Cytran Raises $17 Million in Private Placement; Funds Will Support Completion of Phase III Trial of Anti-cancer Drug and Broadening Drug Pipeline.

Business Editors, Health/Medical Writers

KIRKLAND, Wash.--(BW HealthWire)--Nov. 10, 2000

Cytran, a privately held biotechnology company developing novel anti-cancer therapies, announced today the closing of a $17 million private placement of convertible debentures.

The round included lead investments by ALZA Corporation and Stephens Group, Inc. The funds will be used to support the Company's Phase II and III trials for its lead drug, IM862, as well as to advance preclinical development of other selected peptides in the Company's portfolio.

"Cytran is very pleased to receive this strong support from institutional and private investors in the U.S., Europe and Asia," said Dennis C. Fill, Cytran Chairman and CEO. "With this financing, the Company is well positioned to complete our pivotal Phase III Kaposi's sarcoma trial in IM862 as well as expand the ongoing Phase II cancer trial program, particularly in ovarian cancer."

To date, over 300 patients with various malignancies have received IM862 with no evidence of significant drug-related toxicity. IM862 is a small molecule comprised of two amino acids and enters the bloodstream through the nasal mucosa. In Cytran's clinical trials patients self-administer the drug as nose drops. Preclinical research suggests that IM862 has a broad spectrum of anti-cancer properties including immune system modulation and angiogenesis inhibition.

"We are pleased to support Cytran for the development of this new anti-cancer drug," said Samuel R. Saks, M.D., Group Vice President, ALZA Corporation. "The unique properties of IM862 combined with its ease of administration may provide clinicians with an additional tool in their fight against cancer."

"We are impressed by the progress of Cytran's clinical trial program and the experienced team of scientists and medical professionals who are leading it," said Jason Zhang, Ph.D., Research Analyst, Stephens Inc., an affiliate of Stephens Group, Inc. "If the current Phase III trial is successful, Cytran could launch its first cancer drug into the market within the next couple of years."

Cytran is currently conducting a pivotal Phase III trial in an AIDS-related malignancy, Kaposi's sarcoma, in over 30 medical centers in the United States, Canada, Europe and Australia. Results of a Phase II trial in IM862 in patients with AIDS-related Kaposi's sarcoma were presented at the 1999 Annual Meeting of the American Society of Clinical Oncology (ASCO) and published in the February 2000 issue of the Journal of Clinical Oncology. In that study, 37% of patients experienced either a complete or partial response and an additional 48% did not have their cancer progress. Treatment was well-tolerated with minimal side effects.

Cytran, Inc., headquartered near Seattle, is a privately held biopharmaceutical company, developing and commercializing drugs that fight cancer through stimulating immune system response and inhibiting angiogenesis. The Company has an agreement with ALZA Corporation granting marketing rights to IM862 in the United States and Canada. Since its inception in 1991, the Company has raised approximately $50 million in private financing. For further information on Cytran and its clinical trials, visit www.cytran.com.

In addition to historical information, this press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those currently anticipated by Cytran.