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Vasogen Announces Second Quarter 2002 Results

Toronto, Ontario - July 24, 2002

Vasogen Inc. (TSX:VAS; AMEX:VSV) today reported the results of operations for the second quarter of 2002. Comparative figures relate to the three-month and six-month periods ending May 31, 2002, and to the three-month and six-month periods ending May 31, 2001. All amounts referenced herein are in Canadian dollars, unless otherwise stated.

The loss for the second quarter of 2002 was $4.5 million, or $0.09 per share, compared to a loss of $4.1 million, or $0.09 per share, in 2001. The loss for the six months ended May 31, 2002, was $9.5 million, or $0.20 per share, compared to $6.8 million, or $0.15 per share, for the same period in 2001. The increased loss resulted primarily from higher costs associated with the expansion of clinical research and development activities and the corporate costs associated with supporting these activities.

Research and development expenditures totaled $2.8 million in the second quarter of 2002, compared to $2.4 million in 2001. For the six months ended May 31, research and development expenditures totaled $6.0 million, compared to $4.2 million for the same period in 2001. The increase in spending primarily reflects costs to support Vasogen’s expanded clinical development activity, as further discussed in the “Highlights” below.

General and administration expenditures totaled $1.9 million for the second quarter of 2002, compared to $2.0 million in 2001. For the six months ended May 31, general and administration expenditures totaled $3.9 million, compared to $3.6 million for the same period in 2001. The nominal increase for the six months ended May 31, 2002, relates to the growing infrastructure requirements necessary to support advancing the development of the Company’s immune modulation therapy.

For the second quarter of 2002, investment income totaled $0.2 million, compared to $0.4 million in 2001. For the six months ended May 31, investment income totaled $0.4 million, versus $1.0 million for the comparable period in 2001. Investment income was lower in 2002, compared to the prior year, primarily due to lower average interest rates in the Company’s investment portfolio and a lower average balance in the investment portfolio.

Cash, cash equivalents, and marketable securities held to maturity totaled $51.5 million, versus $39.5 million at year-end 2001. During the second quarter of the fiscal 2002 period, the Company completed a public offering of 5.2 million common shares for net proceeds of $23.1 million, whereas no financings were completed for the comparable period in 2001. The total number of common shares outstanding at the end of the second quarter of 2002 increased to 51.6 million from 46.4 million at fiscal 2001 year-end.

An expanded Management’s Discussion & Analysis for the quarter is accessible on Vasogen’s web site at www.vasogen.com.

