Proposed Equity Offering

Aortech International PLC
12 February 2001

Not for release, publication or distribution in, or into, the United States,
Australia, Canada or Japan or to US Persons.


                          AORTECH INTERNATIONAL PLC

   FIRST SALES OF TRUCCOMS ACHIEVED, CONTINUED PROGRESS IN ALL TECHNOLOGIES
                    LAUNCH OF PROPOSED EQUITY OFFERING AND
                   APPLICATION TO MOVE TO THE OFFICIAL LIST


AorTech International plc ('AorTech' or the 'Company'), the Scottish-based
developer and manufacturer of cardio-vascular devices and biomaterials, today
announces details of its proposed equity offering (the 'Offers') and
application for its share capital to be admitted to the Official List.


Operational Highlights

  * First Elast-Eon licence and material supply agreement announced last
    week with JOMED N.V., a European cardiovascular device company, to use the
    biomaterial in stents for a term of 15 years. Other major medical device
    companies continue to evaluate the Elast-Eon biomaterial.
  * Sales of truCCOMS have commenced.
  * A number of papers have been accepted for presentation at the American
    Society for Biomaterials Conference in late April 2001 confirming that
    there is no evidence of biodegradation after explanting the new synthetic
    tri-leaflet heart valves from in vivo trials and also confirming the
    excellent biostability properties of Elast-Eon.
  * Successful accelerated laboratory durability testing for the new
    synthetic tri-leaflet heart valve, which will enter its regulatory testing
    phase in the first half of 2001.
  * New cleanroom facilities and extended production capacity established in
    Australia in anticipation of increased production of Elast-Eon both for
    the new synthetic tri-leaflet heart valve and for other purposes.
  * Jonathan Brooks, the Chief Financial Officer of ARM Holdings plc, the
    FTSE 100 Index technology company, joins the Board as a Non-Executive
    Director with effect from today.

Offers Highlights

  * The Offers are intended to raise up to approximately £64 million (before
    expenses) for the Company to further fund the development and marketing of
    AorTech's innovative technologies and to secure a greater global presence
    in the Company's target markets.
  * Morgan Stanley Securities Limited is global co-ordinator and sole
    bookrunner to the equity offering and Morgan Stanley & Co. International
    Limited is sponsor to the application to list AorTech's share capital on
    the Official List of the UK Listing Authority and is global financial
    adviser to AorTech.
  * The Offers comprise an Open Offer to Qualifying Shareholders of New
    Ordinary Shares, on a pro-rata basis, and an International Offering of New
    Ordinary Shares and existing Ordinary Shares.
  * The Offer Price, which applies to both the Open Offer and the
    International Offering, will be determined at the end of a book-building
    process and is expected to be announced on or around 8 March 2001.
  * Up to £12 million (before expenses) of existing Ordinary Shares will be
    offered for sale at the Offer Price in the International Offering, which
    includes up to £2 million each of existing Ordinary Shares being sold by
    companies owned by trusts of which Gordon Wright and Edward McDaid are
    beneficiaries and up to £8 million of existing Ordinary Shares being sold
    by 3i Group plc.
  * The Selling Shareholders and the Company have granted an Over-Allotment
    Option to Morgan Stanley Securities Limited over up to £11.4 million of
    existing and New Ordinary Shares at the Offer Price.
  * The Offers are conditional, inter alia, on shareholder approval at an
    EGM to be held by AorTech on 7 March 2001.
  * Following the close of the Offers, all of the Company's Ordinary Shares
    are expected to be admitted to the Official List of the UK Listing
    Authority, on or around 13 March 2001.


Edward McDaid, Chief Executive Officer, said


'This is an exciting time in the development of AorTech. We presently have the
opportunity to become a leading global provider of cardiac output monitoring
through truCCOMS and the world's leading heart valve company through our new
synthetic tri-leaflet heart valve. Following the acquisition of Elastomedic,
there are significant new opportunities for AorTech as we believe that
Elast-Eon will become the synthetic biomaterial of choice for manufacturers
and developers of a wide range of implantable medical devices. I am confident
that the licence to be granted under agreement with JOMED will be the first of
a number of licences which will be granted in the future.'


Gordon Wright, Chairman, said


'This fund-raising will take us to the next stage in the development of our
exciting and innovative new technologies and will help us achieve our goal of
becoming a global leader in our target markets. The simultaneous move to the
Official List will further promote awareness of AorTech's name and
technologies in the global cardio-vascular devices market.'


'I am also delighted to be able to welcome Jonathan Brooks to our Board, whose
considerable experience will add substantial value to AorTech going forward.'


There will be an analysts' meeting on Monday, 12 February at 2.30 p.m. at the
offices of College Hill, 78 Cannon Street, London, EC4N 6HH.

