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XTL Biopharm Ltd (XTL)

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Tuesday 16 January, 2007

XTL Biopharm Ltd

XTL Announces the In-Licensing of Bicifadine


       XTL Biopharmaceuticals Announces the In-Licensing of Bicifadine -       
     A Late-Stage Clinical Compound for the Treatment of Neuropathic Pain      

NEW YORK, NEW YORK, January 16, 2007 - XTL Biopharmaceuticals Ltd. (NASDAQ:
XTLB, LSE: XTL, TASE: XTL) announced today that, through a wholly-owned
subsidiary, it has signed an agreement with DOV Pharmaceutical, Inc. (PS:
DOVP.PK) to in-license the worldwide rights for Bicifadine, a serotonin and
norepinephrine reuptake inhibitor (SNRI).

XTL intends to develop Bicifadine for the treatment of neuropathic pain - a
chronic condition resulting from damage to peripheral nerves. With 15 million
people suffering from neuropathic pain in the United States alone, and limited
treatment options available, neuropathic pain represents a significant unmet
medical need. According to Datamonitor, the market for neuropathic pain drugs
is expected to grow from $1.8 billion in 2005 to $5.5 billion by 2015.

Bicifadine is a serotonin and norepinephrine reuptake inhibitor (SNRI). Other
members of the SNRI class include Cymbalta® (approved for depression and
neuropathic pain), and Effexor® (approved only for depression). Both Cymbalta®
and Effexor® have been shown to be efficacious in neuropathic pain. Activity on
norepinephrine reuptake is thought to be necessary for anti-depressants to be
effective in neuropathic pain.

Compared to the currently approved SNRI's, Bicifadine has a unique ratio of
serotonin versus norepinephrine reuptake inhibition, which is weighted toward
norepinephrine reuptake inhibition, providing a strong scientific rationale for
using Bicifadine for the treatment neuropathic pain indications.

Bicifadine has been tested extensively in over 15 clinical trials involving
over 3,000 patients, and has been shown to be safe and generally well
tolerated. Bicifadine was evaluated in various pain indications, including two
large, randomized clinical trials (n=750 and n=540) in patients suffering from
acute (non-neuropathic) pain, where Bicifadine demonstrated statistically
significant efficacy.

Dr. Christine Sang, Director of Translational Pain Research at the Brigham and
Women's Hospital, Harvard Medical School, commented, "Neuropathic pain
continues to be an area of growing unmet medical need, and I believe that
Bicifadine represents an exciting potential treatment option. Clinical data
clearly support the role of SNRI's for the treatment of neuropathic pain. Based
on its mechanism of action that includes a unique ratio of serotonin versus
norepinephrine reuptake inhibition, the demonstrated effect of other SNRI's in
this disease area, and the activity it has demonstrated in acute pain studies,
I have a high degree of confidence that Bicifadine could be successfully
developed as a treatment for neuropathic pain."

Ron Bentsur, XTL's Chief Executive Officer, commented, "This is a very
important event for XTL, as this in-license transforms us immediately into a
late-stage development company. It is rare to come across an opportunity such
as Bicifadine, a drug candidate that addresses a multi-billion dollar market,
in a class with a proven mechanism of action, and with an established safety
profile and clear evidence of activity in the treatment of pain." Mr. Bentsur
added, "By re-directing the development of Bicifadine away from the novel
indications in acute and chronic pain toward a proven area of efficacy of
SNRI's in the treatment of neuropathic pain, we believe we can be the second
approved SNRI for neuropathic pain, offering a differentiated efficacy and
possibly safety profile based on the drug's emphasis on norepinephrine reuptake
inhibition. We are excited to bring Bicifadine on board as our lead compound."

In accordance with the terms of the license agreement, XTL will make an
up-front payment of $7.5 million in cash. In addition, XTL will make milestone
payments of up to $126.5 million, in cash and/or XTL ordinary shares over the
life of the license, of which up to $115 million will be due upon or post
approval of the product. XTL is also obligated to pay royalties on net sales of
the product to DOV. In addition, the Company has committed to pay a transaction
advisory fee in the form of stock appreciation rights in the amount equivalent
to 3% of the Company's current fully diluted ordinary shares, vesting after one
year of the close of the transaction, and 7% of the Company's current fully
diluted ordinary shares, vesting following successful Phase 3 clinical trial
results or the acquisition of XTL. Payment of the stock appreciation rights by
XTL can be satisfied, at XTL's discretion, in cash and/or by issuance of the
Company's ordinary shares.

ABOUT BICIFADINE

Bicifadine is a serotonin and norepinephrine reuptake inhibitor (SNRI) being
developed by XTL for the treatment of neuropathic pain. Bicifadine was licensed
by XTL from DOV Pharmaceutical, which originally licensed it from Wyeth
Pharmaceuticals.

