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Vasogen Inc. Contact:
Glenn Neumann, Investor Relations
2155 Dunwin Drive
Mississauga, ON, Canada L5L 4M1
tel: (905) 569-9065 fax: (905) 569-9231
www.vasogen.com / investor@vasogen.com  FOR IMMEDIATE RELEASE Vasogen Announces 2004 Year-end Results Mississauga, Ontario (January 18, 2005)  Vasogen Inc. (NASDAQ:VSGN; TSX:VAS)today reported
the results of operations for the fiscal year ended November 30, 2004. All dollar amounts
referenced herein are Canadian dollars unless otherwise noted. At November 30, 2004, our cash and marketable securities totalled $73.0 million (US $61.6 million),
compared with $60.1 million at the previous year-end. This increase is a result of the net
proceeds received from the financing that was completed March 4, 2004, being greater than the cash
used in operations during the year. In line with our expectations, our net cash used in operating
activities during 2004 was $55.8 million and during the fourth quarter of 2004 was $13.7 million,
an increase of $0.5 million over the third quarter of 2004. We incurred a net loss for the year of $74.6 million, or $1.07 per common share, compared with a
net loss of $31.9 million, or $0.57 per common share for the previous year. The majority of the
difference between our net cash used in operating activities and our accounting loss for 2004
results from accrued expenses related to our phase III studies, which are not payable until certain
performance-based milestones are achieved, and from a foreign exchange loss of $8.3 million. With
respect to the foreign exchange loss, we held a large percentage of our cash resources in U.S.
dollars during 2004 to cover our significant U.S. dollar denominated R&D expenses, which are
associated with our phase III clinical programs. The foreign exchange loss resulted from the
strengthening of our reporting currency, the Canadian dollar, relative to the U.S. dollar, over the
course of 2004. This foreign exchange loss, although significant from an accounting point of
view, does not impair our ability to pay our U.S. dollar expenditures. In 2004, research and development expenditures increased to $51.8 million from $21.7 million in
2003. Our phase III programs in peripheral arterial disease and chronic heart failure were the key
drivers of this increase. This increase was primarily the result of new clinical sites being
initiated in our two phase III clinical trials and higher patient recruitment rates in these
studies. The number of new clinical site initiations increased by approximately 163% in 2004, as
compared to 2003, and the number of patients recruited into these trials, which is also a key
driver of R&D costs, increased by 875% in 2004 over 2003. Further information about our research
and development programs is included in the Highlights below. General and administrative expenditures were $15.9 million in 2004, compared to $10.2 million in
2003. The majority of the increase in G&A expenditures resulted from infrastructure and other
costs, which have increased to support our two phase III clinical programs and other activities
associated with preparing for the commercialization of our products. The consolidated financial statements, accompanying notes to the consolidated financial statements,
and Managements Discussion and Analysis for the year ended November 30, 2004, are accessible on
Vasogens Web site at www.vasogen.com and will be available on SEDAR and EDGAR. Summary financial
tables are provided below. -more-




