InnerDyne Reports Second Quarter Financial Results.

SUNNYVALE, Calif.--(BW HealthWire)--July 27, 1999--

-Product Sales Up 22% Over 2Q 1998-

InnerDyne, Inc. (NASDAQ NM: IDYN) today announced financial results for the three and six months ended June 30, 1999.

Product sales in the second quarter of 1999 were up 22 percent to $4,831,740, compared with $3,948,933 for the second quarter of 1998. Total revenues in the quarter were $4,992,987, an increase of 14 percent compared with revenues of $4,372,636 for the same period last year. Net income for the three months ended June 30, 1999 was $207,540, or $0.01 per share on a diluted basis, compared with a net loss of $21,124, or $0.00 per share on a diluted basis, for the same period last year. Second quarter 1999 gross margin exceeded 71 percent.

For the six months ended June 30, 1999, product sales were $9,263,439, up 20 percent over product sales of $7,749,973 for the same period last year. Total revenues for the six months ended June 30, 1999 were $9,496,781, an increase of 11 percent over total revenues of $8,578,408 for the comparable six-month period of 1998. The Company's net income for the six months ended June 30, 1999 was $558,339, or $0.02 per share on a diluted basis, compared with a net loss of $125,522, or a loss of $(0.01) per share on a diluted basis, for the same period in 1998.

"The highlight of the Company's second quarter performance is unquestionably the significant increase in the rate of growth of product revenue, up nine percent versus the first quarter of 1999," said William G. Mavity, president and chief executive officer. "We believe this increase is a result of the marketing campaign we initiated during the first quarter, to leverage the enhanced labeling claims granted to our Step(TM) product line by the FDA this past January in the area of comparative product safety."

"Our sales momentum continues to be strong," stated Mr. Mavity. "Looking forward, we expect to introduce two new products during the second half of this year. We also look for important progress by year-end with our REVAS product for vascular access, and with animal studies involving the coating of stents to treat restenosis."

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. InnerDyne common stock is traded on the NASDAQ National Market under the symbol IDYN.

Investors will have the opportunity to listen to the conference call over the Internet through Vcall, a service of the Investor Broadcast Network, at http://www.vcall.com. To listen to the live call, please go to the web site at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call is completed.

Please Note: 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, 1998, and the Forms 10-Q for the quarters ending in 1999, as or to be filed with the Securities and Exchange Commission. -0-

                                        INNERDYNE, INC.
                                    STATEMENT OF OPERATIONS
                                           (Unaudited)

                              Three Months Ended    Six Months Ended
                                   June 30,                  June 30,
                              1999       1998       1999       1998
                              ----       ----       ----       ----

Revenues                  $4,992,987 $4,372,636 $9,496,781 $8,578,408

Cost of sales              1,427,066  1,422,080  2,763,050  2,728,325
Research, development,
 regulatory and clinical     708,546    768,707  1,388,812  1,527,203
Sales and marketing        2,111,625  1,749,421  3,783,610  3,484,860
General and administrative   570,632    496,765  1,075,563  1,049,338
                             -------    -------  ---------  ---------
     Total costs and
      expenses             4,817,869  4,436,973  9,011,035  8,789,726

Interest/other income, net    42,422     43,213     82,593     85,796

Income before taxes          217,540  ($21,124)    568,339 ($125,522)
                             -------  ---------    ------- ----------

Income tax expense            10,000       -0-      10,000      -0-

Net income (loss)           $207,540  ($21,124)   $558,339 ($125,522)
                            ========  =========   ======== ==========

Net earnings (loss)
 per basic share               $0.01    $(0.00)      $0.03    $(0.01)
Net earnings (loss)
 per diluted share             $0.01    $(0.00)      $0.02    $(0.01)

  Basic and diluted
   shares used in net
   earnings (loss)
   per share
   calculation
Basic                    21,923,812  21,813,294  21,907,810 21,785,097
Diluted                  23,056,092  21,813,294  23,067,196 21,785,097




                        SELECTED BALANCE SHEET

                                    June 30,          December 31,
                                      1998              1998
     Cash, cash equivalents and
       marketable securities       $6,115,701       $5,757,538
     Current assets                11,031,371       10,228,888
     Total assets                  11,914,105       11,088,703
     Current liabilities            2,184,827        2,071,216
     Stockholders' equity          $9,334,590       $8,668,764