Inflazyme Enters into Agreement to Acquire GlycoDesign; Expanding its Franchise in Inflammation and Strengthening its Product Pipeline.

Health/Medical Writers

VANCOUVER, British Columbia & TORONTO--(BUSINESS WIRE)--April 9, 2003

Inflazyme Pharmaceuticals Ltd. (TSX: IZP) and GlycoDesign Inc. (TSX: GD) today announced that they have entered into a definitive agreement whereby Inflazyme has agreed to acquire GlycoDesign. Inflazyme will issue 22 million shares to acquire all outstanding GlycoDesign shares in a deal valued at approximately $12.8 million (see below). The acquisition will expand Inflazyme's franchise in inflammation and strengthen its product pipeline. The acquisition is subject to approval by GlycoDesign shareholders and regulatory authorities.

Ian McBeath, President & CEO of Inflazyme Pharmaceuticals said today: "The acquisition of GlycoDesign will add further anti-inflammatory technology and expand our pipeline and potential partnering opportunities whilst adding to our cash reserves and capital base. This acquisition is part of our strategy to grow Inflazyme into a leading biopharmaceutical company and to build a franchise in the treatment of inflammation."

Michael Thomas, President & CEO of GlycoDesign today said: "GlycoDesign shareholders will benefit through the receipt of shares in a new, more broadly based Company with a larger product pipeline and greater resources, capable of delivering increased value to all shareholders. The new combined Company will build on its existing drug development capabilities and will be better positioned to advance the scientific programs, particularly in the field of inflammation. Importantly for the GlycoDesign shareholder is the realization of unrecognized value in their underlying investment."

Rationale for the Acquisition

- The acquisition will provide Inflazyme an opportunity to expand its position as a leader in the development of new LSAID (Leukocyte Selective Anti-Inflammatory Drugs) anti-inflammatory therapies by the addition of GlycoDesign's novel CORE2 inhibitors. CORE2 inhibitors are a different type of LSAID and work through inhibition of an enzyme involved in the trafficking of leukocytes to areas of inflammation. Inflazyme currently has three other distinct series of LSAIDs from its own research. The CORE2 inhibitors will be additive to and expand Inflazyme's LSAID programs.

- Inflazyme's product pipeline will be further expanded by the addition of GlycoDesign's GH9001, a novel anti-thrombotic (anti-blood clotting) therapy, being developed in collaboration with Leo Pharma of Denmark, and currently in Phase I clinical trials. GlycoDesign has further novel anti-thrombotic technology in ATH, a pharmacological coating for blood-contact materials, currently completing pre-clinical studies.

- The acquisition may provide Inflazyme with increased partnering opportunities through a combination of both companies' technologies.

- Inflazyme's financial position will be strengthened giving Inflazyme the flexibility to extend its cash through to the end of 2005.

- The Inflazyme Board and management team will continue to manage the combined business. Ian McBeath and Dr Walter Lovenberg will continue as CEO and, Chairman of the Board respectively. One representative selected by the GlycoDesign Board will be invited to join the Board of Inflazyme.

- Inflazyme's expertise in clinical development and inflammation research is expected to be strengthened by the addition of key personnel from GlycoDesign. Operations will be consolidated into Inflazyme's Vancouver facility.

Details of the Acquisition:

Inflazyme will issue 22 million common shares, on a share exchange basis, for all of the issued and outstanding shares of GlycoDesign. GlycoDesign shareholders will receive 1.8424 Inflazyme common shares for every GlycoDesign share they own. Following the completion of the acquisition, which is expected to occur in June 2003, GlycoDesign shareholders will hold approximately 27.6 % of Inflazyme.

Based on the 10-day average closing price for Inflazyme's shares of $0.58 on the Toronto Stock Exchange for the 10-day period ended on the business day prior to this announcement, the deal is valued at $12.8 million. This values each GlycoDesign share at $1.07, which represents a premium of 174% over the 10-day average closing price of GlycoDesign's shares of $0.39 for the same period.

As at January 31st, 2003, GlycoDesign had working capital of approximately $17.7 million, which included cash and short-term investments of $18.8 million. As at December 31st, 2002 Inflazyme had working capital of approximately $20.4 million, which included approximately $22 million in cash and short-term investments.

