Innova Memphis Inc. Invests In arGentis Pharmaceuticals.

MEMPHIS, Tenn. -- Innova Memphis Inc., an early-stage investment fund, announced today it has invested in arGentis Pharmaceuticals LLC, a specialty pharmaceutical company based in Memphis.

Innova was created by the Memphis Bioworks Foundation to fund Memphis companies with outstanding Intellectual Property and to help them become commercially successful.

"Innova was chartered to find intellectual property, build a management team around the IP and then commercialize it," said Ken Woody, president of Innova. "arGentis Pharmaceutical's intellectual properties made them a very good investment opportunity for Innova and for Memphis. arGentis has a strong strategic focus on addressing a critical need with its Dry Eye Syndrome product. This is a billion dollar market with only one major product on the market today. arGentis could take a strong leadership position in that market, either by itself or by partnering with a larger ophthalmic company."

arGentis has two therapies that will be used to treat Dry Eye Syndrome (DES): ARG101(T) treats menopausal women, and the other ARG102(P) treats men and younger women. What makes these therapies so unique is the method of delivery. The treatments are applied as a cream or gel to the outer upper and lower eyelids for transdermal delivery of the active pharmaceutical ingredient to the affected glands of the eye.

"Part of our attraction to arGentis was that the founders are local Memphis business leaders who are passionate about creating a successful pharmaceutical company in Memphis," said Woody. "Initially working through the Memphis Bioworks Foundation, the management of arGentis identified therapies at the Southern College of Optometry to treat Dry Eye Syndrome. A search for additional technologies to treat chronic diseases led arGentis to a treatment for systemic sclerosis (scleroderma) developed by the University of Tennessee Health Science Center."

Systemic sclerosis (SSc), is a life-threatening autoimmune disease. In the United States, approximately 80,000 people suffer from SSc (Mayes, 2003), with a similar number of sufferers in the European Union. The median survival from the time of diagnosis is only 11 years. SSc results from the patient's immune system attacking its own type 1 collagen, leaving a thick build up of collagen on the skin and internal organs, eventually resulting in organ failure and death. arGentis' therapy, ARG201, has already completed a Phase II clinical trial and if successfully commercialized will have huge impacts on patient care. In its large multicenter Phase II trial, ARG201 demonstrated it has the potential to reverse long-term collagen buildup and significantly extend life expectancy. By inducing immune tolerance, ARG 201 causes an immunologic change that enables the body to cease its autoimmune attack. ARG201 recently received orphan status from the Food and Drug Administration.

As part of the investment, Innova will become a shareholder in arGentis Pharmaceuticals and Ken Woody will hold a position on the arGentis Board of Directors.

"We are excited about Innova's investment," said Tom Davis, president and CEO, arGentis Pharmaceuticals. "The investment will be instrumental in arGentis continuing to execute its strategic plan and in creating value for our stakeholders by allocating additional resources to move our dry eye therapies into clinical trials later this year. We also will continue to develop the infrastructure to move ARG201 into a Phase III clinical program. We welcome Ken to our board and look forward to working with him to achieve these important milestones. We also believe this significant investment demonstrates Innova's commitment in further expanding the biomedical community in the Memphis area."

The final reason Innova expressed an interest in arGentis is that in addition to having great potential, it also supports the efforts of the local universities. arGentis' success will bring royalties to both the Southern College of Optometry (SCO) and the University of Tennessee Health Science Center, enabling both institutions to continue with their strong research focuses and develop more intellectual property that has commercial viability.

Innova is one of three strategies from the MemphisED program aimed specifically at developing a culture of innovation and entrepreneurialism in Memphis. MemphisED is the economic development component of the larger Memphis Fast Forward initiative.

"Innova resulted from the MemphisED program," said Steven J. Bares, executive director of the Memphis Bioworks Foundation. "This investment is right on track to grow new jobs in the bioscience sector and help to create an entrepreneurial center of excellence in the Memphis community."

About Innova

Innova invests in young, rapidly growing companies that have the potential to grow into significant economic contributors. The organization focuses on technology and defensible service companies based in Memphis, Tenn., - including Logistics, Medical Device, BioTech and BioAg. Innova was created by the Memphis Bioworks Foundation to help establish Memphis as a national center of Excellence. Innova's goal is to nurture the growth of high technology and entrepreneurial efforts in the Mid-South that will result in significant job creation, economic growth and competitiveness. To learn more about Innova, visit www.innovamemphis.com.

About arGentis

arGentis Pharmaceuticals, LLC is a specialty pharmaceutical company located in Memphis, Tenn. The company seeks to in-license therapies for chronic diseases with demonstrated proof of concept for further development and commercialization. The company has two pre-clinical drug formulations in development for the treatment of Dry Eye Syndrome. In addition, arGentis has licensed a treatment for Systemic Sclerosis, ARG201 which has successfully completed a Phase II clinical trial. http://www.argentisrx.com.