                                                              12 February 2001
ENQUIRIES:
AorTech International plc                         Tel: [phone]
Edward McDaid, Chief Executive Officer

Morgan Stanley & Co. International Limited        Tel: [phone]
Alex Northcott / Chris Snoxall / Laura Howard

College Hill                                      Tel: [phone]
Michael Padley / Nicholas Nelson


                    LAUNCH OF PROPOSED EQUITY OFFERING AND
                   APPLICATION TO MOVE TO THE OFFICIAL LIST


Introduction


AorTech International plc ('AorTech' or the 'Company') today announces that it
intends to raise up to £64 million (before expenses) by way of an equity
offering. The offering comprises an Open Offer to Qualifying Shareholders of
New Ordinary Shares, and an International Offering of New Ordinary Shares and
existing Ordinary Shares (the 'Offers') to institutional investors in the
United Kingdom, the United States and elsewhere. Qualifying Shareholders are
being invited to apply on a pro-rata basis for the New Ordinary Shares being
offered in the Open Offer.


All of the New Ordinary Shares comprised in the Offers will be issued at the
Offer Price, which will be determined following a book-building process at the
end of the International Offering. Following the closing of the Offers, all of
the existing Ordinary Shares and New Ordinary Shares are expected to be
admitted to the Official List of the UK Listing Authority, on or around 13
March 2001.


Morgan Stanley Securities Limited is global co-ordinator and sole bookrunner
to the Offers and Morgan Stanley & Co. International Limited is sponsor in
connection with AorTech's application to list its share capital on the
Official List of the UK Listing Authority and global financial adviser to
AorTech.


In addition to the issue of New Ordinary Shares by the Company pursuant to the
Offers, the Selling Shareholders will also offer for sale in the International
Offering up to £12 million (before expenses) of existing Ordinary Shares (the
'Sale Shares') at the Offer Price.


The Selling Shareholders and the Company and have granted an Over-Allotment
Option to Morgan Stanley Securities Limited over up to £11.4 million of
existing and New Ordinary Shares at the Offer Price.


The Group has acquired and developed three new, innovative technologies:

  * truCCOMS, a new continuous cardiac output monitoring system of which
    AorTech made its first sales in January 2001;
  * Elast-Eon, a new biomaterial from which the new synthetic tri-leaflet
    heart valve is made and which AorTech believes could be used in a wide
    range of other implantable medical devices (on 31 January 2001 AorTech
    announced its first licence agreement for Elast-Eon with JOMED N.V.); and
  * a new synthetic tri-leaflet heart valve which is expected to commence
    its regulatory testing phase in the first half of 2001.


The net proceeds of the Offers will enable AorTech to fund the development and
expansion of its business, develop and expand its range of technologies and
extend this range into new areas where they are not currently being used.


TruCCOMS: Status and Business Strategy


The features of truCCOMS, particularly its ability to provide a virtually
immediate response to changes in cardiac output, has resulted in significant
interest in the system from physicians and distributors. The first sales of
truCCOMS were made in January 2001, following earlier approvals from European
and US regulatory authorities.


As part of its strategy to fully exploit the truCCOMS technology and to
achieve significant market penetration, AorTech has commenced clinical studies
on patients at various centres in Europe and the US to: (i) demonstrate the
superiority of the truCCOMS method of measuring cardiac output compared with
other available methods and (ii) to promote the potential for its use in
cardiac and non-cardiac patients in operating theatres and intensive care
units. It is intended that the results of these clinical studies will be
published in scientific journals and be presented at medical conferences
during the next twelve months.


Marketing Strategy


TruCCOMS is in its initial marketing phase, and AorTech has recruited clinical
specialists and sales personnel in both Europe and the US to initiate sales in
selected centres.


TruCCOMS is the first product of the Group that will be marketed and sold in
the US. As part of its strategy to expand into the US, AorTech has established
an office in Michigan, headed by Bruno Lowinger, together with a warehousing
facility. AorTech is presently reviewing several options in respect of the
future expansion of its marketing and sales through a combination of direct
sales and appointment of selected distributors and will recruit further staff
for its direct sales force. AorTech will also explore the possibility of
appointing a major medical device company as distributor in one or more
territories.


Future Development Work


The Directors aim to develop the truCCOMS technology further in the short and
medium term by:

  * adding SVO2 (venous oxygen saturation) monitoring capabilities, which
    most traditional invasive techniques are able to offer;
  * reducing the size of the truCATH catheter to enable the system to be
    used to monitor the cardiac output of children and neonatal patients. This
    would be a major breakthrough in the care of such patients since current
    cardiac output monitoring systems, due to the size of the PA catheters
    available, can only be used in adults; and
  * integrating the monitoring system with existing operating room and
    intensive care unit monitoring systems.

A study will commence in February 2001 at Papworth Hospital in Cambridge (UK)
to determine whether the truCCOMS technology can be integrated into
angioplasty procedures, to determine the effectiveness of these procedures by
monitoring cardiac output whilst the procedure is carried out.