Highlights

• Vasogen announced plans for a pivotal, double-blind, placebo-controlled trial of its immune modulation therapy in chronic heart failure (CHF) designed to support regulatory approval for marketing in the United States, Canada, and Europe. This trial follows a recently completed double-blind, placebo-controlled CHF trial, which demonstrated significant reductions in the risk of death and hospitalization for those patients receiving immune modulation therapy. Each year in the U.S. and Canada, there are over 300,000 deaths associated with CHF, and the cost of medical care, primarily resulting from hospitalizations, exceeds $34 billion annually. An estimated five million people in North America are currently living with CHF. The pivotal trial will be conducted at clinical sites throughout the U.S. and Canada, subject to regulatory approval.
• Vasogen appointed James Young, MD, Medical Director of the Kaufman Center for Heart Failure and Head of the Section of Heart Failure and Cardiac Transplant Medicine at The Cleveland Clinic, a world renowned heart center, as Chairman of the Steering Committee and global Principal Investigator for the Company’s planned pivotal trial in CHF. Dr. Young has played a leading role in numerous multi-center clinical trials focusing on heart failure and transplantation and is the author and co-author of several book chapters and of many articles appearing in prestigious scientific journals.
• Guillermo Torre-Amione, MD, PhD, Medical Director of the Heart Transplant Service at Baylor College of Medicine and the DeBakey Heart Center of The Methodist Hospital in Houston, Texas, was appointed as Principal Investigator for the U.S. arm of Vasogen’s CHF pivotal study. Jean-Lucien Rouleau, MD, Head, Division of Cardiology, University Health Network at the University of Toronto, and Head of Cardiology at Mount Sinai Hospital, will act as Principal Investigator for the Canadian arm of the trial. Both Drs. Torre-Amione and Rouleau are recognized experts in the field of CHF and have published extensively on the subject.
• Vasogen announced that results from its recently reported clinical trial in CHF have been accepted for oral presentation at the “Late Breaking Clinical Trials” session of the Annual Scientific Meeting of the Heart Failure Society of America to be held in Boca Raton, Florida, on September 25, 2002. Results from this study formed the basis for Vasogen’s planned pivotal study in CHF. At the conference, Dr. Torre-Amione will present comprehensive findings from Vasogen’s CHF trial, including previously reported results that demonstrated significant reductions in death and hospitalizations for patients receiving Vasogen’s immune modulation therapy.
• Vasogen announced results from an open-label, multi-center clinical trial in moderate to severe psoriasis. The 113-patient study, conducted under the direction of Daniel Sauder, MD, Professor and Chairman, Department of Dermatology, Johns Hopkins University, achieved its primary objective of identifying an optimal treatment schedule for Vasogen’s immune modulation therapy in psoriasis.
• Results from a double-blind, placebo-controlled clinical trial of Vasogen’s immune modulation therapy in patients with advanced peripheral arterial disease (PAD) were published in the May 2002 issue of the European Journal of Vascular and Endovascular Surgery (23: 381-387). The results from this trial formed the basis for Vasogen’s 500-patient pivotal PAD clinical trial in North America.
• Results from preclinical research demonstrating that Vasogen’s immune modulation therapy significantly reduced the progression of atherosclerosis in a model of chronic vascular disease were published in the May 2002 issue of Atherosclerosis (162: 45-53). This research showed that Vasogen’s immune modulation therapy decreased the progression of atherosclerosis and may stabilize atherosclerotic plaques by reducing inflammation. Chronic inflammation is now widely accepted as an important mechanism in the progression and rupture of atherosclerotic plaques.
• Vasogen announced the appointment of Surya N. Mohapatra, PhD, President and Chief Operating Officer of Quest Diagnostics Incorporated (NYSE: DGX), to its Board of Directors. Dr. Mohapatra combines an exceptionally strong background in U.S. and international operations, with a PhD in medical physics from the University of London and The Royal College of Surgeons of England. Vasogen and Quest Diagnostics have formed a strategic alliance for the joint commercialization of Vasogen’s immune modulation therapy in the United States.
• On May 28, 2002, Vasogen closed a firm commitment/bought deal offering of 5.2 million common shares at $4.85 per share, for gross proceeds of approximately $25 million. Net proceeds of the offering, together with the Company’s current cash resources, will be used to accelerate clinical development in chronic heart failure (CHF), to support ongoing research and development programs, and for general operations.

A quarterly conference call will be conducted on Wednesday, July 24, 2002 at 4:10 p.m. Eastern Time. The conference can be accessed by calling 416-640-4127 or 1-888-881-4892 ten minutes prior to the call. An audio web cast of the event will also be available at www.vasogen.com.

View entire press release with Financials.

Vasogen is developing immune modulation therapies for the treatment of cardiovascular and other inflammatory diseases.

This press release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. For this purpose, any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words "believes," "anticipates," "plans," "intends," "will," "should," "expects," "projects," and similar expressions are intended to identify forward-looking statements. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause actual results, future circumstances, or events to differ materially from those projected in the forward-looking statements. These risks include, but are not limited to, those associated with the success of research and development programs, the regulatory approval process, competition, securing and maintaining corporate alliances, market acceptance of the Company's products, the availability of government and insurance reimbursements for the Company’s products, the strength of intellectual property, financing capability, the potential dilutive effects of any financing, reliance on subcontractors and key personnel and other risks detailed from time-to-time in the Company's public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. The forward-looking statements are made as of the date hereof, and the Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

CONTACT:
Glenn Neumann, Investor Relations
2155 Dunwin Drive
Mississauga, ON, Canada L5L 4M1
tel: (905) 569-9065 fax: (905) 569-9231
www.vasogen.com / investor@vasogen.com