SmallCaps Online LLC Comments on Advanced Tissue Sciences' Alliance with INAMED Corp.

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New York, NY, May 13, 1999 - SmallCaps Online LLC commented today Advanced Tissue Sciences' (Nasdaq: ATIS) announced alliance with INAMED Corp. (OTC BB: IMDC). The full text of this report can be accessed at SmallCaps' web site, at www.SmallCapsOnline.com.

Excerpts from the report follow:

ATIS announced today the signing of an agreement with INAMED Corp. for the development and marketing of tissue-engineered products for use in cosmetic and reconstructive surgery and other uses. We feel this transaction is very positive for ATIS both economically and strategically, as it not only provides financial flexibility to ATIS, but also validates the use of ATIS' human-based tissue-engineering technology for indications outside ATIS' traditional focus on wound-healing products. Despite the recent appreciation in ATIS stock, we continue to believe the stock is undervalued and recommend purchase of ATIS shares for those investors tolerant of the risks associated with small-cap equity investments.

Deal Economics: In exchange for the right to further develop, manufacture and sell certain ATIS products, IMDC will make $6 million in payments to ATIS, half in cash and half in ATIS stock at a significant premium (the greater of $6 per share or $3 more than the trading price over the preceding 30 days). If IMDC exercises its right to license ATIS human collagen for use in wrinkles and urinary incontinence, ATIS could receive an additional $4 million, again, half in cash and half in purchased stock. This option expires October 1, 1999. In addition to the upfront payments, ATIS will receive a $2 million milestone payment per product that receives FDA approval, to a maximum of $10 million. ATIS will also receive royalty payments on sales of products emerging from the alliance. IMDC also acquired up to 500,000 warrants that will be priced at twice the price of the common stock purchased. IMDC has agreed to hold ATIS' common stock until at least October 2002.

Broadened Pipeline: The first marketed product we expect to see emerge from this alliance uses the TransCyte technology, (which is already marketed by ATIS and Smith & Nephew for second- and third-degree burns), and would be to treat facial chemical peels and laser surgery. Because of the similarities between partial-thickness burns and the burns resulting from chemical peels, we do not believe obtaining regulatory approval for this product will be arduous. We are hopeful that this product could be on the market for these indications by the end of 1999. Other potential products using ATIS' proprietary technology include the use of human collagen for breast reconstruction following lumpectomy, for the reduction in wrinkles and for the treatment of urinary incontinence and the use of tissue-engineered cartilage for facial reconstruction. We would expect a steady flow of news over the next 6-18 months surrounding these potential products as clinical trials progress.

Marketing Issues: With an experienced salesforce marketing directly to plastic and cosmetic surgeons and to dermatologists, we feel that IMDC is an excellent partner of choice to promote the potential products to come out of this alliance.

Strategic Implications: We are encouraged that ATIS was able to establish such a lucrative alliance surrounding its tissue engineering technology for these applications. We feel that the interest expressed by IMDC in ATIS' human-based technologies validates the Company's approach to human tissue engineering and are hopeful that ATIS will be able to sign additional non-wound-healing partnerships, perhaps for indications such as tissue sealants, vocal chord augmentation, angioplasty plugs, device coatings and drug delivery.

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