MINNEAPOLIS--(BUSINESS WIRE)-June 7, 1999

Company Expects to Enter $250 Million U.S. Market by End of 1999

NovaMed, Inc. (OTCBB: NVMD) announced today that the U.S. Food and Drug Administration has completed the scientific review portion of the company's 510(k) application for its NovaSaline(TM) Inflatable breast implant.

The final step in the process of obtaining FDA clearance to market the product in the U.S. is FDA inspection of its Minneapolis manufacturing facilities, methods and controls to ensure that they are in compliance with government regulations. The company is preparing its manufacturing facility and expects to be ready for the FDA inspection by September 1999.

NovaMed President, Ruairidh Campbell, said, "The much anticipated introduction of NovaMed products into the U.S. marketplace has moved one step closer to reality. The sale of the NovaSaline(TM) Inflatable breast implants will dramatically improve the company's cash flow and provide significant market presence in the United States."

The NovaSaline(TM) Inflatable breast implant offers an alternative design to other saline breast implants currently available in the U.S. market. Unlike other saline inflatable implants, the NovaSaline(TM) has a unique one-piece self sealing filling valve/patch assembly. This design eliminates the need for a physician to manually seal the implant after filling, and also eliminates the straps associated with other saline breast implants. By incorporating the filling valve and shell patch into a single system, there is only one fused area on the shell.

In the early 1990s, the FDA imposed a ban on use of silicone gel breast implants for cosmetic breast augmentation. In the U.S., silicone gel implants are allowed only for use in breast reconstruction as part of a controlled clinical study. Since that time, saline breast implants are the only ones allowed to remain on the market for cosmetic breast augmentation.

However, unlike most other medical devices cleared to market, due to the controversy and heightened media coverage surrounding breast implants, all saline breast implant manufacturers are required to conduct a Post-Market Surveillance Clinical Study of the devices to evaluate safety and efficacy. As a result, NovaMed expects to initiate the study for the NovaSaline(TM) Inflatable in conjunction with marketing the product by the end of 1999.

The market for breast implants in the U.S. has been estimated at approximately $250 million annually. More than 80% of that is attributable to use of saline filled breast implants for cosmetic breast augmentation. The supply of this demand is dominated by two major U.S. manufacturers of medical devices. NovaMed intends to become the third significant participant in this ever growing market (275% growth in the last five years) and to capture 5% to 8% of the U.S. market within one year of introduction.

NovaMed develops, manufactures and markets breast implant products. The company operates from facilities in Minneapolis, Minnesota and Monheim, Germany. Other company products include the NovaGold(TM) breast implant, an advanced alternative fill product that utilizes a PVP hydro gel filling material that offers certain beneficial design characteristics that are not present in other fill materials, and the NovaSaline(TM) Pre-filled breast implant, which is expected, subject to FDA clearance, to be introduced into the U.S. market later this year.

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Forward-looking statements involve the known and unknown risks and uncertainties that may cause the company's actual results in future periods to differ materially from that which is anticipated.

Martin E. Janis & Company, Chicago

Hal Schweig, 312/943-1100 or Novamed, Inc., Minneapolis

Ruairidh Campbell, 612/378-1437

President