Regulatory Approvals in Asia and Australasia


AorTech intends to obtain approvals from regulatory authorities in Asian
countries (including Japan, China, India and South Korea), Australia and New
Zealand, so as to be able to sell truCCOMS in those markets. Approvals are
expected to be obtained during 2001.


Elast-Eon: Development Status and Business Strategy


The acquisition in March 2000 of Elastomedic, together with the intellectual
property relating to Elast-Eon, represented a major strategic step for the
Group in the biomaterials field. Due to the high degree of flexibility and
biostability of Elast-Eon, AorTech is using this material in the development
of its new synthetic tri-leaflet heart valve. With the excellent performance
that Elast-Eon is showing in the new synthetic tri-leaflet heart valve, the
Directors believe that Elast-Eon will have a wide variety of other uses in
implantable medical devices. On 31 January 2001, AorTech announced that it had
entered into an agreement with JOMED N.V., a leading European cardiovascular
company, to grant a licence of rights over and supply Elast-Eon (see
'Licensing' below).


AorTech intends to fully exploit the market opportunities arising from
ownership of the rights to Elast-Eon through licensing the rights to third
parties and, in the long term, through the development of new products by
AorTech itself (including the new synthetic tri-leaflet heart valve).
According to the 2000 edition of Clinica Reports on New Developments in
Biomaterials (PJB Publications), the global market for biomaterial based
products was US$18 billion in 1998, and was expected to grow at approximately
12 per cent per annum.


A number of papers have been accepted for presentation at the American
Association for Biomaterials Conference to be held in St Paul, Minnesota (US)
between 24 and 29 April 2001. Four papers confirm that: Elast-Eon's
performance is better than other polyurethanes after sterilisation;
Elast-Eon's biostability is applicable in a broad range of implant
technologies; and soft grade Elast-Eon exhibits better biostability than
comparable grades of polyurethanes.


The JOMED agreement for the licence of rights over and supply of Elast-Eon,
combined with the conclusions from these papers, demonstrate the excellent
progress that AorTech is making in developing and commercialising its
Elast-Eon biomaterials.


AorTech has added new cleanroom facilities and extended its manufacturing
capacity in Australia in anticipation of increased production of Elast-Eon for
both the new synthetic tri-leaflet heart valve and other purposes.


Licensing


On 31 January 2001, AorTech announced that it had entered into an agreement to
grant a licence of rights over and to supply Elast-Eon to JOMED N.V., a
leading European manufacturer of medical devices for vascular intervention.
This agreement is for a 15 year licence and JOMED N.V. has committed to
develop a stent using Elast-Eon with regulatory approval in Europe and the
USA.


This represents the first agreement to grant a licence secured by AorTech
following the material evaluation agreements which the Company has in place
with a significant number of major medical device companies. These companies
are evaluating the use of Elast-Eon in their existing and developing product
areas. AorTech expects to enter into further licensing and supply agreements
with medical device companies, and will consider providing components
manufactured from Elast-Eon to its licensees. The Directors believe that
Elast-Eon has the potential to yield an additional revenue stream from
licensing fees arising from the commercialisation of products by other medical
device companies.


Development by AorTech of its own new products using Elast-Eon


In the medium to long term, the Directors believe that AorTech will maximise
shareholder value by developing Elast-Eon for further products based on its
existing technologies, and for any innovative new implantable medical products
that AorTech may develop in the future. These may include stentless and
percutaneous valves, as well as short and long-term catheters.


Marketing


During 2001, AorTech will participate in a number of international
conferences, including the Australian and the American Society of Biomaterials
conferences. AorTech intends to promote brand recognition by combining the
marketing of its existing and new products with the marketing of Elast-Eon.


Future development work on Elast-Eon


AorTech intends to develop new variations of Elast-Eon with more specialised
characteristics thereby adding to the range of potential applications for
Elast-Eon. Such characteristics include: increased resistance to degradation
in certain environments, permitting the material to be used in devices in the
urinary system; moisture and gas permeability, enabling use of the material in
wound dressings; and increased flexibility and softness, which produces a
material which could be substituted for silicone in cosmetic implants.


New Synthetic tri-leaflet Heart Valve: Development Status and Business
Strategy


The Directors continue to be encouraged by the progress made on the new
synthetic tri-leaflet heart valve believing that it offers considerable
potential for improvement over the hydrodynamic, haemodynamic and
biomechanical performance of existing replacement heart valves. They believe
that the new synthetic tri-leaflet heart valve is the next generation heart
valve which could overcome the disadvantages inherent in mechanical and tissue
heart valves.


