Scope Establishes Strong Licensing Potential, Barriers to Entry for Competitors

Epicyte Pharmaceutical, Inc., a drug discovery company that produces antibodies for infectious and inflammatory diseases, today announced the issuance of a broad U.S. patent covering technology developed by Epicyte scientists to produce antibodies in transgenic plants.

The patent claims any transgenic plant that expresses any antibody, including human monoclonal antibodies. Epicyte will use this technology to produce its antibody pipeline and to address capacity constraints in the antibody-based therapeutics market which is estimated to reach $8 billion by 2004.

The patent -- #6,417,429 -- was issued today to The Scripps Research Institute, where Epicyte founders, Andrew Hiatt, Ph.D., and Mich Hein, Ph.D., developed the technology. The patent broadly claims any transgenic plant that expresses an antibody from any animal species. The technology could lead to production of promising new treatments for infectious and inflammatory diseases not addressed by current therapies.

"This patent expands the scope of Epicyte's already very strong patent estate," said Dr. Hiatt, vice president of research and development at Epicyte. "It positions Epicyte as the dominant player in this potentially very large market. This technology is scalable, cost-effective and has tremendous licensing potential. It could lead to the widespread application of monoclonal antibody therapeutics to treat many common diseases that affect large populations, such as infectious and inflammatory diseases. The pharmaceutical industry currently can't address these diseases with monoclonal antibodies primarily because the manufacture of antibodies in large quantities is cost prohibitive."

Epicyte's technology enables the development of a broad spectrum of novel monoclonal antibodies for
inflammatory, infectious and other diseases by providing a plant-based manufacturing system in transgenic plants, such as corn. The method allows large scale manufacturing capability for the first time and enables Epicyte and its licensees to focus on therapeutics requiring large amounts of antibodies to treat extensive patient populations. Resulting drugs are more cost-effective and extend the delivery options for antibody drugs from injectable to those that can be administered topically, via
inhalants or by oral administration.

Even with the limited production capacity of previous methods, monoclonal antibodies (MAbs) make up the largest segment of biotechnology's product pipeline, forming the basis of a multi-billion dollar industry. Some analysts are projecting a production capacity shortfall for new and existing pharmaceuticals by 2010. Currently, approximately 25 percent of all R&D investments go to MAbs, and nearly 500 compounds are estimated in research and development.

This is the fourth United States patent granted for Plantibodies(TM) technology developed by Epicyte scientists; the company has rights to corresponding granted patents in Japan, Europe and Australia. The issuance extends Epicyte's patent portfolio to three issued patents and exclusive licenses to nine issued or allowed patents in the United States. Epicyte has 46 additional patent applications filed in the United States, with corresponding applications in major industrial nations. Epicyte also has a number of existing licensing agreements in place that grant rights to other companies for the development of certain antibodies.

Epicyte recently was named one of 50 private companies "most likely to change the world" by the editors of Red Herring, in the publication's June 2002 annual Red Herring 100 issue. In preparation for an IND filing, Epicyte, in partnership with Dow, has begun the production of its lead compound HX8, a monoclonal antibody capable of complete viral neutralization of herpes simplex virus (HSV) in preclinical models, and R-19, a treatment for respiratory syncytial virus (RSV). Epicyte's discovery and
development efforts also focus on building a pipeline of monoclonal antibodies for the treatment of patients with other major healthcare problems, including Clostridium difficile, Alzheimer's disease and HIV.

Epicyte's current partners include The Dow Chemical Co., Medarex and Centocor, a wholly owned subsidiary of Johnson & Johnson, and the U.S. government.

Epicyte Pharmaceutical Inc. is a biopharmaceutical company focused on the discovery and development of therapeutics to treat inflammatory and infectious diseases. The company's proprietary technology for producing antibodies in plants allows Epicyte to address an unmet need -- making antibody treatments for common infectious diseases in large enough quantities for widespread use. High production costs associated with traditional methods for producing antibodies have limited their use as a disease treatment. Epicyte's technology for growing antibodies in plants is scalable and cost effective. For additional information visit www.epicyte.com.