InnerDyne Reports First Quarter Financial Results.

Business Editors/Medical Writers

SUNNYVALE, Calif.--(BW HealthWire)--April 20, 2000

Product Sales Increase 24%

Net Income Before Taxes Up 61%

InnerDyne, Inc. (NASDAQ NM: IDYN) today announced that net income for the three months ended March 31, 2000 was $1,126,409, or $0.04 per diluted share.

The first quarter results included a tax benefit of $582,535 from the recognition of deferred tax assets. Net income before tax for the quarter was $563,458, an increase of 61% compared with net income before taxes of $350,799 in the first quarter of 1999. First quarter net income was positively impacted by improvements in gross margin, which reached 74% of revenues, a 400 basis point improvement over the first quarter of 1999.

Total revenues for the first quarter increased 24% to $5,588,287, compared with $4,503,794 in the prior-year period. Product sales were the primary driver of the revenue increase, rising 24% to $5,492,735, compared with $4,431,699 in the year-earlier period.

"We are pleased with the year-over-year quarterly growth in product sales, and the resulting impact on the Company's bottom line. The expansion of our radial dilation access technology into new clinical arenas, such as vascular and urological access, along with continued market share increases in minimally invasive surgery, are our main areas of focus this year," said William G. Mavity, President and Chief Executive Officer.

Commenting on new products, Mr. Mavity added that the Company's percutaneous vascular access product, INNERVASC(TM), will be launched by Maxxim Medical soon after receipt of Food and Drug Administration (FDA) clearance of a pending filing for the latest product version, noting, "we are looking forward to substantial second half sales and profit contributions as a result of our new relationship with Maxxim."

InnerDyne's urology access product, G-RED(TM), has received positive reviews from physicians who have used the product for percutaneous kidney and bladder access as part of the Company's design verification. Product launch is planned to occur during the current quarter. Further, the Company's work with the intra-organ device family is on track for a limited rollout in the second half of 2000.

The Company will hold a conference call to discuss these results beginning at 12:00 noon Eastern Time today. Individual investors are invited to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at www.vcall.com. To listen to the live call, please go to the Web site at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. In addition, a replay will begin shortly after the call has ended and will be available for 90 days.

InnerDyne, Inc. designs, develops, manufactures and commercializes minimally invasive surgical access products incorporating its proprietary radial dilation technology. The Company also is pursuing applications for radial dilation in areas outside its primary market focus, and improvements in its proprietary biocompatible coatings technologies, which it intends to commercialize either internally or through strategic alliances.

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including those risks detailed from time to time in the Company's regulatory filings, including the annual report on Form 10-K for the year ended December 31, 1999, and the Forms 10-Q for the quarters ended in 2000, as or to be filed with the Securities and Exchange Commission.

                            INNERDYNE, INC.
                       Statements of Operations

                                   Three Months Ended March 31,
                                    2000                 1999
                                    ----                 ----
Revenues                         $5,588,287           $4,503,794
Costs and expenses:
 Costs of sales                   1,452,327            1,335,984
 Research, development,
  regulatory and clinical           748,847              680,266
 Sales and marketing              2,253,381            1,671,985
 General and administrative         625,842              504,931
                                    -------              -------
  Total costs and expenses        5,080,397            4,193,166

Income for operations               507,890              310,628
Interest/other
 income/expense, net                 55,568               40,171
                                     ------               ------

  Income before income taxes        563,458              350,799
Income tax benefit, net             562,951                   --

         Net income               1,126,409              350,799
                                  =========              =======

Net income per diluted share          $0.04                $0.02
Shares used in diluted net
 income per share                25,947,158           23,060,584


                      SELECTED BALANCE SHEET DATA

                              March 31, 2000        December 31, 1999

Cash and cash equivalents         $7,934,671              $6,862,313
Current assets                    14,605,667              12,356,668
Total assets                      15,284,939              13,145,681
Current liabilities                2,725,375               2,349,552
Stockholders' equity             $12,348,906             $10,563,332