Cortecs patents HALO(TM) drug delivery system in USA and Europe.

LONDON--(BUSINESS WIRE)--June 1, 1995--Cortecs International (NASDAQ:DLVRY/LSE:SEAQ/ASX:CRI), the U.K.-based oral drug delivery company, today announced that it has been granted a patent for the HALO(TM) liver by-pass oral drug delivery system in the United States and Europe, which runs for 17 years.

Patents have also ben granted this year for HALO(TM) in South Africa and are pending on other jurisdictions.

The HALO(TM) (Hepatic Avoidance using Lymphatic Output) oral drug delivery system is designed to enhance absorption of poorly bioavailable oral drugs, focusing on those drugs subject to first-pass metabolism in the liver which results in reduced reliability, occasionally increased side effects and reduced effectiveness in treating disease. In addition to providing significant patient benefits, HALO(TM), in formulation with such drugs, offers the possibility of extending the patent life of many drugs until 2012 (see Notes to Editors).

Recent studies in human volunteers have demonstrated a three-fold increase in the oral bioavailability of the cardiovascular drug propranolol using the HALO(TM) oral drug delivery system.

Cortecs is a British-based company quoted on the London Stock Exchange, the Australian Stock Exchange and on NASDAQ. The company specializes in the development of new pharmaceutical delivery systems for the healthcare industry. Other major areas include:

o Macromol - a system for the oral delivery of biotechnology drugs, such as Calcitonin, which is presently in Phase II clinical trials.

o Oral Therapeutic Antigens - oral delivery of therapeutic antigens against diseases such as influenza and pseudomonas infection (in cystic fibrosis) which is currently in Phase I/II trials.

o ADEPT - an oral system to prevent and treat diarrhea without antibiotics.

o Point of Care Diagnostics - a range of diagnostic kits including HELISAL for the detection of Helocobacter pylori and an innovative bone breakdown diagnostic in development of Osteoporosis.

o Cortecs Healthcare - markets a range of ethical and OTC medicines and diagnostic products.

Notes to Editors

HALO(TM) - An Important Advance or Oral Therapeutic Delivery

The HALO(TM) (Hepatic Advoidance using Lymphatic Output) oral drug delivery system is designed to improve the oral bioavailability of drugs which suffer extensive metabolism by the liver and/or poor absorption from the gastrointestinal tract.

HALO(TM) Improves Delivery of Wide Range of Therapeutic Drugs

The HALO(TM) oral drug delivery system is likely to be suitable for the improved delivery of wide range of poorly bioavailable drugs, particularly in the cardiovascular, bronchopulmonary (including Asthma) and psychiatric therapeutic areas.

The threat to new R&D: Generic Drugs Cost Pharmaceutical Companies U.S. $1 Billion Over Two Years on Ten Branded Drugs Alone

Typically, it is estimated that it costs at least U.S. $250 million to develop and register a new drug product. Also, a typical development-to-licensing time for a new therapeutic drug is 12 years leaving only five more years for the drug to be exploited commercially before it is open to competition from copycat to so called "generic" drugs. Therefore, the effect on profitability and cash flow can be catastrophic for pharmaceutical companies who need to constantly use these profits to research and develop new therapies to fight disease. According to the authoritative U.S. publication The Index of Medical Sales (IMS International), the negative impact on 10 U.S. Branded pharmaceutical products over two years (1993-94) following the introduction of competing generic drugs was a drop in sales of over U.S. $1.05 billion. Additionally, the well know ulcer suppressant drug Tagamet saw sales in 1994 drop by U.S. $196 million against the generic competitor Cimetidine's rise in sales of U.S. $144.1 million.

HALO(TM) Can Extend a Branded Drug's Patent Life Significantly and Improve Its Competitiveness in Today's Cost Conscious Environment

The HALO(TM) oral drug delivery system, when formulated with therapeutic drugs, will have the effect of extending that drug's patent life. In its HALO(TM) oral drug delivery formulation, a drug's new efficiency and the improved patient benefits it could bring has the potential to provide it with a commercial and medical edge over competing generic drugs not formulated with the system. By doing so, HALO(TM) offers those companies, who have successfully committed significant resources to R&D, a chance to recoup costs over a longer period and thereby enable further research into new products. Additionally, reducing the dose required and thereby often the side-effects the system also offers the prospect of healthcare costsavings by reducing hospital admissions through therapeutic failure or adverse drug reactions in patients. Cost savings are increasingly being demanded by those in charge of health care programs whether public or private, in the U.S., Europe and Japan. Pressures on health care budgets are forcing managers to look for cheaper options; copycat generic drugs, with little or no R&D costs to carry, are therefore attractive.

Companies Engaged in R&D are at Risk From Copycat Drugs After Patents Expire

In one recent case, a company who had enjoyed a large commercial success with a therapeutic drug it had researched and developed but who had failed to extend the patent, saw its profits and share price dramatically fall over a single year because of generic competition which ultimately resulted in that company being sold.

DTI and Welsh Office Support HALO(TM) Research

Several publications concerning the HALO(TM) oral drug delivery system have recently appeared in respected scientific journals including the Lancet ("Drug Delivery: Lymphing Along"; G. Tucker, Vol. 341, May 22, 1993, pp. 1314-1315). Development of the HALO(TM) oral drug delivery system at Cortecs' Deeside research and manufacturing establishment funded in part by a SPUR (Supporting Products Under Research) grant from the United Kingdom Department of Trade and Industry through the Welsh Office.

CONTACT: Cortecs International, London

Jonathan Pockson, 011-44-181-568-7071

or

Brandon Harris & Company Ltd, London

Dr. Geoffrey Brandon, 011-44-407-6854

or

Kehoe, White Savage & Co. Inc., New York

Van Negris, 212/888-1616

or

Buchanan Communications, London

Zena Bates/Lisa Baderoon, 011-44-171-489-1441