Epistem services for EBI

EpiStem Holdings plc
01 April 2008


For Immediate Release: April 1st 2008


Epistem to Provide Preclinical Efficacy Testing Services for Exponential
Biotherapies

Epistem (LSE:EHP) announced today that Exponential Biotherapies, Inc (EBI). of
Virginia, USA, have contracted Epistem to provide their specialised preclinical
efficacy testing services for agents likely to protect the gastrointestinal
tract against radiation damage.  The first compound that Epistem will assess is
EBI's lead candidate drug, EA-230, which is a small peptide immunoregulator,
which has shown the potential to treat (minimise) radiation insult and could
therefore be administered following a terrorist nuclear attack to reduce the
level of intestinal related radiation sickness.

Epistem is a world leader in supplying assays that measure qualitatively and
quantitatively the effects of radiation damage on the stem cells in the gut.
Epistem's assays show the effects of agents developed to protect the very
sensitive cells of the gut.  These assays were chosen by the National Institutes
of Health (NIH) Medical Countermeasures against Radiological and Nuclear Threats
(MCART) programme and Epistem also works with a number of pharmaceutical
companies developing new drugs candidates with the potential to treat mucositis,
the erosion of the lining of the mouth and gut, which is a very common side
effect of radiation therapy used during cancer treatment. The assays provide
quantitative and mechanism of action data to assess the efficacy of novel drug
candidates, and help define optimum dose scheduling for progression to the
clinical phases in this very important area of oncology supportive care.

Dr Zsolt Harsanyi, the Chairman and Chief Executive of Exponential Biotherapies,
Inc. said 'Epistem's well established assays and unrivalled expertise in the
field of gastrointestinal epithelial radiation toxicity are extremely valuable
to us in confirming the potential of EA-230 as a therapeutic treatment for
radionuclear attack'.

Dr Catherine Booth, head of Epistem's contract research division commented:  'We
are looking forward to working with EBI to assess the therapeutic potential of
EA-230.  If it is able to improve gastrointestinal wound healing following
radiation exposure it may have widespread applications in biodefence, oncology
supportive care (the area for which we first developed and validated these
assays), and possibly in other related intestinal wound healing situations, such
as inflammatory bowel disease.'

For further information, please contact:


Matthew Walls                      [phone]

CEO

Epistem Ltd.

Mike Wort / Anna Dunphy            [phone]

Financial PR/IR

De Facto Communications


Notes to Editors:


About Epistem


Epistem is a biotechnology company commercialising its expertise in epithelial
stem cells in the areas of oncology, gastrointestinal diseases and
dermatological applications. Epistem develops innovative therapeutics and
biomarkers and provides contract research services to drug development
companies. The Group's expertise is focused on the regulation of adult stem
cells located in epithelial tissue, which includes the gastrointestinal tract,
skin, hair follicles, breast and prostate. Epistem does not conduct research in
the areas of embryonic stem cells or stem cell transplantation.


Epistem operates three distinct business divisions, Contract Research Services,
Novel Therapies and Biomarkers.


Contract Research Services

Contract Research Services provides specialised preclinical efficacy testing
primarily for drug development companies on a 'fee for service' basis. This
division on a standalone basis is cash generative and profitable with a
seven-year track record of providing testing services to over 72 international
company clients primarily in Europe and the United States.


Novel Therapies

Novel Therapies is focused on developing its own innovative therapeutics.
Through its discovery platform, Novel Therapies has identified 250 potential
drug candidates, of which a subset are undergoing further evaluation and
characterisation as stem cell regulators for the Group's emerging drug
development pipeline.


Biomarkers

The emerging biomarker technology leverages the Company's knowledge of the
behaviour of epithelial stem cells and drug-induced gene expression change to
measure drug effects during treatment.  Changes in gene expression can be
detected within hours and at low levels of chemotherapy or radiation. The highly
sensitive Biomarker technology is based on using mRNA extracted from the bulb of
cells at the base of a single hair follicle as a minimally invasive process to
measure gene expression changes in epithelial tissue.


Combined Business Model

Epistem is exploiting its combined business model to advance its own therapeutic
candidates to late preclinical stage development. The business model integrates
the discovery efforts of Novel Therapies with the efficacy testing assays of its
Contract Research Services Division, to identify and characterise new drug
candidates. Revenues generated by Contract Research Services and Biomarkers will
assist in offsetting Novel Therapies' investment requirements for the discovery
and development of its lead therapeutics. The Directors believe that licensing
partnerships will be forthcoming for therapeutics, biomarkers and
dermatologicals in 2008.


About Exponential Biotherapies, Inc.

Exponential Biotherapies, Inc. ('EBI') is a Virginia based drug discovery and
development company with a growing pipeline of novel small molecule drugs to
treat a wide range of severe inflammatory disorders such as septic shock, renal
failure, radiation sickness and avian influenza. These compounds represent a new
class of immune regulating therapeutic agents. The Company's first candidate
drug, EA-230, is about to enter Phase II clinical trials following a successful
Phase I in which the drug was safely tolerated in both single and multi-dose
studies as well as the LPS proof of concept, Phase I Expansion.

The Company has licensed a family of chemically synthesized biomolecules (the '
Compounds') that regulate the immune response. These biomolecules can either
increase or decrease the activity of the immune system by affecting the activity
of one or more of the components of the immune cascade.



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