Vasogen Inc.

Contact:
Glenn Neumann, Investor Relations
2505 Meadowvale Blvd
Mississauga, ON, Canada L5N 5S2
tel: (905) 817-2004  fax: (905) 569-9231
www.vasogen.com / investor@vasogen.com


--------------------------------------------------------------------------------

FOR IMMEDIATE RELEASE

                  Vasogen Announces Third Quarter 2006 Results

Toronto, Ontario (October 12, 2006) -- Vasogen Inc. (NASDAQ:VSGN; TSX:VAS) today
reported the results of operations for the third quarter of 2006. Comparative
figures relate to the three- and nine-month periods ended August 31, 2006, and
to the three- and nine-month periods ended August 31, 2005. All dollar amounts
referenced herein are in Canadian dollars, unless otherwise stated.

At August 31, 2006, our cash and cash equivalents, restricted cash, and
marketable securities held to maturity totaled $25.6 million, compared with
$85.2 million at November 30, 2005.

As of October 1, 2006, the outstanding principal balance of our convertible
notes has been reduced to US$10.0 million. Beginning September 1, 2006, we have
been required, under the terms of the convertible notes, to maintain a balance
of cash, including restricted cash, and marketable securities equal to 110% of
the convertible notes outstanding. We have satisfied this cash test at all times
since it came into effect.


The loss for the third quarter of 2006 was $14.6 million, or $0.15 per share,
compared to a loss of $24.1 million, or $0.30 per share, in the third quarter of
2005. For the nine months ended August 31, 2006, the loss was $56.3 million, or
$0.64 per share, compared to a loss of $69.0 million, or $0.87 per share, for
the comparable period in 2005. The loss has decreased as a result of a reduction
in the costs associated with our phase III clinical programs and has been
partially offset by expenses associated with the senior convertible notes. The
difference between cash used in operations and our accounting loss includes such
non-cash items as stock option grant expense, amortization expense, accretion
and amortization of costs associated with the senior convertible notes payable,
offset by payment of accrued expenses related to our recently completed phase
III clinical trials.


Research and development expenditures were $7.4 million in the third quarter of
2006, compared to $17.2 million in the third quarter of 2005. For the nine
months ended August 31, 2006, these expenditures were $29.8 million, compared to
$54.7 million for the comparable period in 2005. The majority of the decrease in
our R&D expense for the three months and nine months ended August 31, 2006, when
compared with the same periods in 2005, resulted from a significant reduction in
the clinical trial activities relating to our phase III programs.

General and administration expenditures were $3.8 million for the third quarter
of 2006, compared to $5.2 million for the third quarter of 2005. For the nine
months ended August 31, 2006, these expenditures were $14.3 million, compared to
$16.6 million for the comparable period in 2005.


                                     -more-
<PAGE>

                                                     ...page 2, October 12, 2006

Highlights

   o  On September 13, 2006, new data were presented from the 2,400-patient
      ACCLAIM trial of our Celacade technology in chronic heart failure that
      showed the average days spent in hospital for cardiovascular cause was
      reduced by 32% in a prime heart failure target population, consisting of
      New York Heart Association (NYHA) Class II-IV non-ischemic cardiomyopathy
      patients, characterized as having no prior history of heart attack, and
      Class II patients with ischemic heart failure (n=1,305 patients, p=0.01).
      The results were presented by Guillermo Torre-Amione, MD, PhD, at the 10th
      Annual Scientific Meeting of the Heart Failure Society of America (HFSA)
      in Seattle, Washington. Chronic heart failure is estimated to cost the
      healthcare system $25 billion annually in the U.S., and recurring
      hospitalizations are the major cost driver.

   o  On September 3, 2006, Dr. Torre-Amione also presented new ACCLAIM data at
      a late-breaking clinical trial Hot Line Session of the World Congress of
      Cardiology 2006 (WCC) in Barcelona, Spain. In a combined analysis of NYHA
      Class II-IV non-ischemic cardiomyopathy patients, characterized as having
      no prior history of heart attack, as well as Class II patients with
      ischemic etiology, Celacade demonstrated a 31% reduction in the risk of
      death or first cardiovascular hospitalization compared to placebo (n=1,305
      patients, 391 events, p=0.0003). New data also showed that Celacade
      significantly reduced the risk of death or first cardiovascular
      hospitalization by 26% in a subgroup of patients with no prior history of
      heart attack at baseline (n=919 patients, 243 events, p=0.02). As
      previously reported, in the subgroup of patients with NYHA Class II heart
      failure at baseline, Celacade was also shown to significantly reduce the
      risk of death or first cardiovascular hospitalization by 39% (n=689
      patients, 216 events, p=0.0003).

