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Vasogen Announces 2006 Year-end Results

Toronto, Ontario - January 31, 2007

Vasogen Inc. (NASDAQ:VSGN; TSX:VAS) today reported its financial and operational results for the fiscal year ended November 30, 2006. All dollar amounts referenced herein are Canadian dollars unless otherwise noted.

At November 30, 2006, our cash and cash equivalents, restricted cash, and marketable securities held to maturity totaled $36.8 million, compared with $85.2 million at November 30, 2005.

As of January 1, 2007, the outstanding principal balance of our convertible notes has been reduced to US$4.6 million from the US$8.2 million outstanding principal balance at November 30, 2006, as a result of the two instalment payments made since year-end. Since September 1, 2006, we have been required, under the terms of the convertible notes, to maintain a balance of cash, including restricted cash, and marketable securities equal to 110% of the convertible notes outstanding. We have satisfied this cash test at all times since it came into effect.

We incurred a net loss for the year of $66.4 million, or $0.71 per common share, compared with a net loss of $93.0 million, or $1.17 per common share, for the previous year. The loss has decreased as a result of the reduction in the costs associated with our phase III clinical programs. Included in the loss for the year are $19.2 million of non-cash expenses for stock-based compensation, amortization and certain costs associated with the convertible note financing.

In 2006, research and development expenses were $32.7 million compared to $71.5 million in 2005. The majority of the decrease in our R&D expenses, when compared with 2005, resulted from a significant reduction in the clinical trial activities relating to our phase III programs.

General and administration expenses were $19.3 million in 2006, compared to $22.1 million in 2005. These costs have decreased in 2006 as a result of the reduced level of activity required to support the current operations.

Highlights

Celacade™ Technology

The key findings from the 2,400-patient ACCLAIM trial of our Celacade technology in chronic heart failure were presented at the World Congress of Cardiology 2006 and at the 10th Annual Scientific Meeting of the Heart Failure Society of America. We announced in June that the ACCLAIM study did not reach the primary endpoint of significantly reducing the risk of death and cardiovascular hospitalization in the total patient population; however, this endpoint was met for large pre-defined subgroups. In patients with NYHA Class II heart failure at baseline, Celacade was shown to significantly reduce the risk of death or first cardiovascular hospitalization by 39%. Celacade was also shown to significantly reduce the risk of death or first cardiovascular hospitalization by 26% in patients with no prior history of heart attack at baseline. Consistent with the impact of Celacade on the risk of mortality and morbidity in major subgroups within the ACCLAIM trial was the finding of a significant improvement in quality of life for the entire study population. Celacade was shown to be well tolerated in the ACCLAIM patient population, who were receiving standard-of-care medications for heart failure, including diuretics, beta-blockers, and ACE-inhibitors; there were no significant between-group differences for any serious adverse events.

VP025

In May 2006, we announced that preclinical findings from our VP025 drug development program demonstrated a significant reduction of several pro-inflammatory cytokines in a preclinical model of diabetes with diabetic retinopathy, a common complication of diabetes that eventually results in the loss of vision. These findings were presented at the Scientific Sessions of the Association for Research in Vision and Ophthalmology (ARVO) Annual Meeting.

Corporate

On March 22, 2006, following our annual meeting of shareholders, Terrance H. Gregg succeeded William R. Grant as Chairman of our Board of Directors. Mr. Gregg joined Vasogen’s Board of Directors in 1999. Mr. Gregg’s extensive experience in the healthcare sector includes his role as President and Chief Operating Officer of MiniMed, Inc., where he successfully transformed the company from a development-stage therapeutic device company into a global leader in diabetes management systems. In 2001, Medtronic acquired MiniMed for US$3.4 billion.