Pre-Regulatory Testing Phase


The new synthetic tri-leaflet heart valve has been undergoing laboratory and
animal tests since November 1999, including accelerated durability testing
using the same testing conditions and requirements to which mechanical valves
are subject. Some versions of the valve have achieved in excess of 600 million
cycles in laboratory testing, which is equivalent to approximately 15 years
life as a human implant.


In order to achieve regulatory approval, the laboratory and animal testing
already completed by the Company will need to be repeated in accordance with
testing protocols agreed between AorTech and the relevant European and US
regulatory authorities.


The tests carried out by AorTech in the pre-regulatory testing phase have
shown that the valve has better durability than that required for tissue
valves, which have to achieve 280 million cycles (equivalent to 7 years life
as a human implant) in order to obtain European regulatory approval. The
durability level has also exceeded that which will be required by European
regulatory authorities for mechanical valves (380 million cycles, equivalent
to 10 years life as a human implant) and has now reached the durability level
that will be required by US regulatory authorities for mechanical valves (600
million cycles, equivalent to 15 years life as a human implant).


Regulatory Testing Phase


The regulatory testing phase is expected to commence in the first half of 2001
with laboratory and animal testing and will be undertaken in line with
relevant European and US regulatory requirements. The laboratory tests will
again include haemodynamic, biocompatibility and pressure tests, as well as
accelerated durability testing. Animal tests will be conducted in juvenile
sheep. As US regulatory authorities will prefer US data, the Company will
carry out the regulatory testing in the US which will meet both European and
US regulatory requirements. The animal tests are expected to be concluded in
the second half of 2001.


The durability tests will take approximately one year to meet European
regulatory requirements (380 million cycles) and one and a half years to
achieve US regulatory requirements (600 million cycles).


Following completion of the laboratory and animal tests, human clinical trials
will commence in Europe and the US. Clinical trials are expected to start in
the first half of 2002 in up to ten centres in Europe, with testing in the US,
again in up to ten sites, expected to begin at the end of 2002. The human
trials will last for a minimum of two years in Europe and four years in the
US.


Following the results of the human trials, applications will be made for
European and US regulatory approvals. The Directors are aiming to obtain
European regulatory approval in early 2005 with US approval expected in the
first half of 2007.


Future Development Work


The Directors believe that the new synthetic tri-leaflet valve will lead to
the development of other synthetic heart valves by AorTech, including a
stentless synthetic heart valve based on the stented tri-leaflet heart valve.
There is a belief among some surgeons that stentless valves have a lower
potential for thromboembolism than stented valves. This has resulted in the
increasing use of stentless tissue valves (such as AorTech's Elan) in
preference to stented tissue valves.


Further development work may include a flexible synthetic valve which, by
being 'folded' into a cathether and inserted into a patient percutaneously,
could avoid the need for open heart surgery.

Use of Proceeds


The net proceeds of the Offers are intended for the following purposes:


TruCCOMS:

  * to fund work to develop and find new applications for the truCCOMS
    technology, including the addition of SVO2 measurement capabilities,
    miniaturisation of the catheter to allow, for the first time, cardiac
    output monitoring in children and neonatal patients, integration of the
    technology with other monitoring systems currently existing in hospitals,
    and integration of the truCCOMS technology into angioplasty techniques;
  * to fund clinical studies and other marketing activities in relation to
    other applications of the truCCOMS technology;
  * to fund the recruitment of additional sales personnel and clinical
    specialists and the expansion of the Group's facilities in the US; and
  * to fund the Group's additional working capital and capital expenditure
    requirements arising from increased sales of truCCOMS, including
    additional cleanroom and manufacturing facilities in the UK.

The Directors estimate that truCCOMS will require additional funding of
approximately £13 million to £16 million.


Elast-Eon:

  * to undertake ongoing developmental work on the Elast-Eon materials to
    produce variations with different properties and characteristics,
    including the costs of additional staff to carry out such work;
  * to fund promotion of existing and new variations of Elast-Eon as a
    superior biomaterial for use in implantable medical devices;
  * to enable AorTech to undertake tests and evaluations of certain variants
    of Elast-Eon with a view to developing new medical devices, such as a
    small bore vascular graft; and
  * to fund the Group's additional working capital and capital expenditure
    requirements arising from increased production of Elast-Eon materials.

The Directors estimate that Elast-Eon will require additional funding of
approximately £13 million.


New synthetic tri-leaflet heart valve:

  * to fund further development work on synthetic heart valves (for example,
    a synthetic stentless heart valve and a valve that is able to be inserted
    percutaneously without the need for open heart surgery), together with
    laboratory and animal testing on any resulting products;
  * to fund pre-marketing activities, including clinical studies in Europe
    for the new synthetic tri-leaflet valve after obtaining European
    regulatory approval; and
  * to fund the completion of clinical trials in the US.

The Directors estimate that the new synthetic tri-leaflet heart valve will
require additional funding of approximately £10 million to £12 million.