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...page 2, January 18, 2005 Highlights  
    We reached full enrollment in our 500-patient pivotal phase III
SIMPADICO trial in peripheral arterial disease (PAD). The
SIMPADICO trial is designed to investigate the use of our
Celacade technology to improve maximal treadmill walking
distance; the efficacy endpoint recognized by the FDA and other
regulatory authorities for approving new products for PAD. We
expect that the primary endpoint of the SIMPADICO study will be
completed by the end of the second quarter of 2005 and results
will be made available following analysis of the data.  
    Comprehensive results from our phase II trial in advanced chronic
heart failure patients were published in the September 15, 2004
issue of the Journal of the American College of Cardiology. The
article was authored by Dr. Guillermo Torre-Amione, Medical
Director of the Heart Transplant Service at the Methodist DeBakey
Heart Center and Baylor College of Medicine; Dr. François Sestier,
Faculty of Medicine at the University of Montréal; Dr. Branislav
Radovancevic, Associate Director, Cardiovascular Surgery and
Transplant Research, Texas Heart Institute; and Dr. James Young,
Chairman, Division of Medicine at The Cleveland Clinic Foundation.
The clinical trial evaluated 73 patients with advanced chronic
heart failure who were all receiving stable doses of
pharmaceuticals that reflected the current standard of care. The
key finding from the published study, which formed the basis for
the ongoing 2,000-patient pivotal phase III ACCLAIM trial, was a
significant reduction in the risk of death and all-cause
hospitalization for patients in the Celacade group compared to
patients receiving placebo.  
    Patient recruitment into the ACCLAIM trial expanded in North
America and Europe, under the direction of pre-eminent
cardiovascular researchers and opinion leaders, at a total of more
than 150 medical centers. The ACCLAIM trial is investigating the
impact of our Celacade technology on the risk of death and
cardiovascular hospitalization in advanced heart failure patients.
The primary outcome measure of the ACCLAIM trial is the
composite endpoint of all-cause mortality or cardiovascular
hospitalization (time to first event). The trial, which has been
approved to enroll up to 2,016 patients, will conclude when a
minimum of 701 events (defined as death or first cardiovascular
hospitalization) has occurred and all patients have been followed
for at least six months. Subject to achieving the pre-defined
event rate, we expect to complete the primary endpoint of the
ACCLAIM study and report initial results during the second half of
2005.  
    Preclinical results demonstrating the ability of our Celacade
technology to reduce heart muscle inflammation were presented at
the 8th Annual Scientific Meeting of the Heart Failure
Society of America in Toronto. The research was conducted under
the direction of Dr. Guillermo Torre-Amione and Dr. Douglas L.
Mann from the Methodist DeBakey Heart Center and Winters Center
of Heart Failure Research at Baylor College of Medicine. In a
preclinical model of cardiac inflammation, using our Celacade
technology, both myocardial levels of the pro-inflammatory
cytokine TNF-á and inflammatory cellular infiltrates in heart
tissue were decreased. Inflammatory cellular infiltrates were
found in 57% of controls and in only 25% of animals receiving the
active treatment using our Celacade technology. The importance of
this key finding is that the anti-inflammatory effects were
focused at the tissue level within the myocardium, providing
additional insight into the potential mechanism of benefit of
using our Celacade technology in heart failure.  
    We were granted regulatory approval in Europe (the CE Mark) for
our Celacade technology for the treatment of chronic heart
failure. This regulatory approval positions us to market our
technology in the 25 member countries of the European Union, where
it is estimated that chronic heart failure affects more than five
million people. We plan to commercialize our Celacade technology
in Europe upon the successful completion of our ongoing ACCLAIM trial,
which is designed to support commercial introduction in the European
Union and regulatory approvals and commercialization in North America.  
    Reflecting our increased focus on clinical development and preparations for market
introduction of our Celacade technology, we recently announced the appointment of Jay Kleiman,
MD, MPA, as Head of Cardiovascular Development and Chief Medical Officer, with overall
responsibility for the development of -more-




