Tuesday, January 23, 2007

Viragen Reports OVA™ System Milestone: Interferon Alpha Expressed in Eggs

PLANTATION, FLORIDA – January 23, 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 new achievement with the successful expression of human interferon alpha-2a in the whites of eggs laid by transgenic hens using the OVA™ System (Avian Transgenic Biomanufacturing). This is the third therapeutic protein expressed thus far in a series of “proof-of-principle” studies, which aim to develop the OVA™ System as a novel, large-scale biomanufacturing alternative capable of cost-effectively expressing many types of therapeutic proteins. Viragen holds the worldwide exclusive license to commercialize Avian Transgenic Technology as granted by Roslin Institute.

Alpha interferon is a protein produced by the human immune system that is fundamental to the body’s resistance to disease. This OVA™-expression study produced interferon alpha-2a, which is the active ingredient in Roferon®-A* (Hoffman-LaRoche Inc.), a drug approved for the treatment of certain chronic infectious diseases and cancers. Importantly, the team has previously demonstrated that the OVA™ System can repeatedly target expression to the oviduct and incorporation in the egg, rather than being expressed throughout the bird, plus the characteristic of protein drug expression is able to be passed to subsequent generations. This combination of features is essential for a viable and cost-competitive manufacturing system.

Viragen has previously reported successful OVA™-expression of a humanized monoclonal antibody it is developing for advanced malignant melanoma and interferon beta-1a, which is currently marketed under two competing brand names for the treatment of Multiple Sclerosis (MS), as Avonex®** (Biogen Idec) and Rebif®*** (Serono).

The Project’s Scientific Leader, Dr. Helen Sang of Scotland’s Roslin Institute, commented, “With each new functional protein that we recover from transgenic hens’ eggs, synthesized as a component of the egg white, we significantly advance our collective knowledge and experience. We have now demonstrated synthesis of three different proteins at a consistent level and will move on to characterize OVA™-expressed interferon alpha to further refine and optimize the technology.”

According to Vice President and Managing Director of Viragen (Scotland) Ltd., Dr. Karen Jervis, the OVA™ System production method differs dramatically from standard interferon manufacturing methods. “Typically, single-subtype, recombinant alpha interferon is manufactured in bacterial or mammalian cells in bioreactors housed in complex and costly facilities. With the OVA™ System, we expect to offer large-scale manufacturing capabilities in a setting far less capital-intensive and with high levels of efficiency and quality. Most importantly, OVA™-expressed proteins will need to adhere to extremely stringent quality standards, and we are proceeding with comprehensive internal and external studies to fully characterize the proteins we express through biochemical and functional testing. These data, if positive, will be pivotal in preparing both a compelling economical model and a safety/quality case for the regulatory authorities.”

“I congratulate the Viragen, Roslin and Oxford BioMedica teams that all played key roles in adding another therapeutic candidate to our portfolio of OVA™-expressed proteins,” stated Viragen’s President and CEO, Charles A. Rice. “This alliance continues to pioneer advancements in the field of transgenic hen protein production, and as we gather additional supporting evidence, we will pursue strategies designed to expedite a regulatory pathway for one candidate, which we expect to ultimately lead to key commercial licenses.”

Viragen has no agreements with Hoffman-LaRoche, Biogen Idec or Serono and did not collaborate with these companies in connection in these avian expression studies.

* Roferon®-A (interferon alpha-2a) is a registered trademark of Hoffman-LaRoche Inc.
** Avonex® (interferon beta-1a) is a registered trademark of Biogen Idec, Inc.
*** Rebif® (interferon beta-1a) is a registered trademark of Serono, Inc.

About the OVA™ System:

Viragen holds the worldwide exclusive license to commercialize the OVA™ System (Avian Transgenic Biomanufacturing) as granted by the Roslin Institute (Scotland). The project is designed to develop the chicken into 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® gene delivery system licensed from Oxford BioMedica plc, this technology is being developed as an efficient and economical alternative to standard 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 and product candidate portfolio includes: Multiferon® (multi-subtype, human alpha interferon) which is uniquely positioned in valuable niche indications, such as high-risk malignant melanoma, other niche cancer indications and selected infectious diseases; VG101, a humanized monoclonal antibody that binds selectively to an antigen over-expressed on Stage IV malignant melanoma tumors; and VG102, a highly novel humanized monoclonal antibody that binds selectively to an antigen that is over-expressed on nearly all solid tumors. We are also pioneering the development of the OVA™ System (Avian Transgenics), with the renowned Roslin Institute, the 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.

Viragen, Inc. Corporate Contact:
Douglas Calder, Director of Communications
Phone: (954) 233-8746; Fax: (954) 233-1414
E-mail: dcalder@viragen.com

The foregoing press announcement contains forward-looking statements that can be identified by such terminology such as “believes,” “expects,” “potential,” “plans,” “suggests,” “may,” “should,” “could,” “intends,” 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. In particular, management’s expectations regarding future research, development and/or commercial results could be affected by, among other things, uncertainties relating to clinical trials and product development; availability of future financing; unexpected regulatory delays or government regulation generally; the success of third-party marketing efforts; our ability to retain third-party distributors; our ability to obtain or maintain patent and other proprietary intellectual property protection; and competition in general. Forward-looking statements speak only as to the date they are made. The Company does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.