Acquisitions and strategic partnerships:


To provide flexibility to finance potential acquisitions or strategic
partnerships with a view to developing other innovative technologies or adding
to the Group's distribution, sales and/or marketing capabilities. The Company
is not currently in negotiation with any third party regarding any acquisition
or strategic partnership.


The application of the net proceeds described above represents the Directors'
current plans only, and the final application of the proceeds may be
influenced by factors, some of which may be outside the control of the Group,
including the market acceptance of its new products.


Board Appointment


AorTech is pleased to announce that with effect from today, Jonathan Brooks
will join the Board as a non-executive director. Jonathan is the Chief
Financial Officer of ARM Holdings plc, the FTSE 100 Index technology company,
a role he has held since joining ARM in 1995. Jonathan co-ordinated ARM's
flotation on the London Stock Exchange and NASDAQ in 1998. At ARM he is
responsible for the finance, investor relations, IT and administration
functions of the group. Between 1989 and 1995 he held various finance roles in
subsidiaries of Accor Group Group S.A.


Jonathan's experience will add considerable value to AorTech and the Directors
are delighted to welcome him onto the Board.


AorTech intends to appoint an additional non-executive director during 2001.


Current Trading and Prospects


The Company's interim results for the six months ended 30 September 2000 were
published on 15 December 2000. The results showed a modest increase in
revenues from established products compared to the corresponding period in the
previous financial year. Although revenues since 30 September 2000 have shown
a slight decrease compared with the corresponding period of the period year,
in line with previous years the Directors expect stronger revenues from sales
of established products (particularly from the Elan stentless valve as a
result of the trend away from the use of stented towards stentless valves) in
the second half of the current financial year.


The Company has now made its first sales of truCCOMS which will also make a
contribution in the current financial year. Looking forward, the Directors
believe that truCCOMS will be the major contributor to the Group's revenues in
the short to medium term.


AorTech's development expenditure will increase over the next few years, in
order to continue the significant progress that the Group has made with its
new products. Substantial resources will be committed to further product
development, finding new applications for truCCOMS and Elast-Eon, as well as
animal and laboratory tests and human clinical trials for the new synthetic
tri-leaflet heart valve.


With the significant opportunities that exist for the Group's new products,
the development and leveraging of its technologies into new areas, and its
expansion into new markets, the Directors are confident that the future
prospects for the Group are very exciting.


Reasons for Admission to the Official List


The listing of the Company's share capital on the Official List will
facilitate the equity fund-raising. The Directors also believe that the
listing will:

  * raise the Company's general profile and status domestically and
    internationally;
  * assist in recruiting, incentivising and retaining skilled professional
    staff as a result of the increased marketability of the Company's Ordinary
    Shares;
  * enhance the Company's ability to make future acquisitions by providing a
    more liquid acquisition currency;
  * extend the financial research coverage of the Company, providing
    additional visibility which should assist in improving liquidity for the
    Company's Ordinary Shares; and
  * enable the Company to access a wider range of domestic and international
    investors.


The Open Offer


The Company is inviting Qualifying Shareholders to apply on a pre-emptive
basis for £65.5 million of New Ordinary Shares at the Offer Price under the
Open Offer. This represents an aggregate of:

  * £64 million, being the maximum amount (before expenses) which the
    Company proposes to raise by the issue of New Ordinary Shares pursuant to
    the Offers; and
  * £1.5 million, being the estimated amount (before expenses) which the
    Company would raise by the issue of New Ordinary Shares if the
    Over-Allotment Option is exercised in full (on the basis set out in
    'Over-Allotment Option' below).

As the Offer Price will be determined at the end of the International
Offering, Qualifying Shareholders are being invited to specify a cash amount
to be applied in subscribing for New Ordinary Shares in the Open Offer,
subject to a maximum amount for each Qualifying Shareholder (the 'Maximum Cash
Amount'). The Maximum Cash Amount is dependent upon the number of Ordinary
Shares held by the Qualifying Shareholder on 5 February 2001 (the 'Record
Date').


Qualifying Shareholders will not be able to specify a fixed number of New
Ordinary Shares for which they wish to subscribe. However, they will be
permitted to specify a price per New Ordinary Share above which they do not
wish to subscribe.


The procedure for Qualifying Shareholders to apply for New Ordinary Shares in
the Open Offer will be set out in the circular being sent today to Qualifying
Shareholders and the accompanying Application Form. The latest time for
receipt of Application Forms and payment in full in respect of the Open Offer
is 3 p.m. on 7 March 2001. Application Forms are personal to Qualifying
Shareholders and may not be transferred, except to satisfy bona fide market
claims.


