Inamed Corporation Reaches Settlement of Patent Litigation with Ethicon Endo-Surgery

Business Wire, June 21, 2004

SANTA BARBARA, Calif. -- Inamed Corporation (Nasdaq:IMDC):

--Terms Include Dismissal of All Pending Litigation

--Inamed to Make a Lump Sum Payment to Ethicon

--Inamed Also Receives a Royalty-Bearing, Worldwide License to Ethicon's Gastric Banding Patent Portfolio

Inamed Corporation (Nasdaq:IMDC), a global healthcare company, today announced that the Company has resolved its patent infringement lawsuit with Ethicon Endo-Surgery, Inc. ("Ethicon") regarding various patents related to gastric banding, which Ethicon purchased from Dr. Lubomyr I. Kuzmak.

Under the terms of the settlement agreement executed effective June 21, 2004, Inamed will pay Ethicon $17,250,000 by June 26, 2004, and, pursuant to a license arrangement included in the settlement agreement, will pay royalties to Ethicon on future United States sales of the LAP-BAND(R) System, initially at 7.5%. Prior to this settlement, Inamed has been accruing a royalty on U.S. sales at 1.2%. The 7.5% royalty will be reduced to 5.5% if Ethicon is able to obtain approval from the U.S. Food and Drug Administration (FDA) for the marketing of an adjustable gastric band sometime in the future. Inamed will also pay Ethicon 3.5% on all future foreign sales of the LAP-BAND(R) System. The U.S. and international royalties payable will decrease to 2% after June 20, 2011, and all Inamed royalty obligations will expire no later than May 12, 2013. Inamed's license is to Ethicon's family of gastric banding patents which were at issue during the litigation.

Inamed will record a charge in the amount of $17,200,000, for the quarter ending June 30, 2004, to reflect the settlement payment to Ethicon and related second quarter litigation costs and expenses. This charge is also net of an accrued liability that represents royalties at a rate of 1.2% on prior U.S. sales of the LAP-BAND System, as noted above.

"We are pleased with the terms of this settlement with Ethicon. The LAP-BAND(R) System is an important product for the Company and for the public, and we are happy to put this longstanding dispute behind us. We intend to proceed with growing the market and driving acceptance of this novel technology for the many patients who are in need of a solution to their obesity-related health issues," stated Nick Teti, Chairman, President and Chief Executive Officer of Inamed.

About Inamed Corporation

Inamed (Nasdaq:IMDC) is a global healthcare company with over 25 years of experience developing, manufacturing and marketing innovative, high-quality, science-based products. Current products include breast implants for aesthetic augmentation and for reconstructive surgery; a range of dermal products to treat facial wrinkles; and minimally invasive devices for obesity intervention, including the LAP-BAND(R) System for morbid obesity. The Company's website is www.inamed.com.

Forward-Looking Statements

This press release contains, in addition to historical information, forward-looking statements regarding Inamed's intentions concerning settlement of the litigation described in this press release and future sales of the LAP-BAND(R) System. Such statements are based on management's current estimates and expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, among others, the actual timing for product shipments, the results of research and development and business development activities, competition from existing and/or new products, market acceptance of the LAP-BAND System, product liability and adverse publicity resulting therefrom, the ability to manufacture or otherwise source product to meet market demand, and the content and timing of decisions by the U.S. Food and Drug Administration and other regulatory authorities.. Readers are referred to the documents filed by Inamed with the U.S. Securities and Exchange Commission, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. Inamed is providing this information as of June 21, 2004 and expressly disclaims any duty to update information contained in this press release.

By including any information in this press release, Inamed does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material.