Clearant, Inc. Completes $18 Million in Series B Financing; Growing Demand for the Clearant Process Elevating the Quality and Safety of Tissue Implants.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Aug. 13, 2003

Clearant, Inc., a leading developer and marketer of an innovative pathogen inactivation technology with a broadly diversified set of market applications, today announced completion of an $18 million Series B Financing Round with a significant portion raised from new institutional investors. This new round of financing closes as Clearant continues to secure contracts for the licensing of its patented Clearant Process(R), the only method available that can sterilize tissue allograft implants in their final packaging, and the only technology available that can significantly inactivate all classes of pathogens in plasma- and recombinant-derived therapeutic proteins and blood products.

"This financing round complements the revenue stream we have begun to generate through our aggressive pursuit of relationships with our first target customer - tissue processors - and will further accelerate the growth of our company," said Terren S. Peizer, Chairman and Chief Executive Officer, Clearant, Inc. "Closing this round within these tough economic times reinforces the confidence the investment community has in our broadly diversified market applications, low capital intensive business model and the significant market potential for the Clearant Process."

To date, Clearant has focused the majority of its sales and marketing efforts on generating rapid adoption of the Clearant Process within the tissue allograft industry. More than 800,000 tissue allograft implants are distributed annually in the United States. Recently, experts at the Centers for Disease Control (CDC) have documented a series of serious infectious transmissions through transplanted tissue, highlighting the urgent need for more effective pathogen inactivation technologies. Yet, until now, there has been no method available that could validate the sterilization of these allograft implants in their final packaging without damaging the integrity of the tissue. Recognizing that the Clearant Process is the first technology to allow for validated sterilization of tissue implants in their final packaging, three tissue processors have already licensed the proprietary process and the first patients have successfully received sterile Clearant Process treated allograft implants.

"For many years, I, like most surgeons, believed that risk of infection with tissue implants was unavoidable, but when I saw the Clearant Process data I knew the time had come to demand higher standards for my patients," said Warren King, MD, a prominent orthopedic surgeon with the Palo Alto Medical Foundation, Stanford University, and a medical consultant for the Oakland Raiders NFL team and the San Jose Sharks NHL team. "I was pleased to be the first in the country to be able to offer my patients sterile Clearant Process treated allografts and the success of these initial surgeries will most certainly accelerate the demand for widespread use of allografts that have been sterilized using the Clearant Process."

The increasing number of tissue processors who have either finalized or are negotiating licensing agreements with Clearant suggests that tissue processors are eager to offer, for the first time, truly sterile tissue allograft implants in their final packaging using Clearant's validated pathogen inactivation technology. Clearant anticipates this will lead to expanding availability over the next quarter of tissue implants that have been treated by the Clearant Process.

About Clearant, Inc.

Clearant, Inc., a biotechnology company headquartered in Los Angeles, California, is a leader in pathogen inactivation for biological products. Clearant, Inc. has developed the patent protected CLEARANT PROCESS(R), designed to substantially reduce all types of pathogens in biological products while maintaining a high degree of the underlying protein. Various sterilization methods on the market today kill only specific types of pathogens, such as bacteria or lipid-enveloped viruses, for specific products. The CLEARANT PROCESS(R) can substantially reduce all types of pathogens for products across many market segments including plasma proteins, tissue implants, recombinant products and blood products, and can be applied at various stages of product processing/manufacturing, including in the final container.

The company's revenue includes fees from licensing its patented technology and research and development fees generated on projects for commercial customers and government grants. The CLEARANT PROCESS(R) is marketed through a direct sales force primarily in the United States and in Europe.

For more information about Clearant, Inc., the CLEARANT PROCESS(R), sterilization and pathogen inactivation please see www.clearant.com.