In January 2006, Ronald M. Cresswell, Ph.D., Hon. D. Sc., F.R.S.E., former Senior Vice President and Chief Scientific Officer of Warner-Lambert, and Calvin R. Stiller, C.M., O.ONT, M.D., F.R.C.P.(C.), co-founder and former Chairman and CEO of the Canadian Medical Discoveries Fund, were appointed to our Board of Directors. Both individuals have considerable experience directing the research, development, and business initiatives of companies commercializing products for the healthcare industry. Dr. Cresswell has over 30 years of research and commercial development experience in cardiovascular and other important therapeutic areas and his vision and leadership in the development of Lipitor® was instrumental in the product’s ultimate success. Dr. Stiller was principal investigator of the Canadian multi-center study that established the importance of cyclosporine and led to its worldwide use as first-line therapy for transplant rejection.

In November 2006, we raised US$20.3 million in gross proceeds through the sale of our common shares and warrants to institutional investors.

Further to our press release issued on August 11, 2006, regarding our listing on the NASDAQ Global Market, we are planning to apply to transfer our listing to the NASDAQ Capital Market.

As previously announced, a conference call will be conducted on January 31, 2007, at 4:30 p.m. Eastern Time. The conference call may be accessed by calling 416-695-6130 or 1-888-789-0150 ten minutes prior to the call. An audio web cast of the event will also be available at www.vasogen.com. A re-broadcast of the conference call may be accessed by calling 416-641-2130 or 1-888-330-1923, pin code 9115#, and will also be available at www.vasogen.com.

About Vasogen:
Vasogen is focused on the research and commercial development of technologies targeting the chronic inflammation underlying cardiovascular and neurological disease. Vasogen’s Celacade™ technology is in late-stage development for the treatment of chronic heart failure. The recently completed phase III ACCLAIM trial assessed the impact of Celacade on reducing the risk of mortality and morbidity in patients with Class II-IV systolic heart failure. Vasogen is also developing a new class of drugs for the treatment of neuro-inflammatory disorders.VP025 is the lead product candidate from this new class of drugs.

Certain statements contained in this press release, the upcoming conference call and webcast, or elsewhere in our public documents constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and/or “forward-looking information” under the Securities Act (Ontario). These statements may include, without limitation, summary statements relating to results of the ACCLAIM trial in patients with chronic heart failure, plans to advance the development of Celacade™, plans to fund our current activities, statements concerning our partnering activities and health regulatory submissions, strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimated”, “predicts”, “potential”, “continue”, “intends”, “could”, or the negative of such terms or other comparable terminology. We made a number of assumptions in the preparation of these forward-looking statements, including assumptions about the nature, size and accessibility of the market for Celacade in the treatment of chronic heart failure, particularly in Europe, the regulatory approval process leading to commercialization and the availability of capital on acceptable terms to pursue the development of Celacade, and the feasibility of additional trials. You should not place undue reliance on our forward-looking statements which 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, the outcome of further analysis of the ACCLAIM trial results, the requirement or election to conduct additional clinical trials, delays or setbacks in the regulatory approval process, securing and maintaining corporate alliances, the need for additional capital and the effect of capital market conditions and other factors on capital availability, the potential dilutive effects of any financing, risks associated with the outcome of our research and development programs, the adequacy, timing and results of our clinical trials, competition, market acceptance of our products, the availability of government and insurance reimbursements for our products, the strength of intellectual property, reliance on subcontractors and key personnel, losses due to fluctuations in the U.S.-Canadian exchange rate, and other risks detailed from time to time in our public disclosure documents or other filings with the Canadian and U.S. securities commissions or other securities regulatory bodies. Additional risks and uncertainties relating to our Company and our business can be found in the “Risk Factors” section of our Annual Information Form and Form 20-F for the year ended November 30, 2006, as well as in our later public filings. The forward-looking statements are made as of the date hereof, and we disclaim any intention and have 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. Unless otherwise indicated, numerical values indicating the statistical significance (“p-values”) of results included in this document are based on analyses that do not account for endpoint multiplicity.

The consolidated financial statements, accompanying notes to the consolidated financial statements, and Management’s Discussion and Analysis for the year ended November 30, 2006, are accessible on Vasogen’s web site at www.vasogen.com and will be available on SEDAR and EDGAR.

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