To Include Worldwide Commercialization of Dermagraft for Venous and Pressure
                 Ulcers and Dermagraft-TC(TM) Internationally

    LA JOLLA, Calif., Jan. 14 /PRNewswire/ -- Advanced Tissue Sciences, Inc.
(Nasdaq: ATIS) and Smith & Nephew plc announced today that they have signed a
binding letter of intent expanding their fifty-fifty joint venture to include
venous ulcers, pressure sores, burns and other wounds.  The joint venture was
originally formed in April 1996 for the worldwide commercialization of
Dermagraft for the treatment of diabetic foot ulcers.  The letter of intent
expands the joint venture to include the worldwide development and marketing
of Dermagraft for the treatment of venous ulcers and pressure sores and the
marketing of Dermagraft-TC outside the United States.
    Under the expanded agreement, Advanced Tissue Sciences will receive at
least $35 million in payments from Smith & Nephew within the next twelve
months for the additional indications, including an immediate $20 million
investment in the Company's common stock.  Payments to Advanced Tissue
Sciences including the diabetic foot ulcer indication, can potentially total
up to $181 million, (including the equity investment), subject to the
achievement of certain milestones.
    "Our partnership with Smith & Nephew has made significant progress, having
launched Dermagraft for the treatment of diabetic foot ulcers in the United
Kingdom, Canada and other European countries," said Arthur J. Benvenuto,
Chairman and Chief Executive Officer of Advanced Tissue Sciences.  "The
expansion of the joint venture allows us to apply this same momentum to the
venous and pressure indications for Dermagraft."
    "Seeing Dermagraft at work in the diabetic foot ulcer patient has been
extremely exciting for Smith & Nephew," stated Chris O'Donnell, Chief
Executive of Smith & Nephew.  "The expansion of the joint venture is an
expected and natural extension of our partnership.  Dermagraft for venous and
pressure ulcers and Dermagraft-TC for burns plays directly to Smith & Nephew's
sales and marketing strengths."
    Dermagraft, a bioengineered living, human dermal replacement, is currently
being marketed for the treatment of diabetic foot ulcers in several countries
outside the U.S.  Dermagraft is also scheduled for review by the General and
Plastic Surgery Devices Panel of the U.S. Food and Drug Administration on
January 29, 1998.  Dermagraft-TC is the first human, fibroblast-derived
temporary skin substitute for the treatment of partial and full-thickness
burns being marketed in the United States.
    Advanced Tissue Sciences, Inc. is a tissue engineering company utilizing
its proprietary core technology to develop and manufacture human tissue
products for tissue repair and transplantation.  In addition to developing
Dermagraft, the Company is currently marketing Dermagraft-TC, a temporary
covering for partial and full-thickness burns in the United States, under
marketing approvals from the FDA.  The Company also is developing products for
cartilage and cardiovascular applications.
    Smith & Nephew, a leading worldwide healthcare company with more than $1.5
billion in annual sales, has a highly successful track record in developing,
manufacturing and marketing a wide variety of innovative and technologically
advanced tissue repair products, primarily in the areas of bone, joints, skin
and other soft tissue.  Smith & Nephew has extensive marketing and
distribution capabilities and sales in more than 90 countries.
    The discussion contained in this press release relating to approval and
commercialization of the Company's products, market opportunities and
therapeutic benefits involves risks and uncertainties.  No assurance can be
given that the Company will successfully obtain Food and Drug Administration
or other regulatory approvals of Dermagraft (or that any such approvals will
be obtained on a timely basis), scale up manufacturing processes, launch its
products within indicated timeframes, achieve payment milestones, obtain
reimbursement for, or successfully commercialize any such products.  These and
other risks are detailed in the Company's publicly available filings with the
Securities and Exchange Commission including the Company's Annual Report on
Form 10-K for the year ended December 31, 1996.  Actual results may differ
materially from those currently anticipated as a result of such risks.

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