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....page 3, January 18, 2005 cardiovascular products, and Michael Shannon, MD, MSc, MA, as Vice President of Medical Affairs,
with responsibility for providing medical leadership to the Companys clinical development
programs. In his thirty years of medical practice and industry experience as a cardiologist,
Dr. Kleiman has demonstrated leadership in both medical products development and health policy.
As Medical Director, Cardiovascular/Metabolic Clinical Research for the G.D. Searle Division of
Pharmacia (now Pfizer Corporation), he managed a 7,300-patient interventional cardiology
outcomes trial (EXCITE), and a 6,600-patient international phase III heart failure trial
(EPHESUS) that led to a successful NDA submission. Dr. Shannon also has thirty years of
experience in medical leadership roles with government and industry, including a number of
senior roles at Health Canada. Dr. Shannon has served as the Director General for the
Laboratory Centre for Disease Control at Health Canada, the Chief Medical Advisor to the
Assistant Deputy Minister of the Health Protection Branch, and the Director General of the
Canadian Blood Secretariat within Health Canada. As we prepare for additional regulatory
filings and market introduction of our Celacade technology, we welcome the depth of experience
and expertise that these outstanding individuals bring to our management team.  
    We reported results from our preclinical program investigating the therapeutic potential of
VP025. VP025, the lead product candidate from our new class of drugs, targets the chronic
inflammation underlying neurological conditions, including Alzheimers disease, Parkinsons
disease, and amyotrophic lateral sclerosis (ALS), also known as Lou Gehrigs disease. VP025
is expected to enter clinical development during the first half of 2005.  
    Research demonstrating the ability of VP025 to reverse a correlate of
memory impairment associated with aging was presented at the Fourth Federation of
European Neuroscience Societies Forum in Lisbon, Portugal and at Neuroscience 2004,
the Society for Neurosciences 34th Annual Meeting in San Diego. The results,
presented by Dr. Marina Lynch and her team from the Department of Physiology at
Trinity College in Ireland, also showed that VP025 prevented impairment of memory
caused by beta-amyloid, a major component of the plaques found in brains of
Alzheimers disease patients.  
    Also presented at Neuroscience 2004, was research carried out at the
Department of Anatomy/Neuroscience, Biosciences Institute, University College Cork,
Ireland, that demonstrated the ability of VP025 to improve movement abnormalities
and provide a significant neuroprotective effect in a well-established model of
Parkinsons disease. Evidence is accumulating that inflammation also plays an
important role in the pathogenesis of this debilitating condition.  
    Research was also presented at both the 128th Annual Meeting of the
American Neurological Association in Toronto and at Neuroscience 2004, which
confirmed the ability of VP025 to significantly delay the onset of symptoms and
increase survival in a model of ALS. In ALS, the immune system actively contributes
to motor neuron injury through inflammatory processes. This research was conducted
under the direction of Dr. Stanley Appel, Chief of Neurology at the Methodist
Hospital and Professor of Neurology at Baylor College of Medicine.  
    Data from a second formulation from our VP series of drugs
(VP015), was published in the Journal of Neuroimmunology. The
preclinical data demonstrate the ability of VP015 to mediate
inflammatory activity across the blood brain barrier and to
significantly reduce markers of inflammation in the brain,
supporting the therapeutic potential for the VP drug formulations
to address a number of serious neuro-inflammatory disorders.  
    In September, we held an R&D Investor Meeting in New York to
review our technology and clinical programs. Panel members
included: Dr. Jeffrey Olin, Professor of Medicine, Mount Sinai
School of Medicine and Global Principal Investigator and Chairman
of the Steering Committee for the SIMPADICO study; Dr. Milton
Packer, -more-




