Viragen Reports Avian Transgenic Breakthrough: OVA(TM) System Expresses Interferon-Beta

PLANTATION, Fla., Jan. 18 /PRNewswire-FirstCall/ -- Viragen, Inc. today announced that the Company's scientists, along with its collaborators at the Roslin Institute and Oxford BioMedica plc, have successfully achieved expression of significant quantities of the human protein, interferon beta-1a, in the whites of eggs laid by transgenic hens using the OVA(TM) System (Avian Transgenic Biomanufacturing). Interferon-beta is a key component of the human immune system and is the active ingredient in several leading multiple sclerosis (MS) therapies. These results are the first in a series of anticipated milestones demonstrating "Proof-of-Principle" with an avian-expressed version of interferon-beta, and it is expected that the OVA(TM) System will be capable of cost-effectively expressing many types of therapeutic proteins.

Viragen and Roslin are conducting avian expression studies on various protein candidates including interferon beta-1a, which is currently marketed under two competing brand names for the treatment of MS. These MS products are Avonex(R)*, marketed by Biogen Idec, and Rebif(R)**, marketed by Serono, with combined annual global sales over $2.5 billion.

The Project's Scientific Leader, Dr. Helen Sang of Scotland's Roslin Institute, commented, "We are extremely pleased to report this key advance in our program to develop a preferred platform for the production of selected biopharmaceutical proteins, having now successfully developed transgenic hens that are synthesizing significant quantities of interferon-beta as a component of their egg white. This is the second protein candidate with which we have achieved promising results, as we previously reported expression and recovery of a functional humanized antibody. As we fully characterize the interferon- beta that is recovered, both biochemically and by functional tests, we expect such results will confirm our progress."

"This is a truly remarkable achievement for our team in Scotland and represents a major event towards our goal to definitively position the OVA(TM) System as a revolutionary transgenic bio-manufacturing alternative," stated Dr. Karen Jervis, Vice President and Managing Director of Viragen (Scotland) Ltd. "We will continue to collect eggs from these hens and subsequent generations to confirm quality and quantity of the protein. In addition, we will be analyzing the carbohydrate profile of the product, which may represent another key advantage to OVA(TM)-expressed proteins. Certain biotech drugs require post-translational modifications in order that the drug retains its full efficacy and is well tolerated when used as a human therapeutic. Although we must confirm the nature of the modifications conferred by the OVA(TM) System, we are hopeful that avian transgenic production may be able to retain these beneficial modifications, which may in turn translate to a lower cost of goods and a more economical process."

While more data are required to provide a precise economic model, Viragen's President & CEO, Charles A. Rice, stressed the significance of this achievement, "We are continuing to report historic scientific breakthroughs, as we achieve the essential prerequisites to develop a viable, cost-effective, transgenic bio-manufacturing system. To imagine the potential, based on the highest expression levels we have found, it is conceivable that a small flock of a couple of hundred hens could satisfy the entire U.S. market demand for interferon beta-1a. These figures are preliminary, but certainly suggest why this technology might be so desirable to a company seeking new benefits in the manufacturing of current and future products. We congratulate our Scotland teams at VSL and the Roslin Institute for their commitment, patience, perseverance and fine work on this important project, and we look forward to even more dramatic results throughout this year."

*Avonex(R) (interferon beta-1a) is a registered trademark of Biogen Idec, Inc.

** Rebif(R) (interferon beta-1a) is a registered trademark of Serono, Inc.

Viragen has no agreements with Biogen Idec or Serono and did not collaborate with either company in connection with these avian expression studies.

About the OVA(TM) System:

Viragen holds the worldwide exclusive license to commercialize the OVA(TM) System (Avian Transgenic Biomanufacturing) as granted by the Roslin Institute (Scotland). The project is designed to develop the chicken into a pharmaceutical bioreactor, one that can meet the growing need for protein- based human therapeutics. Based on the creation of lines of transgenic hens which have been engineered to produce a target protein in their eggs using the LentiVector(R) gene delivery system licensed from Oxford BioMedica plc, this technology is being developed as an efficient and economical alternative to standard bio-manufacturing techniques, having many apparent advantages in ease of scale-up, lower costs of production and quality of product produced.

This project has been funded in part from a grant awarded by the Scottish Executive's "SPUR Plus Program", designed to support significant technological advances being made in Scotland.

About Viragen, Inc.:

With global operations in the U.S., Scotland and Sweden, Viragen is a biotechnology company engaged in the research, development, manufacture and commercialization of pharmaceutical proteins for the treatment of viral diseases and cancers. Our product portfolio includes: Multiferon(R) (multi- subtype, natural human alpha interferon) targeting a broad range of infectious and malignant diseases; and humanized monoclonal antibodies targeting specific antigens over-expressed on many types of cancers. We are also pioneering the development of Avian Transgenic Technology, with the renowned Roslin Institute, as a revolutionary manufacturing platform for the large-scale, efficient and economical production of human therapeutic proteins and antibodies.

For more information, please visit: http://www.Viragen.com Viragen, Inc. Corporate Contact: Douglas Calder, Director of Communications Phone: (954) 233-8746; Fax: (954) 233-1414 E-mail: dcalder@viragen.com

The foregoing press announcement contains forward-looking statements that can be identified by such terminology such as "expects," "potential," "suggests," "may," "should," "could" or similar expressions. Such forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. In particular, management's expectations regarding future research, development and/or commercial results could be affected by, among other things, uncertainties relating to clinical trials and product development; availability of future financing; unexpected regulatory delays or government regulation generally; the Company's ability to obtain or maintain patent and other proprietary intellectual property protection; and competition in general. Forward-looking statements speak only as to the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

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CONTACT: Douglas Calder, Director of Communications, Viragen, Inc.,+1-954-233-8746, or fax, +1-954-233-1414, or dcalder@viragen.com

Web site: http://www.viragen.com/