Cytos Biotechnology AG to Raise Up to $40 Million to Advance Phase II Asthma Immunotherapy

Schlieren (Zurich), Switzerland, 21 March, 2012 - Cytos Biotechnology Ltd (´Cytos´ or the ´Company´), a Swiss biotech company developing a new class of biopharmaceutical products called Immunodrugs(TM), today announced that it has signed agreements with an international syndicate of strategic investors (the ´Investment Syndicate´) to raise a total of up to CHF 37 million (USD 40 million) in equity and debt. The investment round is being led by venBio and includes investments by a syndicate including Amgen, Abingworth and Aisling Capital.

The new funds will recapitalize Cytos and enable it to further advance its programs and specifically to conduct a global multi-center Phase IIb clinical trial with its lead product CYT003-QbG10 (´CYT003´) in patients suffering from allergic asthma. CYT003 is a novel allergen-independent immunotherapy with disease-modifying potential that could be used to treat a broad range of different allergies. Cytos will also use the funds to develop additional pipeline programs and to progress its novel Immunodrug(TM) platform on which CYT003 is based.

This transaction completes the financial restructuring announced in 2011 which, as previously announced, also included the restructuring of the Company´s outstanding convertible bonds.

´venBio is pleased to support one of the most promising biotechnology companies in Europe. I am confident that with the support of the Investment Syndicate´s global top-tier investors, we will be able to assist Cytos in realizing the significant potential of its lead Immunodrug(TM) clinical candidate, ´ commented Kurt von Emster, Managing Director of venBio.

´Amgen recognizes there is significant unmet medical need for the treatment of asthma and we are pleased to support the ongoing development of CYT003, a novel immunotherapy based treatment approach which has already generated promising data in a number of earlier clinical studies, ´ said Dr. Sean Harper, Amgen´s Executive Vice President, Research and Development.

´Abingworth is delighted to be working with Cytos and our co-investors to help the company progress this important program in asthma´ said Partner Dr. Joseph Anderson. ´We see potential for significant value creation through this venture investment in public equity.´

PD Dr. Kai-Michael Beeh from the insaf Respiratory Research Institute, who has been the principal investigator of a positive Phase II study conducted with CYT003 in asthma patients, said: ´Asthma control remains an important therapeutic goal which unfortunately cannot be achieved in a significant proportion of patients using current treatment options. CYT003 offers an exciting new approach to asthma therapy that could provide patients with a therapeutic alternative to either replace or complement commonly used asthma medications, such as inhaled corticosteroids, while maintaining or improving asthma control.´

Dr. Thomas Hecht, Executive Chairman of Cytos, said: ´The Board of Directors and the Management are excited that such a prestigious syndicate of renowned investors have decided to recapitalize Cytos in one of Europe´s largest biotech financings so far this year. This recapitalization will enable us to conduct a Phase IIb clinical trial with CYT003, which, if successful, would be a very significant value-inflection point for the Company and which would also be important for Cytos´ ability to repay its restructured convertible bonds on February 20, 2015.´

Further details of the transaction

The financing of up to CHF 37 million committed by the investment syndicate will be a combination of CHF 23.75 million of equity (priced at CHF 1.87 per share, representing the 60 day average closing price prior to March 20, 2012) and CHF 13.25 million in secured convertible loan notes (with a conversion price of CHF 2.244 per share) payable in two tranches of CHF 6.625 million each (the ´Convertible Loan Notes´), whereby the second tranche of CHF 6.625 million is subject to Cytos achieving certain milestones in connection with a proposed Phase IIb study of CYT003. Each investor of the investment syndicate will also receive one warrant (exercise price of CHF 2.244) for each new share subscribed for and issued to such investor (the ´Warrants´). Furthermore, existing shareholders will be able to participate in this financing by way of a rights offering of up to additional CHF 5 million (i.e. up to 2´673´796 shares of Cytos with a nominal amount of CHF 0.10 each for a price of CHF 1.87 per share, whereby 15 shares held entitle its holder to subscribe for 7 new shares).

The capital increase mentioned above in the total amount of up to CHF 28.75 million will result in the issuance of up to 15´374´328 new shares of Cytos with a nominal value of CHF 0.10 each.

Further, up to 2´348´264 additional shares (representing 10% of Cytos´ total share capital outstanding after the capital increase mentioned in the previous paragraph) will be issued and acquired by Cytos at nominal value and held as treasury shares to serve primarily as underlying for the Warrants and the Convertible Loan Notes.

The shareholders will be asked to approve the transaction as such and in particular (i) this capital increase which will result in a total of up to 17´722´592 new shares of Cytos and (ii) the creation of conditional and authorized capital (each providing for the issuance of up to 11´741´324 shares with a nominal value of CHF 0.10 per share) (the ´Shareholders´ Approval´).

Cytos intends to seek the Shareholders´ Approval at its annual shareholders meeting, planned for April 2012. The invitation and agenda for this meeting will be sent to shareholders shortly.

