Advanced Tissue Sciences Announces Agreement for Additional Asset Sales

San Diego, Calif., April 28, 2003 -- Advanced Tissue Sciences, Inc. (ATISZ.PK -- please read the disclaimer in the last paragraph of this release regarding trading under this symbol) today announced it has entered into an agreement to sell additional fixed assets and intellectual property rights to Smith & Nephew Wound Management (La Jolla) subject to the asset sale process approved as part of the ATS Chapter 11 Liquidating Plan of Reorganization.

The company also filed a motion today with the bankruptcy court seeking an order approving the sale or the sale of the assets to a qualified overbidder.

Under the agreement, Smith & Nephew, or a successful overbidder, would acquire certain ATS intellectual property rights including that related to cartilage, orthopedics, spinal, neurological, and dental applications, which includes rights to a pending clinical trial using Dermagraft in a periodontal application. The agreement also covers transferring certain research and development equipment and assets related to the manufacturing of collagen.

Smith & Nephew will pay ATS or the ATS Liquidating Trust $700,000 at closing in addition to future milestone and royalty payments conditional on future product development.

Further details of the transaction and information regarding the overbid process may be obtained from the motion filed with the bankruptcy court seeking approval of the above transaction.

Advanced Tissue Sciences also announced today that the ATS Liquidating Trust plans to reactivate the company’s former web site, www.advancedtissue.com, as a continuing source of information about the ATS Liquidating Trust. The web site is planned to become active again in early May, 2003.

This release contains forward-looking statements regarding the sale of assets of Advanced Tissue Sciences pursuant to its Chapter 11 Liquidating Plan of Reorganization (“Plan”) which was confirmed by the Bankruptcy Court by a final order dated March 21, 2003 and which became effective on March 31, 2003. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties are detailed in the Plan and Disclosure Statement filed with the Bankruptcy Court, in publicly available documents previously filed with the Securities and Exchange Commission prior to the effective date of the Plan and in the motion filed with the bankruptcy court seeking its approval of the above transaction. The company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements to reflect events or circumstances arising after the date hereof.

As a result of the Plan, the stock of the Company was cancelled and its former stockholders now hold non-trading interests in the ATS Liquidating Trust. According to the terms of the Plan, the Interests in the ATS Liquidating Trust are not to trade and the Liquidating Trustee will only recognize as beneficiaries of the Trust those equity holders of record as of the effective date of the Plan. Any trading that may be occurring after the effective date of the Plan under the symbol “atisz.pk” or otherwise is unauthorized by the Plan and will not be recognized by the Trustee. As a result of the terms of the Plan and the order of the bankruptcy court confirming the Plan, the Securities and Exchange Act of 1934 as amended and the rules promulgated thereunder no longer apply to the Company since it has no issued stock and no shareholders. However, to the extent applicable, the above cautionary statement is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.