Northstar Neuroscience, Inc. Announces Underwriters' Exercise of Over-allotment Option and Completion of Initial Public Offering
Wednesday May 10, 2:20 pm ET

SEATTLE--(BUSINESS WIRE)--May 10, 2006--Northstar Neuroscience, Inc. (Nasdaq:NSTR - News) today announced that the underwriters of Northstar's initial public offering exercised their option in full to purchase an additional 1,065,000 shares of its common stock to cover over-allotments. In addition, Northstar announced that it completed the sale of 8,165,000 shares of its common stock, including the underwriters' over-allotment option. All of the shares were sold to the public at an initial public offering price of $15.00 per share.

Northstar received net proceeds from the offering, including the exercise of the underwriters' over-allotment option, of approximately $112 million after payment of underwriting discounts and commissions and estimated offering expenses.

The joint book-running managers of the offering were Citigroup Global Markets Inc. and Cowen and Company, LLC. First Albany Capital Inc. and Leerink Swann & Co., Inc. acted as co-managers.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction, where such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

A copy of the final prospectus relating to this offering may be obtained from the Securities and Exchange Commission website at www.sec.gov or by contacting Citigroup Corporate and Investment Banking, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, NY 11220 (Tel: 718-765-6732; Fax: 718-765-6734) or Cowen and Company, LLC, c/o ADP Financial Services, 1155 Long Island Ave., Edgewood, NY 11717.

About Northstar Neuroscience

Northstar Neuroscience is a medical device company focused on developing and commercializing neurostimulation therapies for a broad range of neurological diseases and disorders. Northstar's proprietary technology is designed to deliver targeted electrical stimulation to the outermost layer of the brain, called the cortex, in a process referred to as cortical stimulation. Our initial investigational product, the Northstar Stroke Recovery System, is designed to enhance recovery of hand and arm motor function in patients who have suffered a stroke. We are also studying therapeutic applications for stroke-related aphasia and for tinnitus.

Contact:

Northstar Neuroscience, Inc.

Raymond Calvert, 206-902-1930

ir@northstarneuro.com

Source: Northstar Neuroscience, Inc.