AorTech and Morgan Stanley Securities Limited reserve the right to reduce the
size of the Offers at their absolute discretion, but will not proceed with the
Offers in circumstances where the aggregate amount raised by the issue of New
Ordinary Shares, after estimated expenses, would be less than £25 million. If
the size of the Offers is reduced, applications by Qualifying Shareholders in
the Open Offer will remain valid, but may be subject to a pro-rata reduction.


Intentions of the Directors (including Caricature and Melody) under the Open
Offer


Caricature Investments Limited (a company associated with Gordon Wright,
Chairman of AorTech) and Melody Investments Limited (a company associated with
Edward McDaid, Chief Executive Officer of AorTech) have undertaken not to take
up their pre-emptive entitlements under the Open Offer. These represent 29.1
per cent of the New Ordinary Shares being offered under the Offers. Alistair
Gray and Francis Madden intend to apply for all of their entitlements under
the Open Offer and David Williams intends to apply for part of his
entitlement. The other Directors do not intend to apply for their pre-emptive
entitlements under the Open Offer.


The International Offering


All of the New Ordinary Shares not taken up by Qualifying Shareholders under
the Open Offer, including those that would have been offered on a pre-emptive
basis to the Overseas Shareholders had the Open Offer been extended to them,
together with all of the Sale Shares (see below), will be made available in
the International Offering at the Offer Price to prospective institutional
investors in the United Kingdom and elsewhere.


The Offer Price


The Offer Price, which will apply to all applications for Ordinary Shares in
the Open Offer and the International Offering, will be determined by the
Company, Morgan Stanley Securities Limited and the Selling Shareholders
following a book-building process at the end of the International Offering. It
is expected that the Offer Price and the number of New Ordinary Shares to be
issued in the Offers will be determined and announced on or about 8 March
2001.


No price range has been or will be published either in the prospectus or
otherwise in connection with the Offers. However, the Offers will not proceed
if the Board and Morgan Stanley Securities Limited decide that the price
established by the book-building process is inappropriate.


In determining the Offer Price, the Board and Morgan Stanley Securities
Limited will have regard to, inter alia, the level of demand from Qualifying
Shareholders in the Open Offer and from prospective investors in the
International Offering, prevailing market conditions, and the desire to create
a strong aftermarket on the London Stock Exchange for the Company's shares
following completion of the Offers.


The Sale Shares


Up to £12 million (before expenses and assuming no exercise of the
Over-Allotment Option) of existing Ordinary Shares will be offered for sale in
the International Offering at the Offer Price (the 'Sale Shares'). This
includes:

  * up to £8 million (before expenses) being made available by 3i Group plc;
    and
  * up to £2 million each (before expenses) being offered by companies
    associated with Gordon Wright (Caricature Investments Limited) and Edward
    McDaid (Melody Investments Limited).

In addition, 3i Group plc has granted an Over-Allotment Option to Morgan
Stanley Securities Limited over up to £2 million of existing Ordinary Shares
at the Offer Price.


Caricature and Melody have also granted an Over-Allotment Option to Morgan
Stanley Securities Limited over existing Ordinary Shares at the Offer Price,
such that the aggregate of

  * the number of existing Ordinary Shares sold by Caricature and Melody
    under the International Offering and
  * the number of existing Ordinary Shares of Caricature and Melody in
    respect of which Morgan Stanley Securities Limited may exercise the
    Over-Allotment Option


does not exceed 20 per cent. (in the case of Caricature) and 15 per cent. (in
the case of Melody) of the number of existing Ordinary Shares held by them
respectively at 12 February 2001.


Based on an indicative Offer Price of 772.5p (being the closing market price
of the Ordinary Shares on 9 February 2001, the latest practicable date prior
to the announcement of the Offers) the value of the existing Ordinary Shares
over which Caricature and Melody have granted an Over-Allotment Option would
be approximately up to £4.9 million and up to £3 million respectively. The
actual values will depend on the Offer Price, which will be determined
following a book-building process at the end of the International Offering.


Over-Allotment Option and Stabilisation


In connection with the Offers, Morgan Stanley Securities Limited or its
affiliates may over-allot or effect transactions which stabilise or maintain
the market price of the Ordinary Shares, in each case at levels which might
not otherwise prevail in the open market. Such transactions may be effected on
the London Stock Exchange (including AIM), LIFFE, the over-the-counter market
or otherwise. Such stabilising, if commenced, may be discontinued at any time.


The Company and the Selling Shareholders have granted Morgan Stanley
Securities Limited an Over-Allotment Option (exercisable from the date the
Offer Price is announced until 30 days after the date of Admission) to procure
subscribers or purchasers for, or, itself to subscribe for or purchase, such
number of existing and New Ordinary Shares as, in aggregate, comprise up to 15
per cent. of the aggregate number of existing and New Ordinary Shares which
will be comprised in the Offers (excluding any such shares issued or sold
pursuant to the Over-Allotment Option), in each case to cover over-allotments,
if any, made in connection with the International Offering and to cover short
positions resulting from stabilisation transactions.


