Panacea Pharmaceuticals, Inc. Announces Extension of Collaboration With Massachusetts Institute of Technology to Engineer Antibodies for HAAH Oncology Program

GAITHERSBURG, Md., Sept. 10 /PRNewswire/ -- Panacea Pharmaceuticals, Inc. announced today that it has extended and expanded its Collaborative Research Agreement with researchers at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts covering the development of all-human, ultra- affinity, single-chain antibodies for the Company's HAAH Oncology Program. The agreement builds on the Collaborative Research Agreement signed in December of 2000.

The Company will continue to fund research activities at MIT up to an additional three years and has an option for exclusive worldwide commercialization rights to antibodies resulting from the collaboration. The research group is led by K. Dane Wittrup, Ph.D., Joseph R. Mares Professor of Chemical Engineering & Bioengineering at MIT.

Currently, antibody drugs and use of antibodies in vivo involve several impediments and limitations, but the antibodies engineered through this breakthrough technology minimize or eliminate the major problems associated with the use of native antibodies. The resulting molecule can be custom engineered to eliminate application-specific issues to facilitate research and product development.

"We've made tremendous progress in producing and isolating highly active antibodies through our collaboration with MIT and are excited to be continuing and expanding our relationship with Dr. Wittrup and his team," stated Kasra Ghanbari, President of the Company. "Each one of these molecules holds tremendous potential to expedite the development of therapeutic agents as well as both in vitro and in vivo diagnostic products based on HAAH."

Background on Yeast Display Technology

The technology utilizes a yeast surface display method for engineering antibody fragments of extremely high affinity. The technology was described in the September 2000 issue of Proceedings of the National Academy of Sciences (vol. 97, no. 20, pg. 10701-10705) entitled, "Directed evolution of antibody fragments with monovalent femtomolar antigen-binding affinity." The paper reported the development of single-chain antibody mutants that possessed the highest monovalent ligand-binding affinity yet reported for an engineered protein by over two orders of magnitude.

Background on HAAH Oncology Program

The Company's HAAH Oncology Program is based on the enzyme human aspartyl (asparaginyl) Beta hydroxylase (HAAH).

HAAH over-expression has been detected in primary tumor tissue of more than twenty tumor types tested to date, including cancers of the pancreas, breast, ovary, liver, colon, prostate, lung, brain, and bile duct. HAAH over- expression has been detected in 99% of tumor specimens (greater than 1000) tested to date and has not been detected in normal or adjacent non-affected tissue.

Recent findings in preclinical studies have indicated that over-expression of HAAH is sufficient to induce cellular transformation, to increase cell motility and invasiveness, and to establish tumor formation in animals. Even partial inhibition of HAAH expression has been shown to have a beneficial effect on tumor cells, causing them to revert to a more normal phenotype as measured by the inhibition of growth, motility, and invasiveness. HAAH is over-expressed on the surface of cancer cells, potentially facilitating detection, drug delivery, and enzyme inhibition.

Panacea signed a Collaboration and License Agreement with MedImmune, Inc. in early 2002 to discover, develop, and commercialize therapeutic agents for the prevention or treatment of human disease based on Panacea's HAAH technology or its pathways. Panacea has retained all rights to the development of diagnostic products based on HAAH.

About Panacea Pharmaceuticals, Inc.

Panacea Pharmaceuticals, Inc. is an emerging biopharmaceutical company focused on utilizing functional genomics and proteomics to develop therapeutics and diagnostics for diseases with substantial unmet clinical need. The Company's product development focus is on novel proteins and biochemical pathways related to cellular regulation and cell cycle abnormalities in oncology as well as both acute and chronic neurodegenerative conditions such as hypoxia-induced cognitive impairment, Parkinson's disease, and Alzheimer's disease. The Company's wholly-owned subsidiary, Proteus Diagnostics, Inc., will be developing in vitro diagnostics including pharmacogenomic and pharmacoproteomic tools for cancer detection, diagnosis, prognosis, treatment selection, and follow-up.

More information is available at http://www.PanaceaPharma.com and http://www.ProteusDx.com.

Except for historical information presented in this press release, matters discussed herein may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on the opinions and estimates of management only as of the date of this release and are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by such statements. Factors that might cause such a difference include, but are not limited to, uncertainties related to our access to capital, the progress, costs, and results of any clinical trials undertaken by us, progress of our research and development projects, and uncertainties related to whether our product candidates would ultimately achieve commercial success. We do not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events, or otherwise unless required by law.