The transaction is, among other conditions precedent, conditional upon Shareholders´ Approval and the Investment Syndicate receiving an exemption from the Swiss Takeover Board from the requirement to make an offer for the shares of the Company. Immediately after the implementation of the capital increase, the Investment Syndicate is expected to hold 12´700´532 shares of Cytos representing approximately 54% of the then outstanding shares (assuming the 2´673´796 shares of Cytos offered to its existing shareholders are fully taken up). Should all Warrants be exercised, Cytos would receive additional cash of CHF 28.5 million and the Investment Syndicate would hold a total of approximately 80% of the then outstanding share capital (assuming the conversion of all Convertible Loan Notes).

Changes to the Board of Directors

The Company and the Investment Syndicate further agreed that, subject to election by the shareholders at the forthcoming shareholders meeting, Dr. Arthur Krieg (CEO of RaNA Therapeutics and co-founder of Coley Pharmaceuticals), John Berriman (Deputy Chairman of Algeta), Kurt von Emster (venBio), Paul Brooke (venBio) and Dr. Joe Anderson (Abingworth) shall join the Cytos´ Board of Directors as non-executive Directors effective as of closing of the transaction. Dr. Thorlef Spickschen whose term expires at the next ordinary shareholders´ meeting will not stand for re-election.

About CYT003-QbG10 for treating allergic diseases

CYT003 is a novel allergen-independent immunotherapy with disease-modifying properties that has the potential to treat allergic asthma and a broad range of different allergies. CYT003 has been shown in recent Phase I/IIa clinical trials in allergic asthma and rhino-conjunctivitis to be well tolerated and efficacious. CYT003 has been developed using Cytos´ innovative Immunodrug(TM) platform and uses a novel approach to immunotherapy that targets toll-like receptor 9. This unique approach modifies the patient´s immunological response to allergens and has the potential to alter asthma therapy dramatically.

Background on the Investment Syndicate

Abingworth

Abingworth is an international investment group dedicated exclusively to the life sciences and healthcare sector. The company invests at all stages of development including early and late-stage venture financing, growth equity and public companies. Founded in 1973, Abingworth has a lengthy track record of backing market-leading companies. Abingworth has a specialist team of 20 professionals with both a broad range of skill sets and access to an extensive network of industry contacts. Abingworth has funds under management of over $1.25 billion and offices in London, Menlo Park (California) and Boston. www.abingworth.com

Aisling

Aisling Capital, a leading private equity firm headquartered in New York with US$1.7 billion under management, invests in products, technologies and businesses that advance health. In addition to investing in companies developing pharmaceutical, biopharmaceutical and medical products, Aisling invests in businesses that provide drug development, manufacturing and other important services to the healthcare industry. www.aislingcapital.com

venBio

venBio is a strategic investment firm, partnering with life science leaders to invest in novel medicines and technologies in the advancement of health care. The firm manages private equity funds backed by leading life sciences companies and qualified financial investors. venBio´s investment focus is on clinical stage private and public small cap companies with a therapeutic product, and to a lesser extent medical technologies that enable better care for patients. venBio has six investing partners and operates out of San Francisco and New York. www.venBio.com

For further information please contact:

Cytos Biotechnology Ltd

Harry Welten

Chief Financial Officer

Tel.: +41 44 733 46 46

e-Mail: harry.welten@cytos.com

Website: www.cytos.com

About Cytos Biotechnology Ltd

Cytos Biotechnology Ltd is a Swiss public biotechnology company that specializes in the development and commercialization of a new class of biopharmaceutical products - the Immunodrugs(TM). Immunodrugs(TM) are intended for use in the treatment and prevention of common chronic diseases, which afflict millions of people worldwide. Immunodrugs(TM) are designed to instruct the patient´s immune system to produce the desired therapeutic antibody or T cell responses that modulate chronic disease processes. Cytos´ Immunodrug(TM) candidates are being developed both in-house and together with Novartis, Pfizer and Pfizer Animal Health. Founded in 1995 as a spinoff from the Swiss Federal Institute of Technology (ETH) in Zurich, the Company is located in Schlieren (Zurich). Cytos Biotechnology Ltd is listed on the main segment of the SIX Swiss Exchange Ltd under the symbol CYTN.

This foregoing press release may contain forward-looking statements that include words or phrases such as ´are intended for´, ´are designed to´, or other similar expressions. These forward-looking statements are subject to a variety of significant uncertainties, including scientific, business, economic and financial factors, and therefore actual results may differ significantly from those presented. There can be no assurance that any further therapeutic entities will enter clinical trials, that clinical trial results will be predictive for future results, that therapeutic entities will be the subject of filings for regulatory approval, that any drug candidates will receive marketing approval from the U.S. Food and Drug Administration or equivalent regulatory authorities, or that drugs will be marketed successfully. Against the background of these uncertainties readers should not rely on forward-looking statements. The Company assumes no responsibility to update forward-looking statements or adapt them to future events or developments.

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