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...page 4, January 18, 2005 Director, Center for Biostatistics and Clinical Science, University of Texas and a member of
Vasogens Scientific Advisory Board; Dr. Guillermo Torre-Amione, Medical Director, Heart
Transplant Service, Texas Heart Institute and Medical Director, Cardiac Transplant Service,
Baylor College of Medicine and Principal Investigator for the U.S. arm of the ACCLAIM trial; and
Dr. James Young, Chairman, Department of Medicine and Medical Director of the Kaufman Center for
Heart Failure at the Cleveland Clinic and Chairman of the Steering Committee and Global
Principal Investigator for the ACCLAIM trial.  
    In March 2004 we completed an offering of 9,775,000 common shares,
resulting in gross proceeds to the Company of approximately
US$57.7 million.  
    On December 17, 2003 Vasogen common shares began trading on the
NASDAQ National Market and on May 24, 2004, Vasogen was added to
the NASDAQ Biotechnology Index. A conference call will be conducted on January 18, 2005, at 4:30 p.m. Eastern Time. The conference
call may be accessed at 416-695-5261 or 1-888-789-0150 ten minutes prior to the call. An audio web
cast of the event will also be available at www.vasogen.com. A re-broadcast of the conference call
may be accessed by calling 1-866-631-6903, pin code 1247 and will also be available at
www.vasogen.com. About Vasogen: Vasogen is a leader in the research and commercial development of technologies targeting the
chronic inflammation underlying cardiovascular and neurological disease. Our lead product, the
Celacade technology, is currently in two pivotal phase III clinical trials in life-threatening
cardiovascular conditions with significant unmet needs. The 500-patient phase III SIMPADICO trial,
which has completed patient enrolment, is designed to further investigate the use of our Celacade
technology to improve intermittent claudication, a debilitating symptom associated with peripheral
arterial disease. The 2000-patient phase III ACCLAIM trial, ongoing at more than 150 clinical
centers in North America and Europe, is designed to further investigate the use of our Celacade
technology to reduce the risk of death and hospitalization in patients with advanced chronic heart
failure. We are also developing a new class of drugs for the treatment of inflammation in the
brain and central nervous system. VP025, the lead product candidate from this new class of drugs,
is in preclinical development for the treatment of
neuro-inflammatory disorders including Parkinsons disease and Alzheimers disease, and is expected
to enter phase I clinical development during the first half of 2005. This document and conference call contains forward-looking statements that involve risks and
uncertainties, which may cause actual results to differ materially from the statements made. For
this purpose, any statements that are contained herein that are not statements of historical fact
may be deemed to be forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Without limiting the foregoing, the words
believes, anticipates, plans, intends, will, should, expects, projects, and similar
expressions are intended to identify forward-looking statements. You are cautioned that such
statements 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, those associated with the success of
research and development programs, the regulatory approval process, competition, securing and
maintaining corporate alliances, market acceptance of the Companys products, the availability of
government and insurance reimbursements for the Companys products, the strength of intellectual
property, financing capability, the potential dilutive effects of any financing, reliance on
subcontractors and key personnel and other risks detailed from time-to-time in the Companys public
disclosure documents or other filings with the Canadian and U.S. securities commissions or other
securities regulatory bodies. The forward-looking statements are made as of the date hereof, and
the Company disclaims any intention and has 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. Financial Statements to Follow
(Notes to the Financial Statements will be available on www.vasogen.com, SEDAR and EDGAR)




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...page 5, January 18, 2005


VASOGEN INC. Consolidated Balance Sheets
(In thousands of Canadian dollars) November 30, 2004 and 2003 2004
    
    
    2003AssetsCurrent assets:Cash
    
    $
    5,336
    
    
    $
    4,476Marketable securities
    
    
    67,651
    
    
    
    52,354Clinical supplies
    
    
    2,804
    
    
    
    4,418Tax credits recoverable
    
    
    1,596
    
    
    
    1,383Prepaid expenses and deposits
    
    
    1,850
    
    
    
    1,02179,237
    
    
    
    63,652Marketable securities
    
    
    
    
    
    
    3,255Property and equipment
    
    
    967
    
    
    
    360Acquired technology
    
    
    759
    
    
    
    1,013Deferred share issue costs
    
    
    
    
    
    
    503$
    80,963
    
    
    $
    68,783Liabilities and Shareholders EquityCurrent liabilities:Accounts payable
    
    $
    8,120
    
    
    $
    3,831Accrued liabilities
    
    
    7,168
    
    
    
    2,487Accrued loss on forward exchange contracts
    
    
    5,220
    
    
    
    20,508
    
    
    
    6,318Shareholders equity:Share capital:Authorized:Unlimited common shares, without par value
Issued and outstanding:72,331,286 common shares (2003 - 62,022,306)
    
    
    245,465
    
    
    
    173,380Warrants
    
    
    1,456
    
    
    
    1,456Options
    
    
    1,199
    
    
    
    744Deficit
    
    
    (187,665
    )
    
    
    (113,115
    )60,455
    
    
    
    62,465Commitments$
    80,963
    
    
    $
    68,783
      ...page 6, January 18, 2005
 VASOGEN INC. Consolidated Statements of Operations and Deficit
(In thousands of Canadian dollars, except per share amounts) Period fromDecember 1,1987 toYears ended November 30,
    
    
    November 30,2004
    
    
    2003
    
    
    2002
    
    
    2004Expenses:Research and development
    
    $
    51,794
    
    
    $
    21,730
    
    
    $
    12,675
    
    
    $
    122,725General and administration
    
    
    15,852
    
    
    
    10,250
    
    
    
