Hollis-Eden Pharmaceuticals Presents Data Demonstrating Potential Therapeutic Benefits of Second-Generation Drug Candidates.

SAN DIEGO -- Hollis-Eden Pharmaceuticals, Inc. (NASDAQ:HEPH) announced today that it is presenting preclinical data at the 12th International Congress on Hormonal Steroids, Hormones & Cancer being held September 13-16, 2006, in Athens, Greece, demonstrating indication-specific activity and potential therapeutic benefits of multiple second-generation compounds derived from the Company's Hormonal Signaling Technology Platform.

As reported at the meeting, the compounds described include potential drug candidates that are effective and non-toxic in animal models of multiple sclerosis, rheumatoid arthritis, diabetes, prostate cancer and chemotherapy recovery. In addition, the Company reported that it has made significant progress in defining the mechanisms of action of its Hormonal Signaling Technology Platform. Specifically, several second-generation Hollis-Eden compounds regulate NF-kappaB, a protein that plays a key role in cellular signaling. NF-kappaB activation leads to the production of inflammatory mediators such as TNF-alpha, IL-6, and IFN-gamma, and controls various other cellular functions. Thus, NF-kappaB is an important pharmaceutical target for treatment of inflammatory and metabolic disorders.

Hollis-Eden's Hormonal Signaling Technology Platform comprises a proprietary new class of small molecule compounds that are designed to restore the biological activity of cellular signaling pathways disrupted by disease and aging. Through years of research with these compounds -- metabolic conversions or synthetic analogs of adrenal steroid hormones -- Hollis-Eden has made significant discoveries relating to their metabolism, mechanism of action and pharmacologic profile.

First-generation drug candidates from this class of compounds have been demonstrated in humans to have three core therapeutic properties: they regulate innate and adaptive immunity, reduce unproductive inflammation, and stimulate the proliferation of progenitor cells in the bone marrow that may play a role in regenerative medicine. Second-generation compounds are designed to have improved pharmaceutical acceptability while retaining the potent anti-inflammatory and specific immune regulatory properties observed with first-generation compounds. Hollis-Eden is leveraging its Hormonal Signaling Technology Platform through multiple development programs now yielding second-generation development candidates that may be developed by the Company independently or through collaborations with other pharmaceutical companies.

Autoimmunity and Inflammatory Conditions

In its autoimmune program, Hollis-Eden reported that it has developed orally available compounds -- HE3204 and HE3286 -- that demonstrate anti-inflammatory activity without immunosuppression.

--In vitro, HE3204 and HE3286 inhibited NF-kappaB signal transduction pathways at concentrations lower than that of the widely used corticosteroid dexamethasone.

--In a LPS-stimulated mouse model of inflammation, HE3204 decreased activated NF-kappaB in the spleen and TNF-alpha in the blood.

--In a preclinical model of multiple sclerosis, a cell-mediated (Th1) autoimmune disorder, orally administered HE3204 decreased disease and decreased the production of antigen-specific responses of TNF-alpha, IL-6 and the Th1 cytokine IFN-gamma.

--In a preclinical model of rheumatoid arthritis, an antibody-mediated (Th2) autoimmune disorder, orally administered HE3286 decreased joint swelling scores and increased the production of antigen-specific IFN-gamma and TNF-alpha responses in the spleen, indicative of a shift away from Th2 responses and toward cell-mediated (Th1) immunity.

--Both compounds have shown good oral bioavailability in primates.

--Neither compound is immunosuppressive in a number of in vitro and in vivo immune-stimulation assays.

Metabolic Disorders

Hollis-Eden reported that one of its second-generation compounds, HE3286, demonstrated benefit when administered orally in animal models of diabetes.

--In a model of early, insulin resistant type-II diabetes, HE3286 improved glucose tolerance.

--In another model of diabetes, HE3286 decreased glucose and triglycerides.

--The metabolic effects observed are believed to be driven by the ability of HE3286 to regulate the NF-kappaB pathway as well as the metabolic disease-related enzymatic 11betaHSD1 pathway.

