Artes Medical Completes $2.4 Million Private Placement

SAN DIEGO--(Business Wire)--
Artes Medical, Inc. (Nasdaq:ARTE), a medical aesthetics company,
today announced that it has completed a financing with accredited
investors raising approximately $2.4 million from a private placement
of its common stock and related warrants. Empire Asset Management
Company served as the placement agent for the transaction. The
offering was fully subscribed.

Pursuant to the financing, Artes Medical issued approximately
2,735,817 shares of common stock at a purchase price of $0.73 per
share. Artes also issued to the investors warrants to purchase an
additional 1,367,916 shares of common stock at an exercise price of
$0.75 per share. The warrants will be exercisable no sooner than six
months following the closing of the private placement and will expire
on March 26, 2014. In addition, Artes Medical issued 497,228 shares of
common stock at a purchase price of $0.8125 per share and warrants to
purchase 248,616 shares of common stock, at an exercise price of $0.75
per share, to investors who may be deemed to be affiliated with a
member of our board of directors.

"This equity financing has been completed during very difficult
and challenging times in our nation's capital markets and represents
another step forward in our plan to commercialize our products and to
seek out other strategic opportunities that are in the best interests
of our stockholders," noted Christopher J. Reinhard, Executive
Chairman of Artes Medical.

For services rendered as placement agent, Artes Medical paid
Empire a cash fee equal to 8% of the aggregate proceeds raised in the
financing and issued warrants to purchase up to 218,865 shares of
common stock at an exercise price of $0.73 per share, up to 129,322
shares of common stock at an exercise price of $0.75 and up to 39,778
shares of common stock at an exercise price of $0.8125 per share.

The securities were offered to accredited investors in reliance on
an exemption from the registration requirements of the Securities Act
of 1933, as amended. The securities have not been registered under the
Securities Act or any state securities laws and the securities may not
be offered or sold absent registration or an applicable exemption from
the registration requirements of the Securities Act and applicable
state securities laws. In connection with the financing, Artes has
agreed, subject to certain terms and conditions, to provide piggyback
registration rights with respect to the resale of the shares purchased
and the shares issuable upon exercise of the warrants. This press
release does not and will not constitute an offer to sell or the
solicitation of an offer to buy shares or warrants.

About ArteFill(R)

ArteFill is the first and only FDA-approved non-resorbable
injectable dermal filler for the correction of wrinkles known as smile
lines or nasolabial folds. The unique microspheres in ArteFill are not
absorbed by the body and therefore provide the first-of-its-kind
permanent support for long-lasting wrinkle correction in one to two
treatments.

ArteFill was approved by the FDA in October 2006 based on data
from the Company's 12-month controlled, randomized, double-masked,
multi-center U.S. clinical trial, which compared outcomes for patients
treated with ArteFill with those of patients treated with the leading
bovine collagen-based filler. At the 6-month evaluation, which was the
primary efficacy evaluation period for the clinical trial, the wrinkle
correction in patients treated with ArteFill persisted and showed
statistically significant improvement compared to the wrinkle
correction in the patients treated with the collagen control, who
returned to their pretreatment status. The ArteFill patients were also
evaluated one year after treatment, demonstrating continued safety and
wrinkle correction.

In December 2007, the Company announced that ArteFill's 5-year
safety and efficacy data was published in the peer-reviewed
publication Dermatologic Surgery "Filler Issue." This publication
addresses the robust, long-term, efficacy and safety profile of
ArteFill. This 5-year follow-up study included 145 patients who were
treated with ArteFill in the Company's U.S. clinical trial. In
addition to demonstrating the safety profile of ArteFill, the study
showed statistically significant (p less than 0.001) improvement in
patient wrinkle correction five years after the patient's last
ArteFill treatment, and a statistically significant (p=0.002)
improvement in wrinkle correction at the 5-year point compared to the
6-month evaluation period. As part of the study, physician
investigators and patients were asked to provide their assessment of
ArteFill treatment. Over 90% of the physician assessments were either
"completely successful" or "very successful;" and over 90% of the
patient assessments were either "very satisfied" or "satisfied." The
FDA is currently reviewing the data from the study in order to
determine if it will enhance the product labeling for ArteFill.

An ArteFill Skin Test is required before initial treatment. The
most common adverse events associated with ArteFill treatment, similar
to those observed with other dermal fillers, are lumpiness, persistent
swelling or redness and increased sensitivity at the injection site.

ArteFill is a proprietary formulation comprised of
polymethylmethacrylate, or PMMA, microspheres and bovine collagen, and
is the only PMMA-based injectable product that has been approved by
the FDA for the treatment of facial wrinkles. Artes Medical is the
sole manufacturer of ArteFill, which is only available in the United
States through Artes Medical, and Artes Medical has not entered into
distribution or licensing arrangements with any third party for the
distribution or sale of ArteFill, or any other PMMA-based dermal
filler, outside the United States.

About Artes Medical, Inc.

Artes Medical is a medical aesthetics company focused on
developing, manufacturing and commercializing a new category of
injectable products for the dermatology and plastic surgery markets.
The Company's flagship product, ArteFill, is being marketed to men and
women as a long-lasting treatment option for the correction of
nasolabial folds. The Company also markets Elevess(TM), the first
FDA-approved hyaluronic acid-based wrinkle filler with lidocaine for
patient comfort. Additional information about Artes Medical, ArteFill
and Elevess is available at www.artesmedical.com, www.artefill.com and
www.myelevess.com.

Forward-Looking Statements

This news release contains forward-looking statements that are
based on the Company's current beliefs and assumptions and on
information currently available to its management. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the Company's actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements. As a result of these risks, uncertainties
and other factors, which include the Company's history of net losses,
its ability to timely raise additional funds to support its
operations, its ability to manage its operating expenses, its limited
experience in commercializing ArteFill and Elevess(TM), its future
receipt of FDA approval to extend the efficacy period of ArteFill
beyond six months and eliminate the skin test requirement, and the
risk that the Company's revenue projections may prove incorrect
because of unexpected difficulty in generating sales and market
acceptance of ArteFill or Elevess(TM), readers are cautioned not to
place undue reliance on any forward-looking statements included in
this press release. A more extensive set of risks and uncertainties is
set forth in the Company's SEC filings available at www.sec.gov. These
forward-looking statements represent beliefs and assumptions only as
of the date of this news release, and the Company assumes no
obligation to update these forward-looking statements publicly, even
if new information becomes available in the future.

Artes Medical(R) and ArteFill(R) are registered trademarks of
Artes Medical, Inc. All other trademarks referred to in this press
release are the property of their respective owners.

Manning, Selvage and Lee
Kelley Childrey, 323-866-6003 (Corporate Media)
kelley.childrey@mslpr.com
or
Artes Medical, Inc.
Cheryl Monblatt Allen, 858-550-9999 (Investor Relations)
callen@artesmedical.com

Copyright Business Wire 2008