Arbitration Dispute Filed by SpectRx Against Altea Resolved in Altea's Favor.

Health & Medical Writers

ATLANTA--(BW HealthWire)--Nov. 8, 2000

Altea Wednesday announced that the Arbitration with SpectRx has been resolved fully in Altea's favor.

The unanimous ruling by the arbitration panel found the allegations made by SpectRx against Altea to be without merit and denied all of their claims, and the panel upheld the validity and enforceability of the original agreement.

SpectRx had filed the arbitration in relation to the License and Joint Development Agreement under which Altea licensed to SpectRx the technology that is the basis for SpectRx's non-invasive glucose monitoring program with Abbott Laboratories.

SpectRx wanted to eliminate its royalty, joint technology, and other obligations under the License and Joint Development Agreement by having the agreement declared invalid. The counter claims made by Altea regarding the validity of the agreement and the contractual definition of the licensed technology all were found to be valid.

Specifically, the ruling decrees that the License and Joint Development Agreement is valid and enforceable as written, and that the broad definition of Technology, as asserted by Altea, is correct. The panel ruled in Altea's favor as to the proper ownership of certain patent applications under the terms of the agreement, which applications SpectRx had attempted to claim as its sole property.

Each party is responsible for paying its own legal fees involved in the arbitration.

The arbitration panel has also found all claims made by SpectRx against Jonathan Eppstein to be without merit and denied those claims. Eppstein, a co-founder, president, and chief operating officer of Altea, was also a co-founder of SpectRx and held the positions of vice president of research and vice president of transdermal systems within SpectRx prior to his departure in 1998.

In addition to denying all claims against Eppstein, the panel also ruled in Eppstein's favor on his claim that SpectRx's refusal to honor his timely exercise of certain stock options in 1998 was wrongful.

"We are extremely pleased with this decision," stated Deborah Eppstein, Ph.D., chairman and chief executive officer of Altea. "Altea has a very clear view of the extent and value of our technology and intellectual property and will defend vigorously any attack on the proprietary core of our business and on our founders.

"We had tried in good faith to resolve these issues related to our IP with SpectRx for many months before SpectRx filed this extremely broad demand for arbitration. In light of SpectRx's press release of Nov. 7, which did not accurately represent the arbitration decision, we felt obligated to set the record straight.

"With a decision now in hand that denies SpectRx's claims and supports Altea's position, we are looking forward to continuing to share in our rightful profits from the non-invasive monitoring products licensed to SpectRx, of which the product for continuous glucose monitoring under sublicense to Abbott is most advanced.

"Once this glucose-monitoring product is commercialized, we will realize a royalty on its net sales by Abbott."

"Licensing our technology for monitoring products early on has allowed Altea to focus our resources on developing our own pharmaceutical products for non-invasive and on-demand drug delivery, of which our MicroPor(TM) insulin product is most advanced," added Dr. Eppstein.

"We also are very excited about our TransVac(TM) program for non-invasive vaccination with both protein and DNA vaccines; we recently demonstrated immunological efficacy of hepatitis B vaccine in human subjects. We believe our system offers significant advantages for vaccine delivery to the crucial immune-presenting cells in the skin, enabling a robust immune response with a lower dose of antigen.

"Our MicroPor(TM) system is a patented, non-invasive, user-friendly skin patch," concluded Dr. Eppstein.

Altea is a member of the privately held family of companies developing the MicroPor(TM) technology for drug delivery applications, including delivery of vaccines and gene therapy products by Altea Genomics; and delivery of peptides and proteins, as well as small molecules requiring rapid and on-demand delivery, such as pain medications, by Altea Development Corp.

Altea Genomics is working with Elan Corp. on developing selected products, including several undisclosed DNA vaccines. Altea Development Corp. is evaluating an undisclosed recombinant protein with Novartis.

The non-invasive monitoring applications of the MicroPor(TM) technology are licensed to SpectRx Inc. (Nasdaq: SPRX), who is developing the glucose monitoring products with Abbott Laboratories (NYSE: ABT). For more information, please visit our web site at www.alteatech.com.

Note Regarding Projections and Forward-Looking Statements

Statements in this release that are not purely historical are forward-looking statements within the meaning of the Private Securities Reform Act of 1995, including Altea's beliefs, expectations, hopes, or intentions regarding the future. All forward-looking statements are made as of the date hereof and are based on information available to Altea as of such date.