Hematology

Hollis-Eden also presented data on HE3210, a potential candidate for chemotherapy protection.

--In rhesus monkeys exposed to sublethal radiation, subcutaneously administered HE3210 produced tri-lineage hematopoiesis, reducing neutropenia, thrombocytopenia and anemia.

--In a rhesus monkey model of chemotherapy protection, HE3210 enhanced regeneration of neutrophils, platelets and red blood cells in animals receiving carboplatin.

Oncology

Data to be detailed in a separate presentation at the same conference later in the week also demonstrate that additional Hollis-Eden compounds, such as HE3235, can inhibit adrenal steroid-induced generation and proliferation of tumors in preclinical models of hormone refractory prostate cancer (HRPC).

Pulmonary Disorders

As reported recently at the 29th European Cystic Fibrosis Conference, Hollis-Eden has generated data demonstrating the anti-inflammatory activity of first- and second-generation compounds when given orally in mouse models of lung inflammation and septic shock, as judged by reduced levels of pro-inflammatory cytokines such as TNF-alpha and IL-6 in lung and blood.

"This class of hormonal signaling molecules has gone largely unrecognized relative to its biological properties and functions," stated James M. Frincke, Ph.D., Chief Scientific Officer of Hollis-Eden. "Our earlier discovery of the compounds' core properties gave rise to multiple drug development programs at Hollis-Eden. Given the results of our ongoing research, as announced today, we are increasingly confident that our efforts to deliver on the promise of these compounds as fundamental regulators of biological processes may lead to a renaissance in the therapeutic use of adrenal steroids."

"This conference provides a unique opportunity to update the scientific community specializing in the field of hormonal steroids on all of Hollis-Eden's pharmaceutical programs, since our research and development projects center around our Hormonal Signaling Technology Platform," stated Richard B. Hollis, Chairman and Chief Executive Officer. "The data we presented help validate our core scientific hypothesis that this class of compounds plays a key role in restoring or inhibiting signals that regulate host response to disease. Following years of scientific exploration with these compounds, we are now identifying second-generation compounds and their signaling pathways, and our intent is to move them forward as biochemical signaling compounds with therapeutic benefit in a wide variety of diseases and disorders where immune dysregulation and unproductive inflammation are underlying conditions. We believe these second-generation compounds have a better understood mechanism of action and have the potential for more convenient routes of delivery such as oral administration. In the process, we are closer to our goal of creating a whole new class of pharmaceuticals that add to the quality of life."

About Hollis-Eden

Hollis-Eden Pharmaceuticals, Inc. is developing a proprietary new class of small molecule compounds that are metabolites or synthetic analogs of adrenal steroid hormones. These compounds, 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 lead product candidate, NEUMUNE(TM) (HE2100), is entering late-stage development for the treatment of Acute Radiation Syndrome (ARS), a life-threatening condition resulting from exposure to high levels of radiation following a nuclear or radiological incident, and is being explored for use in combating healthcare-associated infections. Hollis-Eden also is profiling optimized second-generation compounds for potential clinical development in a broad spectrum of therapeutic categories including hematology, metabolic disorders, autoimmune disorders, pulmonary diseases, oncology and infectious diseases. For more information on Hollis-Eden, visit the Company's website at www.holliseden.com.

This press release contains forward-looking statements concerning the potential and prospects of the Company's drug discovery program and its drug candidates. Any statement describing a goal, expectation, intention or belief of the Company is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties, including the ability to complete preclinical and clinical trials successfully and within specified timelines, if at all; the ability to obtain regulatory approval for NEUMUNE under the U.S. Food and Drug Administration Animal Efficacy Rule, even if shown to be effective in preclinical studies; the ability to receive any stockpiling orders for NEUMUNE from the U.S. federal, state and foreign governments, even if approved by regulatory authorities; 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. The actual results may differ materially from those contained in this press release.