Diatos S.A. Closes Euro 7 Million In A New Financing Round

PARIS, Feb. 25 /PRNewswire/ -- Diatos S.A., a privately-held biopharmaceutical company that develops novel anti-cancer therapies, announced today it has secured Euro 7 million in a new financing round. With this new funding, the total capital raised by Diatos in the last 12 months amounts to Euro 16 million. This investment was led by Innoven Partenaires (France), a venture capital firm, and Biotech Fund Flanders (BFF), a venture fund of the Flanders government (Belgium) managed by the venture capital firm GIMV Life Sciences (Belgium). Previous investors in the 2003 round included Credit Lyonnais Private Equity (France) and NIF Ventures (Japan), with additional participation from existing investors.

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"The proceeds from this financing will be used to support the clinical development of our lead product candidate, DTS-201," said John Tchelingerian, Ph.D., President and Chief Executive Officer of Diatos. "In addition, the funding will enable us to expand our operations in Europe and the United States."

"Diatos' innovative platform technologies and product candidates in development place the company in a leadership position to bring new treatments for serious unmet medical needs such as cancer," said Roland Cohen, M.D., Managing Partner of Innoven Partenaires. "We are enthusiastic about Diatos' potential and look forward to supporting their growth."

Frank Bulens, Ph.D., Executive Investment Manager of GIMV added, "Diatos is a compelling investment for BFF and we are pleased to provide financial assistance to help them achieve their goals."

About DTS-201

The company's lead therapeutic candidate DTS-201, a doxorubicin prodrug based on the TSP technology concept, is currently in late stage preclinical development, and is expected to enter Phase I/II clinical trials during 2004. DTS-201 consists of doxorubicin (a major marketed cytotoxic compound used in treating cancer) conjugated to a proprietary four amino-acid peptide. The conjugated doxorubicin is inactive. Preclinical studies indicate that the peptide to which doxorubicin is conjugated is cleaved off by endopeptidases secreted by cancer cells when the prodrug molecule reaches the vicinity of a tumor, thereby releasing doxorubicin. The free doxorubicin is then expected to exert its cytotoxic effects on the cancer cells. The ability to deliver anti-cancer agents selectively to tumors and limit their effect on normal cells is expected to result in better clinical outcomes both in terms of improved response rates and lower toxicity.

About Diatos

Diatos is using its proprietary Diatos Peptide Vector (DPV) intra-cellular/intra-nuclear delivery technology and its proprietary Tumor-Selective Prodrug (TSP) cancer-targeting technology to develop new therapies for cancer and other serious diseases.

-- Diatos Peptide Vector (DPV) technology enables or significantly enhances selective cellular or nuclear uptake of a broad range of therapeutic compounds, including small molecules, peptides and proteins, antibodies and antibody fragments, oligonucleotides, and nanospheres. -- Tumor Selective Prodrug (TSP) technology enables the release of anti-cancer agents selectively at the sites of tumor cells.

Founded in 1999 as a spin-off from Institut Pasteur, Diatos has raised Euro 33 million to date from Sofinnova Partners (France), GIMV (Belgium), InterWest Partners (USA), Credit Lyonnais Private Equity (France), AGF Private Equity (France), NIF Ventures (Japan), Societe Generale Asset Management (France), Sopartec (Belgium), Innoven Partenaires (France) and BFF (Belgium). Diatos has a total of 35 employees. For more information about Diatos, visit our website at http://www.diatos.com/.

About Innoven Partenaires

Innoven Partenaires is a Paris-based, independent venture capital firm with more than 100 million euros under management. It was founded in 1997 by highly experienced professionals, and has been approved by the French financial authorities (AMF). Since 2001, Innoven Partenaires has been selected to manage the high-tech venture funds of the French Post Office, "LA POSTE." The firm manages a family of eleven funds invested in high-growth European companies developing breakthrough technologies in Life Sciences and Information Technologies (with a focus on Wireless). Invested amounts typically range from Euro 1 M to Euro 8 M through one or several financing rounds. Contact: Dr Roland Cohen, Managing Partner, Phone: +33-1-47-03-18-18; info@innoven-partners.com.

About GIMV and Biotech Fund Flanders (BFF) GIMV

Since its incorporation in 1980, GIMV has grown into Belgium's most important venture capital provider and company-builder. GIMV has now become a major European and international market player. Both in Belgium and abroad, GIMV invests in life sciences, information and communication technology as well as in growth financing and management buy-outs (MBOs) of companies in more traditional sectors. GIMV has a portfolio of more than 150 investments with a net asset value of about Euro 900 million. GIMV has been listed on Euronext Brussels since 1997. For more information on GIMV, please go to http://www.gimv.com/. Contact: Dr Frank Bulens, Executive Investment Manager, Phone: +32-3-290-21-00; FrankB@gimv.be.

Biotech Fund Flanders (BFF)

Since 1994 GIMV manages the Biotech Fund Flanders, a venture fund focused on investments in life science projects in Flanders. The fund, which is sponsored by the Flemish government, has Euro 25 million to make commitments in both Flemish companies and foreign companies that intend to start activities in Flanders. Biotech Fund Flanders provided venture capital for the Flemish biotech start-ups Devgen and CropDesign and product development in existing companies such as PGS and Innogenetics.

CONTACT: Dr John Tchelingerian President & CEO Phone: +33-1-53-80-93-81 jtchelingerian@diatos.com

CONTACT: Dr John Tchelingerian, President & CEO of Diatos S.A.,+33-1-53-80-93-81, or jtchelingerian@diatos.com

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