   o  Consistent with the impact of Celacade on the risk of mortality and
      morbidity in major subgroups within the ACCLAIM trial was the finding of a
      significant improvement in quality of life (as measured by the Minnesota
      Living with Heart Failure Questionnaire) for the intent-to-treat study
      population (n=2,400 patients, p=0.04). Celacade was also shown to be safe
      and well tolerated, and there were no significant between-group
      differences for any serious adverse events.

As previously announced, a conference call and audio web cast will be conducted
on October 12, 2006, at 4:30 p.m. Eastern Time. The conference call may be
accessed by calling 416-695-6130 or 1-800-766-6630, ten minutes prior to the
call. An audio webcast of the event will also be available at www.vasogen.com. A
re-broadcast of the conference call may be accessed by calling 416-641-2135 or
1-800-293-6441, pin code: 2017, and will also be available at www.vasogen.com.


About Vasogen
Vasogen is focused on the research and commercial development of technologies
targeting the chronic inflammation underlying cardiovascular and neurological
disease. Vasogen's Celacade technology is in late-stage development for the
treatment of chronic heart failure. The recently completed phase III ACCLAIM
trial assessed the impact of Celacade on reducing the risk of mortality and
morbidity in patients with Class II-IV systolic heart failure. Vasogen is also
developing a new class of drugs for the treatment of neuro-inflammatory and
neuro-vascular disorders. VP025, which is entering phase II clinical
development, is the lead product candidate from this new class of drugs.

                                     -more-

<PAGE>


                                                    ....page 3, October 12, 2006



Certain  statements  in this press  release  and  upcoming  conference  call and
webcast constitute "forward-looking statements" within the meaning of the United
States Private  Securities  Litigation  Reform Act of 1995. These statements may
include,  without  limitation,  summary  statements  relating  to results of the
ACCLAIM  trial in patients  with  chronic  heart  failure,  plans to advance the
development of Celacade(TM), statements concerning our partnering activities and
health regulatory  submissions,  strategy,  future operations,  future financial
position, future revenues,  projected costs, prospects,  plans and objectives of
management.  In some  cases,  you can  identify  forward-looking  statements  by
terminology such as "may", "will", "should", "expects", "plans",  "anticipates",
"believes",  "estimated",   "predicts",   "potential",   "continue",  "intends",
"could", or the negative of such terms or other comparable terminology. A number
of  assumptions  were  made by us in the  preparation  of these  forward-looking
statements,  including  assumptions about the nature,  size and accessibility of
the market for Celacade in the treatment of chronic heart failure,  particularly
in Europe, the regulatory approval process leading to commercialization  and the
availability  of  capital  on  acceptable  terms to pursue  the  development  of
Celacade. You should not place undue reliance on our forward-looking  statements
which are subject to a  multitude  of risks and  uncertainties  that could cause
actual results,  future  circumstances or events to differ materially from those
projected in the forward-looking  statements.  These risks include,  but are not
limited to, the outcome of further  analysis of the ACCLAIM trial  results,  the
requirement  or  election  to  conduct  additional  clinical  trials,  delays or
setbacks in the regulatory approval process,  securing and maintaining corporate
alliances,  the need for  additional  capital  and the effect of capital  market
conditions  and other factors on capital  availability,  the potential  dilutive
effects of any financing,  including the convertible  notes we issued in October
2005,  risks  associated  with  the  outcome  of our  research  and  development
programs, the adequacy, timing and results of our clinical trials,  competition,
market acceptance of our products,  the availability of government and insurance
reimbursements for our products, the strength of intellectual property, reliance
on  subcontractors  and  key  personnel,  losses  due  to  fluctuations  in  the
U.S.-Canadian  exchange  rate, and other risks detailed from time to time in our
public  disclosure  documents  or  other  filings  with  the  Canadian  and U.S.
securities  commissions or other securities regulatory bodies.  Additional risks
and  uncertainties  relating to our Company and our business can be found in the
"Risk Factors" section of our Annual Information Form and Form 40-F for the year
ended  November  30,  2005,  as  well  as  in  our  later  public  filings.  The
forward-looking  statements are made as of the date hereof,  and we disclaim any
intention and have no obligation or  responsibility,  except as required by law,
to update or revise any forward-looking  statements,  whether as a result of new
information,  future events or otherwise. Unless otherwise indicated,  numerical
values indicating the statistical significance  ("p-values") of results included
in this  document  are  based  on  analyses  that do not  account  for  endpoint
multiplicity.


