Will Not Repay 2008 Notes at Maturity

ATLANTA, GA -- (Marketwire) -- 09/02/08 -- AtheroGenics, Inc. (NASDAQ: AGIX), a pharmaceutical company focused on the treatment of chronic inflammatory diseases, today reported that it will not repay the Company's 4.5% Convertible Notes (the "2008 Notes," CUSIP 047439AB0) due today, nor will it make its scheduled interest payment on the 2008 Notes or the 4.5% Convertible Notes due March 1, 2011 (the "2011 Notes," CUSIP 047439AE4). The Company has been attempting to restructure its 2008 Notes prior to their maturity, but was unable to agree on a restructuring on terms acceptable to the Company and the holders of the 2008 Notes. In a related move, AtheroGenics has retained Morgan Stanley to assist it in evaluating restructuring alternatives to its current capital structure. Holders of all three series of convertible notes: the 2008 Notes, the 2011 Notes and the 1.5% Convertible Notes due February 1, 2012 (the "2012 Notes," CUSIP 047439AD6 and CUSIP 047439AC8) are invited to contact Morgan Stanley (contact information below) for further information.

"The very large debt burden of the Company has created a significant impediment to our ability to effectively develop our primary asset, AGI-1067," said Russell M. Medford, M.D., Ph.D., President and Chief Executive Officer of AtheroGenics. "We believe that our actions today appropriately account for the interests of the Company's various stakeholders." Dr. Medford further stated, "We continue to believe that there is a significant medical need and commercial opportunity for our novel lead drug candidate, AGI-1067, which could become the first diabetes treatment with demonstrated cardiovascular safety and the potential to reduce serious cardiovascular events."

The Company intends to meet with the U.S. Food and Drug Administration in the near term to discuss its plans for the second phase 3 clinical trial of AGI-1067 as a treatment for type 2 diabetes.

The action announced today results in an event of default under the indenture governing the 2008 Notes and creates an event of default under the indentures governing the 2011 Notes and the 2012 Notes. The 2011 Notes and 2012 Notes will be immediately due and payable upon the Company's receipt of written notice from either the trustee for such notes or the holders of not less than 25% in aggregate principal amount of each series of notes.