The proposed acquisition has the unanimous support of the directors of both GlycoDesign and Inflazyme. Holders of approximately 34.5% of GlycoDesign's common shares have committed their support and agreed to vote their shares in favour of the acquisition. The Board of Directors of GlycoDesign has received a Fairness Opinion from National Bank Financial, Toronto, stating that the exchange ratio is fair from a financial point of view to the GlycoDesign shareholders. SG Cowen Securities Corporation is acting as advisors to Inflazyme.

A Special Meeting of GlycoDesign Shareholders will be held in Toronto on or about May 28th 2003 for the purpose of considering the transaction. Further information about the acquisition will be in the materials to be mailed to GlycoDesign shareholders.

Details of GlycoDesign:

GlycoDesign is a Toronto based drug discovery and development company developing products in the area of glycobiology to treat diseases such as thrombosis, inflammation and cancer. Its lead product, GH9001, being developed in collaboration with Leo Pharma of Denmark, is currently completing Phase I human clinical trials as a new anti-thrombotic agent. GH9001 represents a combination of a medium molecular weight heparin combined with a fractionated highly sulfated dermatan sulphate, which may have advantages over current anti-thrombotic therapies.

GlycoDesign is also developing ATH (anti-thrombin heparin covalent complex), a novel anti-thrombotic coating for devices such as in-dwelling catheters, heart valves and stents that are in human use. This technology is currently in pre-clinical testing and is expected to reduce the thrombogenic effects seen when non-physiologic materials are in contact with blood.

GlycoDesign's CORE2 inhibitor research is focused on the identification of novel small molecule inhibitors of the enzyme core-2 glycosyl transferase. Inhibition of this enzyme blocks leukocyte adhesion and migration and thus may be a new approach to the treatment of inflammatory diseases. GlycoDesign scientists are currently optimizing a number of molecules that show selective inhibition of this target.

Details of Inflazyme:

Inflazyme is a Vancouver based biopharmaceutical company focused on developing new therapies for the treatment of inflammation and other related diseases. Inflazyme's lead technologies are a range of novel, small molecule LSAIDs (Leukocyte Selective Anti-Inflammatory Drugs) that are being developed for a variety of inflammatory diseases. The Company is developing three distinct series of LSAIDs - the IPL5, IPL12 and IPL99 series. To date three LSAID molecules, from the IPL5 series, have entered human clinical trials.

The most advanced LSAID molecule, IPL512,602 is currently in development for respiratory diseases in partnership with Aventis Pharma and is expected to enter into Phase II clinical trials in Q2'03. This remains as Inflazyme's highest priority. In November 2002 Aventis agreed to take over all program costs for the development of IPL512,602. At the same time the partnership was expanded by the addition of a new LSAID molecule, from Inflazyme's IPL12 series, as a second potential respiratory product.

Inflazyme has other LSAIDs in clinical and pre-clinical development for other inflammatory diseases that are not included in the Aventis partnership.

Inflazyme has also developed a number of inhibitors of the enzyme phosphodiesterase 4 (PDE4). A lead molecule in this series, IPL455,903, was recently partnered with Helicon Therapeutics Inc. as a potential new treatment for disorders of memory associated with stroke and Alzheimer's disease. Other PDE4 molecules remain in development by Inflazyme.

Conference Call

Inflazyme's President and Chief Executive Officer, Ian McBeath and GlycoDesign's President and Chief Executive Officer, Michael Thomas, will host a conference call to discuss this transaction, on April 9th at 8:30 a.m. EST. Live audio of the conference call will be simultaneously broadcast and made available to members of the news media, investors and the general public via Inflazyme's website at www.inflazyme.com. Audio replay of the conference will be available two hours following the completion of the call via Inflazyme's website, or by dialing 1 866 518 1010 (toll free) or 416 252 1143, until Wednesday, May 7, 2003.

Statements in this news release other than historical information are forward-looking statements subject to risks and uncertainties. Actual results could differ materially depending on factors such as the availability of resources, the timing and effects of regulatory actions, the strength of competition, the outcome of litigation and the effectiveness of patent protection. Additional information regarding risks and uncertainties is set forth in the current Annual Information Form for Inflazyme and GlycoDesign on file with the Canadian Securities Commissions.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this information.