    7,542
    
    
    
    61,592Foreign exchange loss
    
    
    8,288
    
    
    
    1,111
    
    
    
    267
    
    
    
    9,608Loss before the undernoted
    
    
    (75,934
    )
    
    
    (33,091
    )
    
    
    (20,484
    )
    
    
    (193,925
    )Investment income
    
    
    1,384
    
    
    
    1,143
    
    
    
    977
    
    
    
    7,770Loss for the period
    
    
    (74,550
    )
    
    
    (31,948
    )
    
    
    (19,507
    )
    
    
    (186,155
    )Deficit, beginning of period
    
    
    (113,115
    )
    
    
    (81,167
    )
    
    
    (61,660
    )
    
    
    (1,510
    )Deficit, end of period
    
    $
    (187,665
    )
    
    $
    (113,115
    )
    
    $
    (81,167
    )
    
    $
    (187,665
    )Basic and diluted loss per
common share
    
    $
    (1.07
    )
    
    $
    (0.57
    )
    
    $
    (0.40
    )
      ...page 7, January 18, 2005 VASOGEN INC.
(A DEVELOPMENT STAGE COMPANY) Consolidated Statements of Cash Flows
(In thousands of Canadian dollars) Period fromDecember 1,1987 toYears ended November 30,
    
    
    November 30,2004
    
    
    2003
    
    
    2002
    
    
    2004Cash provided by (used in):Operating activities:Loss for the period
    
    $
    (74,550
    )
    
    $
    (31,948
    )
    
    $
    (19,507
    )
    
    $
    (186,155
    )Items not involving cash:Amortization of property
and equipment and
acquired technology
    
    
    463
    
    
    
    393
    
    
    
    377
    
    
    
    4,286Stock-based compensation costs
    
    
    455
    
    
    
    431
    
    
    
    
    
    
    
    886Common shares issued
for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,449Foreign exchange loss
    
    
    8,278
    
    
    
    1,186
    
    
    
    228
    
    
    
    9,584Other
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    (35
    )Change in non-cash operating
working capital
    
    
    9,542
    
    
    
    708
    
    
    
    (1,235
    )
    
    
    9,010(55,812
    )
    
    
    (29,226
    )
    
    
    (20,137
    )
    
    
    (159,975
    )Financing activities:Shares issued for cash
    
    
    76,913
    
    
    
    50,669
    
    
    
    25,000
    
    
    
    233,405Warrants exercised for cash
    
    
    
    
    
    
    1,347
    
    
    
    
    
    
    
    16,941Options exercised for cash
    
    
    1,300
    
    
    
    589
    
    
    
    540
    
    
    
    7,042Share issue costs
    
    
    (5,625
    )
    
    
    (4,632
    )
    
    
    (1,901
    )
    
    
    (17,265
    )Issue of convertible debt, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    622Payable to related parties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (234
    )72,588
    
    
    
    47,973
    
    
    
    23,639
    
    
    
    240,511Investing activities:Increase in property and equipment
    
    
    (816
    )
    
    
    (192
    )
    
    
    (87
    )
    
    
    (1,903
    )Increase in acquired
technology
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,283
    )Purchases of marketable securities
    
    
    (74,872
    )
    
    
    (49,151
    )
    
    
    (24,201
    )
    
    
    (221,767
    )Maturities of marketable securities
    
    
    59,976
    
    
    
    33,143
    
    
    
    21,626
    
    
    
    149,947(15,712
    )
    
    
    (16,200
    )
    
    
    (2,662
    )
    
    
    (75,006
    )Foreign exchange loss on cash
held in foreign currency
    
    
    (204
    )
    
    
    (95
    )
    
    
    (3
    )
    
    
    (194
    )Increase in cash and cash equivalents
    
    
    860
    
    
    
    2,452
    
    
    
    837
    
    
    
    5,336Cash, beginning of period
    
    
    4,476
    
    
    
    2,024
    
    
    
    1,187
    
    
    
    Cash, end of period
    
    $
    5,336
    
    
    $
    4,476
    
    
    $
    2,024
    
    
    $
    5,336