Diatide Wins Patent Interference.

LONDONDERRY, N.H.--(BW HealthWire)--June 10, 1999--

Diatide Inc. (Nasdaq:DITI) announced today that the United States Patent and Trademark Office (PTO) has entered judgment in Diatide's favor in Interference No.104,264 between Diatide's Application No. 08/236,402 and U.S. Pat. No. 5,670,133, owned by Palatin Technologies Inc. The judgment acknowledges Diatide's ownership of the disputed invention, a peptide containing a specific chelator for linking the peptide to technetium-99m. The interference was declared on November 30, 1998, and judgment was entered on June 2, 1999, after Palatin failed to provide any evidence that its inventor had made the invention earlier than the priority date of Diatide's application.

"We are pleased that the PTO has recognized Diatide's right to this invention, which forms part of our AcuTect(TM) patent estate," said Richard T. Dean, Ph.D., President and CEO of Diatide and a co-inventor of the application. "We are continuing to use the interference process to confirm Diatide's rights to other related inventions."

Diatide recently requested the PTO declare two additional interferences between pending Diatide applications and issued Palatin patents. Based on the priority dates of the Diatide applications, Diatide expects to be named "senior party" in both new interferences.

Part of the interference process involves each party filing "preliminary statements," which consist of statements identifying the date of earliest conception of the invention, the date that the invention was first actually completed ("reduction to practice"), and the date after conception when the inventor began actively working to complete the invention. The preliminary statements also contain copies of lab notebook pages and other evidence to support the dates identified. Preliminary statements are placed in a sealed envelope before filing, and kept at the Board of Patent Appeals and Interferences until the Administrative Patent Judge in charge of the case orders that they be opened. In Interference No.104,264, the judge ordered the Preliminary Statements to be opened on March 31, 1999.

Because of its priority claim to the filing date of U.S. Pat. No. 5,443,815, which is November 27,1991, Diatide was named the "senior party" in Interference No.104,264, which placed the burden of proving earlier conception and reduction to practice on Palatin as "junior party". Palatin's Preliminary Statement did not contain any evidence of conception or reduction to practice earlier than November 27, 1991. On May 6, 1999, the Administrative Patent Judge issued an order that Palatin "show cause" why judgment should not be entered in Diatide's favor, by May 26, 1999. On June 2, 1999, the Board of Patent Appeals and Interferences held that Palatin did not show good cause, ordering that judgment be entered against Palatin. The Board also ordered that Palatin is not entitled to the claims of U.S. Pat. No. 5,670,133, and that Diatide is entitled to a patent on the disputed claims.

Diatide owns 42 issued U.S. patents and 48 granted foreign patents, and has licensed rights to seven additional U.S. patents and their foreign counterparts.

Diatide, based in New Hampshire, is a specialty pharmaceutical company developing a novel line of disease-specific imaging and therapeutic agents - Techtides(R) and Theratides(TM) - as pharmaceuticals with commercial and medical promise. The Company has applied its patented technologies in the areas of peptide engineering and radiolabeling chemistry to produce a number of small molecules that bind with high affinity and specificity to targets on diseased tissue and to which a radioisotope can be attached for imaging or therapeutic purposes.

Diatide's first product, AcuTect(TM) for the imaging of acute deep vein thrombosis (blood clots) in the lower extremities, received marketing approval -- after a priority review -- from the FDA in September 1998 and was launched in October 1998. NeoTect(TM) for the imaging of lung cancer is undergoing a priority review with the FDA and on December 16, 1998, its New Drug Application (NDA) was recognized as approvable. NeoTect(TM), labeled with the imaging isotope technetium-99m, is the prototype for Diatide's "Find, Fight, and Follow" strategy in oncology. As part of this strategy, the Company has in preclinical development a drug for treating lung and breast cancer. This compound consists of a targeting peptide labeled with the therapeutic beta-emitting radioisotope, rhenium-188. Diatide is co-marketing its lead imaging agents with Nycomed Amersham plc. The Company's therapeutic products are not the subject of any partnering agreements.

More information on Diatide can be obtained from its web site, http://www.diatide.com.

This press release contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the caption "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" ("Risk Factors") in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 which is on file with the Securities and Exchange Commission. These Certain Factors are incorporated herein by reference. As more fully described in the Certain Factors, the Company's potential products (other than AcuTect(TM)) are all still in development; there can be no assurance that the Company's potential products will demonstrate the safety, efficacy, and cost attributes currently expected by the Company; there can be no assurance that the claims allowed under the Company's issued patents will be broad enough to protect the Company's technology, that any patents issued to the Company will be sustained if challenged in court proceedings, or otherwise, or, that third parties will not develop products or processes that do not infringe any valid patents held by the Company; there can be no assurance as to when the FDA will complete its review of the NDA for NeoTect(TM) (P829); there can be no assurance that the Company will receive regulatory approvals to commence or continue clinical trials of product candidates, or to market any products, including NeoTect(TM); and, there can be no assurance that AcuTect(TM), NeoTect(TM), or the Company's other potential products will be commercially successful, or accepted by the medical community or third-party payors, or that technologies, patents and proposed products of other companies will not render the Company's products obsolete or noncompetitive.