Heartport Reports Third Quarter Results: Doubles Clinical Experience, Completes Key Acquisitions, Strengthens Patent Position.

REDWOOD CITY, Calif.--(BUSINESS WIRE)--Oct. 30, 1996-- Heartport, Inc. (Nasdaq: HPRT), today announced its financial results for the third quarter ended September 30, 1996. The company also reported that clinical experience with Port-Access(TM) surgery has nearly doubled since the last quarter. There has also been substantial regulatory progress, which will enable an accelerated commercial launch in mid-1997. In addition, the company has made two acquisitions: Utah Biomedical Test Laboratory (UBTL) and Endosurgical Development Corporation (EDC).

Heartport reported that experience with Port-Access surgery has increased substantially since the company's last clinical update in July. Of the 134 Port-Access procedures completed to date worldwide, 69 were Port-Access coronary artery bypass grafting (Port-Access CABG) and 65 were Port-Access mitral valve replacement or repair (Port-Access MVR) surgeries. As announced earlier this month, Port-Access surgery has either begun or will commence soon at Heartport's U.S. clinical training centers in preparation for full-scale commercial launch. In addition, European centers continue to perform Port-Access surgeries as part of a clinical study protocol. Researchers at Dresden University Hospital reported this month that Port-Access CABG is now considered routine at their institution.

In recent weeks, Heartport announced receipt of clearances from the U.S. Food and Drug Administration to market its core systems and devices for use in minimally invasive heart surgery. These clearances should allow the company to launch in the United States as much as a year earlier than previously expected. To take advantage of these clearances, the company acquired UBTL, which will enable it to meet the challenge of providing high-quality, high-volume, cost-efficient Port-Access cardiac surgery training.

The company also acquired EDC, a development stage company working in the field of minimally invasive cardiac surgery. The assets acquired include intellectual property and technology that will complement Heartport's broad intellectual property portfolio.

"Among Heartport's chief priorities since the company's inception has been to pursue the dominant intellectual property position in the field of minimally invasive cardiac surgery and, as a result, we've established an extremely strong patent portfolio," said Wesley D. Sterman, M.D., president and chief executive officer. "The EDC acquisition is a step forward in our strategy to acquire intellectual property in this field that, when combined with our own, strengthens that portfolio."

The company reported a net loss for the quarter ended September 30, 1996, of $13.4 million ($0.55 per share), compared with a net loss of $2.4 million ($0.12 per share) for the same period last year. For the nine months ended September 30, the company reported a net loss of $23.1 million ($1.04 per share), compared with a net loss of $6.3 million ($0.32 per share) for the comparable period last year. The quarter and year-to-date results include a charge of $5.2 million ($0.21 per share) associated with the acquisition of EDC. Without the acquisition charge, Heartport would have reported a net loss for the quarter of $8.2 million ($0.34 per share), and a net loss for the nine months ended September 30 of $17.9 million ($0.81 per share).

Heartport, Inc., is a cardiovascular device company developing minimally invasive Port-Access approaches to major heart surgery, including coronary artery bypass grafting and heart valve replacement and repair. The company's Port-Access Systems are designed to allow surgeons to perform a wide range of heart operations through small incisions, or "ports," between the ribs, eliminating the need to crack open the patient's chest. Heartport believes that its systems may reduce the trauma, complications and pain associated with heart surgery, shorten hospital stays, reduce recovery time, and lower overall costs.

Note: Except for the historical information contained herein, this press release contains forward-looking statements, the accuracy of which are necessarily subject to risks and uncertainties. Actual events may differ materially due to factors set forth from time to time in the company's filing with the Securities and Exchange Commission, including its prospectus dated April 25, 1996. -0-

                           HEARTPORT, INC.
                     (a development stage company)

                   CONDENSED STATEMENTS OF OPERATIONS
                             (unaudited)


                     Three Months Ended           Nine Months Ended
                        September 30,                September 30,
                      1996         1995          1996           1995

Costs and expenses:
Research and
 development      $6,312,494    $2,200,528    $14,500,732     $5,705,212
General and
 administrative    3,273,186       300,344      5,723,707        864,222
Patent
 acquisition       5,215,708           -        5,215,708            -
Loss from
 operations       14,801,388     2,500,872     25,440,147      6,569,434

Interest income    1,485,611       174,403      2,649,339        317,056
Interest expense    (120,104)      (47,459)      (344,307)       (82,084)
Net loss        $(13,435,881)  $(2,373,928)  $(23,135,115)   $(6,334,462)
Pro forma net
 loss per share       $(0.55)       $(0.12)        $(1.04)        $(0.32)
Shares used in
 calculation of
 pro forma net
 loss per share   24,252,000    19,783,000     22,239,000     19,783,000



SELECTED BALANCE SHEET DATA

                              September 30, 1996    December 31, 1995
                                   (unaudited)

Cash and short-term investments    $103,034,398         $12,610,176
Total current assets                105,241,035          12,691,841
Property and equipment, net           4,875,160           1,367,726
Total assets                        110,321,388          14,266,493
Total current liabilities             4,870,401           1,457,854
Total long-term liabilities           4,613,677           4,034,070
Total stockholders' equity          100,837,310           8,774,569

CONTACT: Heartport, Inc.

Jim Weiss, 415/482-4430