The unaudited interim consolidated  financial statements,  accompanying notes to
the  unaudited  interim  consolidated  financial  statements,  and  Management's
Discussion and Analysis for Vasogen's  third quarter 2006 results are accessible
on  Vasogen's  Website at  www.vasogen.com  and will be  available  on SEDAR and
EDGAR.


Financial tables are provided below.

                                     -more-

<PAGE>
<TABLE>
<CAPTION>

                                                                                  ....page 4, October 12, 2006

VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)

Interim Consolidated Balance Sheets
(In thousands of Canadian dollars)

---------------------------------------------------------------------------------------------------------------
                                                                               August 31,         November 30,
                                                                                     2006                 2005
---------------------------------------------------------------------------------------------------------------
<S>                                                                                 <C>                  <C>
                                                                              (Unaudited)

Assets

Current assets:
     Cash and cash equivalents                                              $      14,566        $      50,521
     Marketable securities                                                              -               22,999
     Clinical supplies                                                              1,211                1,862
     Tax credits recoverable                                                        1,288                1,130
     Prepaid expenses and deposits                                                    801                1,623
     Accrued gain on forward exchange contracts                                         -                  703
     ----------------------------------------------------------------------------------------------------------
                                                                                   17,866               78,838

Restricted cash                                                                    11,053               11,701
Property and equipment                                                                889                1,121
Acquired technology                                                                   316                  506
Deferred financing costs                                                              489                2,645

---------------------------------------------------------------------------------------------------------------
                                                                            $      30,613        $      94,811
---------------------------------------------------------------------------------------------------------------

Liabilities and Shareholders' Equity

Current liabilities:
     Accounts payable                                                       $       3,712        $       5,733
     Accrued liabilities                                                            7,488               20,554
     Current portion of senior convertible notes payable                           14,413               16,659
     Accrued loss on forward exchange contracts                                         -                  763
---------------------------------------------------------------------------------------------------------------
                                                                                   25,613               43,709

Senior convertible notes payable                                                        -               18,795

Shareholders' equity:
     Share capital:
         Authorized:
              Unlimited common shares, without par value
         Issued and outstanding:
              101,435,584 common shares
                (November 30, 2005 - 82,255,374)                                  320,418              295,007
     Stock options                                                                 10,455                8,466
     Equity component of senior convertible notes payable                           2,957                7,985
     Warrants                                                                       6,211                5,345
     Contributed surplus                                                            6,309                  223
     Deficit                                                                     (341,350)            (284,719)
     ----------------------------------------------------------------------------------------------------------
                                                                                    5,000               32,307

---------------------------------------------------------------------------------------------------------------
                                                                            $      30,613        $      94,811
---------------------------------------------------------------------------------------------------------------
</TABLE>

                                                     -more-
<PAGE>
<TABLE>
<CAPTION>

                                                                                   ....page 5, October 12, 2006

VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)

Interim Consolidated Statements of Operations and Deficit (In thousands of
Canadian dollars, except per share amounts) (Unaudited)

---------------------------------------------------------------------------------------------------------------
                                                                                                   Period from
                                                                                                   December 1,
                                               Three months ended             Nine months ended        1987 to
                                                   August 31,                    August 31,         August 31,
                                               2006          2005            2006          2005           2006
---------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>               <C>          <C>           <C>
Expenses:
     Research and development           $     7,360   $    17,217     $    29,773   $    54,698    $   225,722
     General and administration               3,800         5,213          14,290        16,585        100,211
     Foreign exchange loss (gain)               (12)        2,243             160          (573)         9,049
---------------------------------------------------------------------------------------------------------------

Loss before the undernoted                  (11,148)      (24,673)        (44,223)      (70,710)      (334,982)

Interest expense on senior convertible
   notes payable                               (116)            -            (903)            -         (1,247)

Accretion in carrying value of senior
   convertible notes payable                 (1,727)            -          (6,633)            -         (8,375)

Amortization of deferred financing costs       (577)            -          (2,157)            -         (2,565)

Loss on debt extinguishment                  (1,407)            -          (4,101)            -         (4,101)

