Organogenesis Inc has entered into discussions with Novartis Pharma AG to reacquire commercialization rights to Apligraf living, bi-layered skin substitute. In order to bring these discussions to a successful conclusion, the Company has undertaken a parallel effort to raise capital sufficient to reacquire Apligraf rights and to build the necessary infrastructure to market, sell and distribute the product.

Steven B. Bernitz, president and chief executive officer of Organogenesis, stated, "We look forward to continuing to work cooperatively with Novartis to resolve this critical issue in a manner that meets both companies' needs. Only by simultaneously restructuring the Novartis collaboration and closing the new financing do we believe that the Company will have a viable business model for the future. Further, we believe that the successful completion of these initiatives taken together will provide comfort to the medical and financial community of the Company's ability to successfully grow Apligraf sales, and are integral to the Company's plan to meet the continuing listing requirements of the American Stock Exchange."

The Company also announced that it had approximately $3.7 million of cash on June 30, 2002. In order to conserve funds and maximize the time available to negotiate these transactions, the Company has implemented cost reductions that resulted in the elimination of 26 jobs. This reduction, combined with other cost reductions made since the beginning of this year, have cut the Company's cash burn rate from approximately $2.5 million per month to approximately $1.1 million per month. In addition, the Company has initiated the sale of non-core assets to further improve its cash position.