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Vasogen Announces Third Quarter 2003 Results

Mississauga, Ontario (October 16, 2003) - October 16, 2003

Vasogen (TSX:VAS; AMEX:VSV), today reported the results of operations for the third quarter of 2003. Comparative figures relate to the three-month and nine-month periods ending August 31, 2003, and to the three-month and nine-month periods ending August 31, 2002. All amounts referenced herein are in Canadian dollars, unless otherwise stated.

Cash, cash equivalents, and marketable securities held to maturity totalled $70.6 million at August 31, 2003, versus $42.7 million at year-end 2002. During the third quarter, the Company completed a private placement for gross proceeds of $50.7 million (US$37.9 million), resulting in the issuance of 9.5 million shares at a price of US$4.00 per share.

The loss for the third quarter of 2003 was $5.9 million, or $0.10 per share, compared with a loss of $4.2 million, or $0.08 per share, in 2002. The loss for the nine months ended August 31, 2003, was $18.6 million, or $0.34 per share, compared with a loss of $13.7 million, or $0.28 per share, in 2002. The increased loss resulted mainly from higher costs associated with the advancement of the Company’s phase III clinical programs in chronic heart failure and peripheral arterial disease.

Research and development expenditures totalled $5.8 million in the third quarter of 2003, compared with $2.5 million in 2002. For the nine months ended August 31, 2003, research and development expenses totalled $14.2 million, compared with $8.5 million in 2002. The increase in spending primarily reflects costs to support Vasogen’s phase III programs.

General and administration expenditures totalled $2.6 million for the third quarter of 2003, compared with $2.0 million in 2002. For the nine months ended August 31, 2003, general and administration expenses totalled $7.2 million, compared with $5.6 million in 2002. These increases resulted mainly from increases in insurance expense and other infrastructure costs associated with supporting the Company’s clinical programs.

Foreign exchange gain on cash, cash equivalents, and marketable securities balances denominated in United States currency totalled $2.2 million for the third quarter of 2003, compared with a nominal loss in 2002. For the nine months ended August 31, 2003, the foreign exchange gain on cash, cash equivalents, and marketable securities balances denominated in United States currency totalled $1.9 million, compared with a loss of $0.3 million in 2002. This unrealized foreign exchange gain is a result of changes in foreign exchange rates subsequent to the financing completed during the quarter, the proceeds of which were held in securities denominated in U.S. dollars.

For the third quarter of 2003, investment income was comparable to the same period in 2002. For the nine months ended August 31, 2003, investment income totalled $0.8 million, compared with $0.7 million for the same period in 2002.

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

Highlights:

• Vasogen initiated patient enrollment in its pivotal phase III ACCLAIM (Advanced Chronic Heart Failure CLinical Assessment of Immune Modulation Therapy) trial in chronic heart failure. The Cleveland Clinic Foundation, Baylor College of Medicine and the DeBakey Heart Center of The Methodist Hospital in Houston, and l’Hôpital Notre-Dame du CHUM (University of Montreal), were the first centers to enroll patients in the study. The ACCLAIM trial is designed to confirm the ability of Vasogen’s immune modulation therapy to reduce the risk of death and hospitalization in patients with advanced heart failure. The trial is expected to enroll up to 2,000 patients with advanced chronic heart failure at leading cardiac centers in the United States and Canada.
  
• Previously reported findings from Vasogen’s double-blind, placebo-controlled phase II clinical trial of its immune modulation therapy in chronic heart failure were presented during the “Novel Treatment and Etiologic Issues in Heart Failure” symposia of the 7th Annual Scientific Meeting of the Heart Failure Society of America in Las Vegas, the largest meeting in North America of scientists and healthcare professionals devoted to heart failure research, and at the “Innovative/Alternative Strategies for Heart Failure in the 21st Century” session of the Heart Failure Summit VIII in Cleveland. 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, and principal investigator for the U.S. arm of the ACCLAIM trial presented the results.
  
• Vasogen completed a private placement totaling US$37.9 million, resulting in the issuance of 9.5 million shares at a price of US$4.00 per share. Participants in the private placement included strategic and financial investors, including Quest Diagnostics, WPG Farber Fund, AIG Global Investment, China Development Industrial Bank, George Weiss Associates, Knott Partners, Oakmont Corporation, Straus Asset Management, Sceptre Investment Counsel, and AGF Management. New York-based Needham & Company acted as placement agent for the offering.
  
• The U.S. Patent and Trademark Office issued patent No. 6,572,895 covering the use of Vasogen’s immune modulation therapy in the treatment of chronic heart failure.
  
• New findings from Vasogen’s research program in neuro-inflammation have been selected for presentation during a poster session at Neuroscience 2003, The Society for Neuroscience 33rd Annual Meeting in New Orleans, Louisiana.

A quarterly conference call will be conducted on October 16, 2003 at 4:10 p.m. Eastern Time. The conference can be accessed by calling 416-695-5259 or 1-877-888-4210 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.

About Vasogen:
Vasogen is a leader in the research and commercial development of immune modulation therapies for the treatment of cardiovascular disease and other inflammatory disorders. Vasogen’s immune modulation therapies are designed to target chronic inflammation by activating the immune system’s physiological anti-inflammatory response to apoptosis. Vasogen’s lead product is currently in pivotal phase III clinical trials for the treatment of chronic heart failure and peripheral arterial disease. The Company is also developing immune modulation therapies for the treatment of additional indications, including neuro-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