Investment income                               409           604           1,681         1,672         11,725
---------------------------------------------------------------------------------------------------------------

Loss for the period                         (14,566)      (24,069)        (56,336)      (69,038)      (339,545)

Deficit, beginning of period:
     As originally reported                (326,784)     (236,640)       (284,719)     (187,665)        (1,510)
     Change in accounting for
       stock-based compensation                   -             -               -        (4,006)             -
     ----------------------------------------------------------------------------------------------------------
     As restated                           (326,784)     (236,640)       (284,719)     (191,671)        (1,510)

Charge for acceleration payments
   on equity component of senior
   convertible notes payable                      -             -            (295)            -           (295)

---------------------------------------------------------------------------------------------------------------
Deficit, end of period                  $  (341,350)  $  (260,709)    $  (341,350)  $  (260,709)   $  (341,350)
---------------------------------------------------------------------------------------------------------------

Basic and diluted loss per share        $     (0.15)  $     (0.30)    $    (0.64)   $     (0.87)

---------------------------------------------------------------------------------------------------------------

</TABLE>

                                                     -more-
<PAGE>
<TABLE>
<CAPTION>

                                                                                   ....page 6, October 12, 2006

VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY)

Interim Consolidated Statements of Cash Flows
(In thousands of Canadian dollars)
(Unaudited)

---------------------------------------------------------------------------------------------------------------
                                                                                                   Period from
                                                                                                   December 1,
                                              Three months ended              Nine months ended        1987 to
                                                   August 31,                    August 31,         August 31,
                                               2006         2005             2006          2005           2006
---------------------------------------------------------------------------------------------------------------
<S>                                           <C>            <C>           <C>            <C>           <C>
Cash provided by (used in):

Operations:
     Loss for the period               $  (14,566)    $  (24,069)     $  (56,336)    $  (69,038)   $  (339,545)
     Items not involving cash:
         Amortization                         146            150             444            439          5,319
         Accretion in carrying value of
           senior convertible notes
           payable                          1,727              -           6,633              -          8,375
         Amortization of deferred
           financing costs                    577              -           2,157              -          2,565
         Loss on debt extinguishment        1,407              -           4,101              -          4,101
         Foreign exchange loss (gain)        (121)         2,926             585             54          9,627
         Stock-based compensation             774            922           2,456          2,389         10,963
         Services provided for
           common shares                       28              -              28              -          2,477
         Other                                  -              -               -              -            (35)
     Change in non-cash operating
       working capital                     (5,184)         2,664         (13,832)        14,569          7,812
     ----------------------------------------------------------------------------------------------------------

                                          (15,212)       (17,407)        (53,764)       (51,587)      (288,341)

Financing:
     Shares issued for cash                     -              -               -         52,502        285,907
     Warrants and options exercised
       for cash                                 -            160               -            627         24,610
     Share issue costs                       (160)             -            (160)        (3,720)       (21,145)
     Issue (repayment) on convertible
       debt, net                           (1,695)             -          (3,810)             -         39,630
     Restricted cash                          (38)             -             648              -        (11,053)
     Cash payment on acceleration
       warrants exercise price                  -              -             (49)             -            (49)
     Payable to related parties                 -              -               -              -           (262)
     ----------------------------------------------------------------------------------------------------------
                                           (1,893)           160          (3,371)        49,409        317,638

Investments:
     Increase in property and equipment       (10)          (148)            (24)          (462)        (2,417)
     Increase in acquired technology            -              -               -              -         (1,283)
     Purchases of marketable
       securities                               -              -             (80)             -       (244,846)
     Settlement of forward exchange
       contracts                                -            428            (259)        (4,602)        (4,991)
     Maturities of marketable securities        -              -          22,877         67,651        240,475
     ----------------------------------------------------------------------------------------------------------
                                              (10)           280          22,514         62,587        (13,062)

Foreign exchange gain (loss) on cash
   and cash equivalents held in foreign
   currency                                   205         (3,544)         (1,334)          (672)        (1,669)
---------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash
   and cash equivalents                   (16,910)       (20,511)        (35,955)        59,737         14,566

Cash and cash equivalents,
   beginning of period                     31,476         85,584          50,521          5,336              -
---------------------------------------------------------------------------------------------------------------
Cash and cash equivalents,
   end of period                       $   14,566     $   65,073      $   14,566     $   65,073    $    14,566
---------------------------------------------------------------------------------------------------------------
</TABLE>
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