Hollis-Eden Pharmaceuticals Cleared by FDA to Initiate Phase I Clinical Trial with HE3286 in Treating Metabolic Disorders.

Company Presents Additional Positive Data with HE3286 in Models of Type 2 Diabetes 

SAN DIEGO -- Hollis-Eden Pharmaceuticals, Inc. (NASDAQ:HEPH) today announced the Company has been cleared by the U.S. Food and Drug Administration (FDA) to initiate a Phase I clinical trial with HE3286 for the treatment of metabolic disorders. The Company expects to initiate clinical trials with HE3286 in the current quarter. The Company also announced additional confirmatory preclinical data indicating that HE3286 improves glucose disposal in models of type 2 diabetes and that the compound is acting through a novel pathway that may offer benefits over existing insulin sensitizers. These data were presented late last week at the 2nd International Congress on "Prediabetes" and the Metabolic Syndrome, Barcelona, Spain, April 25-28, 2007.

These findings support data previously reported at the Keystone Symposia meeting in January 2007. Data presented last week with HE3286 in models of glucose metabolism included the following:

* Confirmation of improved glucose tolerance in diabetic db/db mice - Treatment for 28 days with HE3286 markedly decreases the magnitude of blood glucose excursion profiles following an oral load of glucose (oral glucose tolerance test, or OGTT), showing that HE3286 improves glucose disposal.

* Pharmacological activity of HE3286 in an additional model of insulin resistance - In genetically obese, leptin-deficient mice (ob/ob), which are severely insulin resistant, treatment for 21 days with HE3286 significantly improves glucose tolerance as indicated by markedly reduced OGTT excursion profiles, again consistent with enhanced insulin sensitivity and increased glucose disposal.

* Confirmation of lack of interaction with the classical PPARgamma receptor pathway - Additional binding and transactivation experiments confirm initial findings reported previously, indicating that HE3286 does not bind or transactivate PPARgamma. In previous experiments designed to understand the possible mechanism of action of HE3286, it was found that HE3286 regulates the pro-inflammatory NF-kappaB pathway in cultured mouse macrophages or human monocytes. The Company believes this is an important finding because reports in the scientific literature over the last several years suggest that regulation of inflammatory pathways such as NF-kappaB can improve insulin sensitivity. There is growing evidence that insulin resistance results from chronic inflammation and that macrophages may be a key cell type responsible for the induction of insulin resistance leading to type 2 diabetes. Furthermore, by not acting on the classical PPARgamma pathway typically activated by insulin sensitizer agents currently in the market, HE3286 has been shown to avoid the unwanted side effect of weight gain associated with the use of those agents.

* Demonstrated benefit that HE3286 does not bind to sex steroid receptors - Nuclear receptor binding experiments confirm lack of detectable direct binding activity against the androgen and estrogen receptors, thereby reducing the risks of side effects associated with the binding of these receptors.

* Demonstrated benefit that HE3286 does not transactivate the glucocorticoid receptor- In transactivation experiments there was no evidence that HE3286 transactivates the glucocorticoid receptor pathway like a typical corticosteroid. These results suggest that the anti-inflammatory activity of HE3286 does not depend on activation of the glucocorticoid receptor pathway, which is associated with the immunosuppressive and bone loss side effects of traditional corticosteroid therapy.

There are approximately 20 million Americans with type 2 diabetes and over 160 million type 2 diabetics worldwide. Oral anti-diabetes drugs (OADs) are used exclusively in the treatment of type 2 diabetes. More than half of all individuals with type 2 diabetes are thought to use some form of OADs. Of the estimated $12 billion OAD marketed drugs sold in the world last year, approximately $6 billion in sales were attributed to the class of drugs identified as insulin sensitizers. The only currently approved anti-diabetic agents that act as insulin sensitizers are known as the glitazone class of drugs. Glitazones appear to act primarily through the activation of the nuclear hormone receptor, PPARgamma. While these agents can lower blood glucose, they have been associated with undesirable side effects such as weight gain.

In contrast, preclinical studies with HE3286 indicate that it does not act on the PPARgamma receptor and in preclinical models does not have the undesirable effect of weight gain seen with the glitazone class. Therefore, these studies suggest that HE3286 may represent the first of a new class of insulin sensitizing agents that may be used in controlling type 2 diabetes.

"We are excited to have been cleared by the FDA to initiate a clinical trial with HE3286," said Richard B. Hollis, Chairman and CEO of Hollis-Eden Pharmaceuticals. "Moreover, we are pleased to be reporting at this scientific conference further demonstration of the activity of HE3286 in preclinical models of glucose metabolism. Since reporting the initial mechanism of action data with HE3286 demonstrating the regulation of the inflammatory pathway of NF-kappaB, our strategy has been to target the compound for the treatment of metabolic disorders as well as autoimmune conditions such as rheumatoid arthritis. This Phase I safety trial program is designed to serve both indications with the hope of moving HE3286 into Phase II trials in diabetes and rheumatoid arthritis in early 2008."

Hollis-Eden Pharmaceuticals

Hollis-Eden Pharmaceuticals, Inc. is a world leader in the development of a proprietary class of adrenal steroid hormones as novel pharmaceuticals for human health. Through its Hormonal Signaling Technology Platform, Hollis-Eden is developing a new series of small molecule compounds that are metabolites or synthetic analogs of endogenous hormones derived by the adrenal glands from the body's most abundant circulating steroid. These steroid hormones, designed to restore the biological activity of cellular signaling pathways disrupted by disease and aging, have been demonstrated in humans to possess several properties with potential therapeutic benefit -- they regulate innate and adaptive immunity, reduce nonproductive inflammation and stimulate cell proliferation. The Company's clinical drug development candidates include HE3286, a next-generation compound being prepared for clinical trials in treating type 2 diabetes and potentially rheumatoid arthritis. A second next-generation candidate, HE3235, has been selected for clinical development in cancer. In addition to these clinical development candidates, Hollis-Eden has an active research program that is generating additional new clinical leads that are being further evaluated in preclinical models of a number of different diseases. For more information on Hollis-Eden, visit the Company's website at www.holliseden.com.

This press release contains forward-looking statements within the meaning of the federal securities laws concerning, among other things, the potential and prospects of the Company's drug discovery program and its drug candidates. Any statement included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause the Company's actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. Such statements are subject to certain risks and uncertainties inherent in the Company's business, including, but not limited to: the ability to complete preclinical and clinical trials successfully and within specified timelines, if at all; the ability to obtain regulatory approval for HE3286, HE3235 or any other investigational drug candidate; the Company's future capital needs; the Company's ability to obtain additional funding; the ability of the Company to protect its intellectual property rights and to not infringe the intellectual property rights of others; the development of competitive products by other companies; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update or revise the information contained in this press release as a result of new information, future events or circumstances arising after the date of this press release.