Artes Medical is a publicly traded (NASDAQ: ARTE), San Diego-based, medical technology company, focused on developing, manufacturing, and commercializing a new category of aesthetic injectable products for the dermatology and plastic surgery markets. The company's product development activities are centered around its proprietary platform technology and formulations of precision-filtered injectable synthetic microspheres made of polymethylmethacrylate (PMMA) suspended in purified bovine collagen gel.

ArteFill®. The First To Last™.

     Our lead product, ArteFill, received final FDA approval in October 2006. ArteFill is a non-resorbable aesthetic injectable implant for the treatment of facial wrinkles known as nasolabial folds or smile lines. Unlike temporary muscle paralytics and temporary dermal fillers, which are comprised of materials that are readily metabolized and absorbed by the body, ArteFill uses a proprietary combination of polymethylmethacrylate, or PMMA, microspheres and purified bovine collagen. Following injection, the PMMA microspheres in ArteFill remain intact at the injection site and provide a structure to support the wrinkle and help prevent further wrinkling. ArteFill will be marketed primarily to dermatologists, plastic surgeons, and cosmetic surgeons.

ArteFill is a unique combination of:

• ArteFill Precision-Filtered Microspheres™ (PMMA) that have uniformly round and smooth surfaces and consistent diameters of 30 to 50 microns (20% of total volume).

• ArteFill Purified Bovine Collagen™ gel containing 3.5% collagen (80% of total volume) and 0.3% lidocaine (to alleviate discomfort during injection).

Company History

Artes Medical is a Medical Technology Company

     Artes Medical was founded in August 1999 to develop and commercialize products based upon a platform technology in the field of soft tissue augmentation invented by Gottfried H. Lemperle, MD, PhD, and Martin Lemperle, MD. Professor Gottfried Lemperle is an internationally renowned opinion leader in plastic surgery and former head of the Division of Plastic and Reconstructive Surgery at the University of Frankfurt/Main, Germany. In 1998, Professor Lemperle relocated from Germany to San Diego, California, to devote his time to research and development in the field of injectable soft tissue augmentation.

     In September 2001, the company's U.S. clinical trials for ArteFill were successfully completed, demonstrating the safety and efficacy of ArteFill compared to a bovine collagen control (Zyderm®/Zyplast®). On February 28, 2003, an expert advisory panel to the FDA recommended that  ArteFill be considered approvable as a permanent treatment for facial wrinkles and other soft tissue contour deficiencies of comparable size, such as acne and traumatic scars. On January 16, 2004, the FDA issued an approvable letter for the ArteFill premarket approval application (PMA). In October 2006, the FDA issued final approval for ArteFill for the treatment of nasolabial folds.

     We have established a 35,000 sq ft current good manufacturing practices (cGMP) dedicated manufacturing facility and corporate headquarters in San Diego, where ArteFill is produced. The facility has been determined to be in compliance with both the FDA's Quality System Regulations and ISO 13485. This facility is key to our strategy to consolidate our manufacturing processes to support a worldwide ArteFill market. It is anticipated that this dedicated processing facility will be capable of supporting our manufacturing, distribution, and product development requirements for the foreseeable future. We intend to explore applications of our proprietary combination of precision-filtered microspheres and purified bovine collagen gel technology for other medical indications through collaborative arrangements with strategic partners.

      In January 2006, we received a quality system certificate demonstrating compliance with ISO 13485:2003, the internationally recognized quality system standard for medical device manufacturers. The ISO certificate is the first step toward demonstrating compliance with appropriate medical device regulatory and statutory requirements for receipt of the CE mark in the European Union and for marketing approval in Canada.

Technology

Permanent Injectables for Soft Tissue Augmentation

     Artes Medical holds U.S. and International patents to protect its unique permanent injectable technology. Our product development focus is centered around our proprietary platform technology and formulations of injectable purified bovine collagen gel with synthetic precision-filtered microspheres. We believe these microspheres may have wide-ranging applications as permanent injectable treatments that provide a permanent matrix for an enduring effect. Our lead product, ArteFill, has been developed for the dermatology, plastic surgery and cosmetic surgery markets.

Technology Platform

     The ideal substance for the lasting treatment of wrinkles, scars, and other soft tissue defects is one that is biocompatible and safe, is stable at the implantation site, keeps its volume and remains pliable, does not cause protrusion of the skin or mucosa, will not be removed by phagocytosis, has no migration potential to distant locations, and does not cause foreign body reactions. Our proprietary platform technology consists of permanent soft tissue fillers based on injectable, uniformly spherical, and smooth microspheres produced from inert biomaterials (U.S. Patent No. 5,344,452) suspended in bovine collagen gel and 0.3% lidocaine to alleviate discomfort during injection.

Microspheres

     Polymethylmethacrylate (PMMA), in use since 1945, is one of the most widely used artificial materials in implantable medical devices. The size, shape, and smoothness of the microspheres are important to ensure the product's biocompatibility. The 30 to 50 micron diameter size used in ArteFill has been determined to be the optimal range because, at this size, microspheres are large enough to escape phagocytosis but small enough to be injected through a fine, 26-gauge needle and are able to create a support matrix for the collagen fibers of the deep dermal layer. All PMMA microspheres in ArteFill undergo a proprietary process to yield precision-filtered microspheres that meet FDA quality standards: the desired size, smoothness and spherical shape, and free of nanoparticle impurities, in order to prevent foreign body reaction. In studies to assess the body's cellular response toward various implant shapes, spherical implants were found to initiate the least response compared to more irregular shapes.

ArteFill PMMA Microspheres

Collagen

     Bovine collagen has been used by plastic surgeons and dermatologists to treat wrinkles and scars for over 20 years. To ensure both safety and quality, we use a proprietary manufacturing process to produce purified bovine collagen from calf hides obtained from a closed herd in the U.S. In our product formulations, purified collagen gel is the carrier substance that prevents the microspheres from clumping together.