Medicare of Transamerica life to begin reimbursement of cryosurgical treatment of the prostate; Landmark decision bodes well for patients with prostate disease.

WAYLAND, Mass.--(BUSINESS WIRE)--Aug. 20, 1996--Candela Corp. (NASDAQ:CLZR) has received notification through the Society of Urological Cryosurgeons that Medicare of Transamerica Life -- the Medicare administrators for Southern California -- will begin reimbursement for the use of cryosurgery in the treatment of prostate disease, the company announced today.

Details about Medicare's policy indicate that coverage will be retroactive to July 1, 1996, and will reimburse Part A and Part B for cryosurgical ablation of the prostate for patients who have local recurrence after radiation therapy, or have local recurrence after radical prostatectomy.

Stuart Fisher, M.D., director of the Society for Urological Cryosurgeons, said, "The decision reached by Medicare of Transamerica Life is a watershed event in our campaign to nurture widespread acceptance of cryosurgery as a highly effective treatment for prostate cancer. Furthermore, we expect that Medicare's reimbursement policy in southern California will bring our efforts to a critical mass as we move closer to achieving nationwide acceptance of cryosurgery. In general, we hope this new position will serve as a template for Medicare's national policy for coverage of this procedure."

Gerard E. Puorro, Candela's president and CEO, said, "We are very pleased to hear this good news and are ready to continue supporting the education of both patients and physicians about the benefits of cryosurgery for treating prostate disease. California is often looked to for direction and this decision will help build momentum behind the American Urological Association's recent ruling to eliminate the terms `experimental' and `investigatory' from their statement describing cryosurgery."

Cryosurgery with the Candela Cryosurgical System uses liquid nitrogen to freeze and destroy diseased prostate cells. It can be done as an outpatient procedure, usually involving only a few days of recovery, and costs about one-third to one-half as much as traditional surgery or radiation.

It is estimated that over 300,000 men in the U.S. will be diagnosed with prostate disease in 1996, with over 40,000 cases ultimately fatal. Deaths due to prostate disease are second only to women's breast cancer, which will claim approximately 44,000 lives in 1996.

Candela Corp. is an increasingly diversified, international company that provides clinical solutions to the dermatology, plastic surgery, and urology markets through medical laser products and services, skin care centers and spas, and cryogenic surgery products. Founded in 1970, the company recently changed its name from Candela Laser Corp. For more information, visit Candela's web site at http://www.clzr.com.

CONTACT: Candela Corp.

Gerard E. Puorro, 508/358-7400 x.488

or

Judith A. Bednarz, 508/358-7400 x.255