supplier to the urology market employing a direct U.S. salesforce.

Both the ERA and FUTURA sheaths enable physicians -- for the first time -- to use isotonic (physiologic) irrigating solutions with their existing electrosurgical equipment. This method significantly enhances the safety of resection procedures by eliminating the risk of dilutional hyponatremia, a complication that can lead to serious heart, lung and brain disorders, including coma and death.

Conceptus Inc. designs, develops and markets innovative interventional medical devices for use in reproductive medicine. The company's initial focus is on the development of systems to improve the diagnosis and treatment of fallopian tube diseases and disorders, a primary cause of infertility.

The company has introduced a novel technology designed to improve the safety and ease-of-use of therapeutic hysteroscopy, a growing, less-invasive alternative to hysterectomy. The company is also developing a non-surgical approach to fallopian tube sterilization, the most commonly performed contraceptive procedure worldwide. -0-

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements, the accuracy of which is necessarily subject to risks and uncertainties. The receipt of regulatory approvals, results of product development programs, clinical efficacy of and market demand for products, timing of the transition of manufacturing to the company's facility, among other matters discussed in this release, may differ significantly from the discussion of such matters in the forward-looking statements. Such differences may be based upon factors within Conceptus' control, such as strategic planning decisions by management and reallocation of internal resources, or on factors outside of Conceptus' control, such as delays by regulatory authorities, scientific advances by Conceptus or third parties and introduction of competitive products, as well as those factors discussed in the company's Form 10-K for the year ended December 31, 1996 and other filings with the Securities and Exchange Commission.

CONTACT: Conceptus Inc.

Kathryn Tunstall or Sanford Fitch, 415/802-7240