Viragen, Inc. and NASA’s Lyndon B. Johnson Space Center (“JSC”)
jointly announced today that they have entered into a Space Act Agreement to
determine the utility of NASA’s bioreactor technology in VRA’s proprietary
production technology.

Experiments executed by NASA’s astronauts on shuttle flights and on the
space station itself have demonstrated that outer space appears to be a much
more friendly environment for delicate human cells.
Consequently, NASA
designed and built a new generation of bioreactors on earth, which mimic outer
space’s weightlessness.
In order to produce interferon from delicate human
white blood cells (leukocytes), a virus or other stimulator is exposed to
living leukocytes in a vessel called a bioreactor.
Then the interferon is
separated from other proteins through VRA’s proprietary purification process.
The first step in the project will determine if NASA’s bioreactors will cause
these cells to produce more natural interferon.
Any increase in interferon
yield would serve to reduce VRA’s production costs as well as demonstrating
the applicability of the bioreactor designed for other biopharmaceutical

Mr. Henry L. Davis, Director, JSC’s Technology Transfer &
Commercialization Office noted, “The relationship between JSC and Viragen is a
prime example of how a U.S. biotechnology company could utilize and benefit
from cutting edge technologies developed by NASA in its space program.
application of micro-gravity research to Viragen’s production technology could
potentially lead to the development of novel and cost effective therapeutic
agents for life-threatening human disorders such as cancer, hepatitis and
infectious diseases.
This partnership could herald a new era of participation
and cooperation with the biotechnology industry and result in the accelerated
development of more efficient and cost-effective pharmaceuticals.
This is
consistent with the fundamental purpose of space exploration, that is to
ultimately benefit mankind on this planet.”

Mr. Davis explained, “In the legislation that created the Agency, NASA is
mandated to disseminate the greatest amount of information possible resulting
from its R&D efforts for the benefit of all Americans.
Access to cutting-edge
technologies available for commercialization is provided through a variety of
mechanisms including Space Act Agreements.
Partnerships with the private
sector not only accomplish NASA’s technology transfer mission but also benefit
the Agency by providing access to ”real world“ needs and expertise that can
help NASA move toward its mission of space exploration and colonization.
partnership with Viragen will enable NASA JSC to understand how their
technology can be used in the production of pharmaceutical products both on
earth and in future space habitats.”

Dr. Dennis R. Morrison, JSC’s Senior Biotechnology Project Scientist
stated, “NASA’s Rotating Wall Vessel Bioreactors (RWV) imitate some
micro-gravity conditions under which cultured human white blood cells
experience significantly reduced shear.
Our previous space flight experiments
have shown that Interferon production is enhanced in true micro-gravity.
have evidence that certain biochemical signals within the cells are changed in
micro-gravity and in our low-shear bioreactors.
The objective of the
collaborative experiments will be to determine if the enhanced production can
be achieved on Earth using our novel bioreactors in combination with
proprietary Interferon inducers.
This effort will enable us to not only
determine if this environment increases yield but also if novel interferon
subtypes are produced in addition to those already contained in VRA’s
leukocyte-derived natural interferon alpha, Omniferon(TM).
We will also
determine whether there is an increase in the drug’s potency which could
result in a reduction of the required dosage and the frequency of injection
for a patient’s treatment.
This collaboration also could potentially lead to
applications useful in the production of other products from human immune
cells, s.a. monoclonal antibodies.”

VRA’s Chairman and CEO, Mr. Gerald Smith, stated, “VRA’s search for ways
to further reduce the cost of drug production reflects its desire to do
everything it can to make the price of treatment more affordable to patients
and the institutions that serve them.
This is the first step of an important
collaboration designed to determine the practical benefits to be derived from
space age bioreactor technology.”

Viragen worked with NASA’s Southeast Regional Technology Center,
headquartered at the University of Florida, to facilitate the relationship
with JSC.

Viragen, Inc. is engaged in the research, development and manufacture of
immunomodulatory therapeutic products, including natural human interferon and
human monoclonal antibodies for the treatment of various diseases and immune
Produced in its Scottish facility, VRA’s lead drug, Omniferon, is
currently in Phase II clinical trials in Europe for hepatitis C, a disease
estimated to afflict tens of millions worldwide.
VRA has a collaborative
agreement with the Common Services Agency of the United Kingdom; preferential
access to white blood cells collected by the German Red Cross and America’s
Blood Centers; and a white blood cell supply agreement with the American Red
Viragen is also collaborating with Memorial Sloan-Kettering Cancer
Center for the development of a human monoclonal antibody for the treatment of
melanoma and other cancers.

The foregoing press release contains forward-looking statements that can
be identified by terminology such as “expects,” “potential,” “suggests,”
“may,” “will,” 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.
particular, management’s expectations regarding future research development
results could be affected, by among other things, uncertainties relating to
clinical trials and product development; 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.