Viragen Reports Expression Breakthrough Using OVA(TM) System for Therapeutic Protein Production

Single Egg Contains Enough Interferon to Treat 15 HCV Patients

PLANTATION, FL, USA | May 7, 2007 | Viragen, Inc. (Amex: VRA; "VRA.U"; "VRA.WS") and its collaborative partners in the field of avian transgenics, Roslin Institute and Oxford Biomedica (LSE: "OXB"), today announced a significant breakthrough in the development of the OVA(TM) System, resulting in a more efficient bio-manufacturing platform for the cost- effective production of human therapeutic proteins. The OVA(TM) System is Viragen's avian transgenic proprietary technology.

Viragen reported that its researchers in Scotland and its collaborators at Roslin Institute were able to significantly increase expression levels of interferon alpha-2a, a human protein often prescribed for the treatment of hepatitis C and certain malignant diseases, by at least 10-fold over previously reported results. The high quantities of active protein now being recovered from these transgenic hens' eggs builds a compelling case for using the OVA(TM) System as a primary manufacturing system. Additional protein drug candidates will be evaluated in confirmatory studies.

"This achievement may be the catalyst to establish the OVA(TM) System as the leading transgenic manufacturing system for difficult-to-manufacture proteins that can be enormously expensive to produce," stated Dr. Karen Jervis, Managing Director of Viragen (Scotland) Ltd. "We first reported the expression of interferon alpha in the OVA(TM) System back in January, but we have now further optimized the efficiency of the process by using a modified proprietary regulatory sequence, resulting in a 10-fold increase over previous expression levels. We have every reason to believe these results will translate to other high value therapeutic proteins that we aim to express using the OVA(TM) System."

A regulatory sequence is a region of DNA associated with a gene that influences the expression of that gene.

Roslin Institute's Dr. Helen Sang commented, "We are very encouraged to have made another significant step in advancing the development of the OVA(TM) System by increasing the yield per egg of interferon alpha ten fold. We expect to confirm that we can maintain, and even improve upon these results, for the production of interferon and other protein drugs."

Dr. Elizabeth Elliot, Senior Project Leader at Viragen Scotland, stressed the potential impact of the increased yields being obtained, "Our initial studies producing interferon alpha yielded an expression level of approximately 4 milligrams in each egg. But when we used the new modified regulatory sequence, we expressed up to 40 milligrams per egg. Based on these expression levels, each egg contains enough alpha interferon to treat up to 15 patients suffering from hepatitis C (HCV) for a full year, which our estimates indicate could be produced at a substantial discount to the cost compared to traditional recombinant systems. We are proceeding with additional studies, striving to report abundant expression levels for other proteins in order to validate such economical benefits."

About the OVA(TM) System:

Viragen has developed the technology underpinning the OVA(TM) System (Avian Transgenic Biomanufacturing) in collaboration with the Roslin Institute (Scotland) and now seeks to commercialize the considerable know-how and proprietary technologies which form the overall manufacturing process. The technology utilizes the chicken as a pharmaceutical bioreactor, one that can meet the growing need for protein-based human therapeutics. Based on the creation of lines of transgenic hens which have been engineered to produce a target protein in their eggs using the LentiVector(R) gene delivery system licensed from Oxford BioMedica plc, this technology is expected to provide an efficient and economical alternative to traditional recombinant bio- manufacturing techniques, having many apparent advantages in ease of scale-up, lower costs of production and quality of product produced.

This project has been funded in part from a grant awarded by the Scottish Executive's "SPUR Plus Program", designed to support significant technological advances being made in Scotland.

About Viragen, Inc.:

With international operations in the U.S., Scotland and Sweden, we are a bio-pharmaceutical company engaged in the research, development, manufacture and commercialization of therapeutic proteins for the treatment of cancers and viral diseases. Our product portfolio includes: Multiferon(R) (multi- subtype, human alpha interferon) which is uniquely positioned in valuable niche indications, such as high-risk malignant melanoma, and other select cancers and infectious diseases; VG102, a novel monoclonal antibody that binds selectively to an antigen that is significantly over-expressed on nearly all malignant tumors; and VG106, a novel cytokine targeting difficult-to-treat cancers. We are also pioneering the development of The OVA(TM) System with the renowned Roslin Institute, creators of "Dolly the Sheep", as a revolutionary manufacturing platform for the large-scale, efficient and economical production of human therapeutic proteins and antibodies, by expressing these products in the egg whites of transgenic hens.


SOURCE: Viragen, Inc.

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