The Over-Allotment Option granted to Morgan Stanley Securities Limited, in
respect of existing and New Ordinary Shares with an aggregate value of up to £
11.4 million (before expenses) at the Offer Price comprises (on the basis of
the assumptions described in paragraph 5 above):

  * existing Ordinary Shares from 3i Group plc with a value of up to £2
    million (before expenses) and from Caricature and Melody with an aggregate
    approximate value of up to £7.9 million (before expenses); and
  * New Ordinary Shares with a value of up to £1.5 million (before
    expenses), being the total of existing and New Ordinary Shares with a
    value of up to £11.4 million less the amounts referred to in (i) above.


The actual maximum value of existing Ordinary Shares of Caricature and Melody
which are subject to the Over-Allotment Option and the actual maximum value of
New Ordinary Shares which are subject to the Over-Allotment Option will depend
on the Offer Price, which will be determined following a book-building process
at the end of the International Offering.


Lock-Up Arrangements


The Directors, Caricature and Melody have agreed, pursuant to the Subscription
Agreement, not to dispose of their Ordinary Shares and the Company has agreed
not to issue Ordinary Shares for a period of one year following Admission,
except (a) in certain specified circumstances (b) with the prior written
consent of Morgan Stanley Securities Limited or (c) pursuant to the
Subscription Agreement, the Offers or the Over-Allotment Option.


3i Group plc has agreed, pursuant to the Subscription Agreement, not to
dispose of its Ordinary Shares for a period of three months following
Admission, except (a) in certain specified circumstances (b) with the prior
written consent of Morgan Stanley Securities Limited or (c) pursuant to the
Subscription Agreement, the Offers or the Over-Allotment Option.


Extraordinary General Meeting


The Offers and admission of AorTech's Ordinary Shares to the Official List are
conditional, inter alia, on shareholder approval at an extraordinary general
meeting. The EGM will be held at 10 a.m. on 7 March 2001 at the offices of
College Hill, 78 Cannon Street, London, EC4N 6HH. A circular containing the
notice of the EGM is being sent to Qualifying Shareholders today.


Reasons For The Structure Of The Offers


The Board believes that the offering structure outlined above is in the best
interests of the Company and shareholders as a whole for the following
reasons:

  * it accords with international market practice for equity fund-raisings,
    whilst retaining pre-emptive entitlements of Qualifying Shareholders by
    enabling them to subscribe at the Offer Price on a pro rata basis for New
    Ordinary Shares; and
  * it enables the Company to market the Company's shares actively to new
    institutional investors (including in the United States) and to set the
    Offer Price at a level determined in a competitive book-building process.


Expected Timetable Of Principal Events

EVENT                                                              TIMING (GMT)
                                                                           2001
Record Date for the Open Offer                                Close of business
                                                                  on 5 February
Existing Ordinary Shares trade ex-entitlement                  From 12 February
Circular, Prospectus and Application Forms sent to                  12 February
Qualifying shareholders
Latest time for receipt of Forms of Proxy for the EGM        10 a.m. on 5 March
Latest time for splitting Application Forms (to satisfy       3 p.m. on 5 March
bona fide market claims only)
EGM                                                          10 a.m. on 7 March
Latest time for receipt of completed Application Forms and    3 p.m. on 7 March
payment in full under the Open Offer
International Offering book-building closes                             7 March
Announcement of the Offer Price and allocations                         8 March
Admission and commencement of dealings on the Official List            13 March
and CREST members accounts credited
Date of despatch of definitive share certificates and               By 14 March
refund cheques (where appropriate)


All defined terms in this announcement are the same as in the circular and
prospectus being sent to Qualifying shareholders today.


Notes For Editors


AorTech's History


AorTech is a medical devices and biomaterials business based in Scotland with
a focus on cardiovascular treatment and monitoring. The Company was founded in
November 1992 by its Chairman (Gordon Wright) and its Chief Executive Officer
(Edward McDaid) who, collectively, have over 40 years of experience in the
medical devices industry. The Company has been quoted on AIM since 1997.


The principal revenue generating activity of AorTech is presently the
manufacturing and distribution of replacement heart valves sold mainly in the
UK and Europe. Its current product range comprises the Ultracor mechanical
heart valve; the Aspire stented and the Elan stentless tissue valves; and MRS,
a mitral valve repair system (or annuloplasty ring). In addition to
manufacturing its own products, AorTech also provides manufacturing and
sub-assembly services to third parties, including the manufacture of the
Beta-Cath catheter for Novoste Corporation Inc. and Permacol sheets for Tissue
Science Laboratories (UK) Limited. In the financial year ended 31 March 2000,
the Group generated revenues of £3.5 million and incurred pre and post-tax
losses of £1.8 million.