Four Phase 1 clinical trials and 14 Phase 2 clinical trials involving more than
1,000 patients were conducted by Wyeth or DOV with an IR (immediate release)
formulation of Bicifadine. In five exploratory double-blind, placebo-controlled
Phase 2 clinical trials of the IR formulation conducted by Wyeth, Bicifadine
demonstrated a statistically significant reduction in pain versus placebo, in
some cases with an outcome suggesting it might be comparable to or better than
positive controls such as codeine. In addition to these trials with the IR
formulation, eight Phase 1 clinical trials using the SR (sustained release)
formulation have been conducted, a formulation that permits less frequent daily
dosing, improves tolerability and for which patents have been filed. It is
intended that the SR formulation will be used in future clinical development
and for commercial use

In two additional and larger (n=750 and n=540) single-dose, double-blind,
placebo-controlled clinical trials with Bicifadine in the treatment of moderate
to severe post-surgical acute dental pain, Bicifadine produced a highly
statistically significant, dose-related reduction in pain compared to placebo,
and which was comparable to a positive control arm (codeine or Tramadol). Both
trials demonstrated Bicifadine to be safe and generally well-tolerated without
producing any serious adverse events.

In a Phase 3 double-blind, placebo-controlled, clinical trial (n=325) with
Bicifadine in the treatment of moderate to severe acute pain following
bunionectomy surgery, statistically significant increases in analgesia were
measured as early as 30 minutes after administration and these effects were
sustained for the balance of the eight-hour measurement period. In this study,
Bicifadine was safe and generally well-tolerated. The complete assessment of
the analgesic action of Bicifadine under repeat dosing conditions could not be
fully elucidated due to the high level of "rescue" analgesic medication used in
both the placebo and active drug groups.

Due to the highly competitive nature of the market for acute pain drugs, and
the FDA requirement to complete two repeat-dosing clinical trials in two
different acute pain indications, no further studies in acute pain are planned.

Bicifadine has been further evaluated in three Phase 3 trials in Chronic Lower
Back Pain (CLBP). The primary efficacy endpoint in these trials was the change
in pain severity rating score between baseline and the end of dosing. In these
trials, Bicifadine was safe and generally well tolerated, but did not show a
statistically significant effect relative to placebo on the primary endpoint of
the study at any of the doses tested.

XTL believes that the failure of Bicifadine in the CLBP trials was a result of
the inherent heterogeneity of the studied patient population (i.e. the varying
causes of CLBP pain), uncontrolled physical activities in what is largely an
activity-dependent pain indication, and a high placebo response.

XTL believes that by re-directing the development of Bicifadine away from the
novel indications in acute and chronic pain toward a proven area of efficacy of
SNRI's in the treatment of neuropathic pain, Bicifadine could be successfully
developed to be the second approved SNRI for neuropathic pain, offering a
differentiated efficacy and possibly safety profile based on the drug's
emphasis on norepinephrine reuptake inhibition.

ABOUT XTL BIOPHARMACEUTICALS LTD.

XTL Biopharmaceuticals Ltd. ("XTL") is engaged in the acquisition, development
and commercialization of therapeutics for the treatment of neuropathic pain and
hepatitis C. XTL is developing Bicifadine, a serotonin and norepinephrine
reuptake inhibitor, for the treatment of neuropathic pain. In addition, XTL is
developing XTL-2125 - a small molecule, non-nucleoside inhibitor of the
hepatitis C virus polymerase. XTL-2125 is currently in a Phase 1 clinical trial
in patients with chronic hepatitis C. XTL is also developing XTL-6865 - a
combination of two monoclonal antibodies against the hepatitis C virus -
presently in Phase 1 clinical trials in patients with chronic hepatitis C.
XTL's hepatitis C pipeline also includes several families of pre-clinical
hepatitis C small molecule inhibitors.  XTL also has an active in-licensing and
acquisition program designed to identify and acquire additional drug
candidates. XTL is publicly traded on the NASDAQ, London, and Tel-Aviv Stock
Exchanges (NASDAQ: XTLB; LSE: XTL; TASE: XTL).

Contact:
Ron Bentsur, Chief Executive Officer
Tel: +1-(212)-531-5960

Cautionary Statement
Some of the statements included in this press release, particularly those
anticipating future clinical and business prospects for our clinical compound
for neuropathic pain, Bicifadine, operating strategies and similar matters, may
be forward-looking statements that involve a number of risks and uncertainties.
For those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Among the factors that could cause our actual results to
differ materially are the following: our ability to successfully complete
cost-effective clinical trials for the drug candidates in our pipeline which
would affect our ability to continue to fund our operations with our available
cash reserves, our ability to meet anticipated development timelines for the
drug candidates in our pipeline due to recruitment, clinical trial results,
manufacturing capabilities or other factors; and other risk factors identified
from time to time in our reports filed with the Securities and Exchange
Commission and the London Stock Exchange, including our annual report on Form
20-F filed with the Securities and Exchange Commission on May 25, 2006. Any
forward-looking statements set forth in this press release speak only as of the
date of this press release. We do not intend to update any of these
forward-looking statements to reflect events or circumstances that occur after
the date hereof. This press release and prior releases are available at http://
www.xtlbio.com. The information in our website is not incorporated by reference
into this press release and is included as an inactive textual reference only.


                                                                                                                                                                                   

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