Dermagraft US Clinical Trial Update

Smith & Nephew Plc
21 December 1999


Letter to: Company Announcements

DERMAGRAFT US CLINICAL TRIAL UPDATE

Smith & Nephew plc, the global medical device company, and its
joint venture partner Advanced Tissue Sciences (ATS) have
announced the results of a planned interim analysis of data
from the US clinical trial of Dermagraft in the treatment of
diabetic foot ulcers.  Dermagraft is a living human dermal
skin replacement.

Although overall healing rates were lower than in previous
trials, a significant improvement was shown in Dermagraft's
healing rate over control for ulcers with a duration of six or
more weeks prior to entering the trial.  However, for all
patients, which include those with ulcers of more recent
duration, the data does not demonstrate statistical
significance at the interim stage.

The results for the primary endpoint of complete healing at 12
weeks were as follows:

Complete Healing         Intent-to-Treat       Intent-to-Treat
At 12 weeks                   Dermagraft          Control
Patients with ulcers     %      N           %     N    p-value
> 6 weeks               28%    20/72       14%   10/71   0.035
All Patients            30%    27/90       23%   21/92   0.176

Further discussions are planned with the US Food and Drug
Administration, following which Smith & Nephew and ATS will
determine the forward plan for Dermagraft.

Letter from:
P.R. Chambers
Assistant Company Secretary