AorTech's New Products


The Group has acquired and developed innovative technologies which it has used
to develop three new products. The Directors believe that these products will
overcome some of the shortcomings of currently available replacement heart
valves, biomaterials and cardiac output monitoring techniques, and that they
will assist in the global expansion of the Group's business. The Group's new
products comprise:


New synthetic tri-leaflet heart valve


The new synthetic tri-leaflet heart valve represents what the Directors
consider to be the first major advancement in the heart valve replacement
market for 25 years. The new valve, which is made of Elast-Eon, is designed to
overcome certain of the major shortcomings of mechanical and tissue heart
valves, has undergone extensive laboratory and animal testing, and, in the
first half of 2001, is expected to enter the regulatory approval testing
phase.


Tests conducted to date have confirmed the Directors' belief that the new
synthetic valve has the potential to become the first of a new generation of
replacement heart valves. It will be a key element in the Group's strategy of
becoming a world leading heart valve company.


Elast-Eon biomaterials


Elast-Eon is a family of implantable biomaterials which has demonstrated
combined levels of biostability, biocompatibility and flexibility unmatched by
any other synthetic biomaterials which are currently commercially available on
the market of which the Company is aware.


The Directors expect that with such features and if it continues to perform
well in tests of AorTech's new synthetic tri-leaflet heart valve (being one of
the most demanding applications for the use of a biomaterial in the human
body), Elast-Eon will have a large range of other potential uses in the
implantable medical devices sector.


AorTech intends to explore fully the revenue-earning opportunities that it
believes Elast-Eon will bring to the Group by expanding the Group's own
product range as well as by licensing and supplying the material to other
medical device companies. The Directors believe that Elast-Eon, with its
combination of characteristics, could become the synthetic biomaterial of
choice for manufacturers and developers of implantable medical devices.


TruCCOMS, a real-time continuous cardiac output monitoring system


The Directors believe that the truCCOMS method of cardiac output monitoring is
superior to conventional methods in terms of its responsiveness and ease of
use. TruCCOMS enables cardiac output to be measured continuously and provides
virtually immediate real-time data.


TruCCOMS has received European and US regulatory approval and first sales were
made in January 2001. The Directors expect that the demand for this system,
together with further applications of its technology, will be an important
factor in AorTech's strategy to become a leading provider of cardiac output
monitoring systems.


Further information in respect of the Open Offer and the International
Offering will be set out in a prospectus and a circular to be issued by the
Company later today. The Open Offer will only be made to shareholders with
registered addresses within the United Kingdom and the United States.
Applications under the Open Offer may only be made on a personalised
application form, which will be sent to all qualifying shareholders with a
copy of the prospectus and the circular.


New ordinary shares are being offered and issued within the United States or
to US persons under the Open Offer pursuant to Rule 801 under the US
Securities Act of 1933, as amended (the 'Securities Act'). New and existing
ordinary shares will be offered, issued and sold within the United States
under the International Offering only to 'qualified institutional buyers'
(within the meaning of Rule 144A under the Securities Act) in reliance on Rule
144A of the Securities Act.


This announcement has been issued by, and is the sole responsibility of,
AorTech International plc ('AorTech' or the 'Company') and has been approved
solely for the purposes of Section 57 of the Financial Services Act 1986 by
Morgan Stanley & Co. International Limited. Morgan Stanley & Co. International
Limited and Morgan Stanley Securities Limited, which are regulated in the
United Kingdom by The Securities and Futures Authority Limited, are acting
exclusively for the Company in relation to the Open Offer, the International
Offering and the listing of ordinary shares of the Company on the Official
List of the UK Listing Authority and will not be responsible to anyone other
than the Company for providing the protections afforded to customers of Morgan
Stanley & Co. International Limited and Morgan Stanley Securities Limited or
for providing advice in relation to the Open Offer, the International Offering
or such listing.


This announcement does not constitute, or form part of, an offer or
solicitation of an offer to purchase or subscribe for securities. Any
acquisition of, or application for, shares to be issued or sold in connection
with the proposed Open Offer and International Offering should only be made on
the basis of information contained in the prospectus being issued by the
Company today in connection with the Open Offer, the International Offering
and the listing of its ordinary shares on the Official List of the UK Listing
Authority, which contains certain detailed information about the Company and
its management, as well as financial statements and other financial data.


Stabilisation/FSA


The information contained in this announcement is not for publication or
distribution to persons in the United States of America. The securities to be
issued or sold in connection with the Open Offer and the International
Offering have not been and will not be registered under the Securities Act and
may not be offered or sold without registration under the Securities Act
except pursuant to an available exemption under the Securities Act.


These materials do not constitute an offer of securities for sale in the
United States. Any offering of securities to be made in the United States
pursuant to the International Offering will be by means of the prospectus
being issued by the Company today which contains detailed information about
the Company and its management, as well as financial statements and other
financial data.