Interferon Sciences Acquires Option to Purchase Major Stake in Developer of Dendritic Cell Cancer Vaccines.

Business & Health/Science Editors

NEW BRUNSWICK, N.J.--(BUSINESS WIRE)--Oct. 17, 2000

Technology Results From 10-year $25 Million Program At The

University Of Pittsburgh

Interferon Sciences, Inc. (ISI) (OTC-BB:IFSC) said it has acquired an option to purchase approximately 50 percent of the common stock of closely-held Metacine, Inc., which develops anti-cancer vaccines based on dendritic cell technology.

Metacine's technology is the product of a $25 million 10-year research effort by a team of six scientists at the University of Pittsburgh Medical Center led by Michael T. Lotze, MD, widely recognized as one of the world's leading experts in dendritic cell therapy. The company has an exclusive agreement with the University of Pittsburgh for a portfolio of issued and pending patents resulting from this research.

A Phase I clinical trial is currently running at the University of Pittsburgh for treatment of melanoma, the deadliest form of skin cancer. The trial uses multiple melanoma antigens pulsed into dendritic cells (DCs) ex vivo to form allogeneic vaccines that stimulate the immune system to attack tumor cells that display these antigens.

Additional Phase I trials using an autologous vaccine, in which the patient's own tumor cells are co-cultured with DCs to create an immune reaction against the specific antigens displayed by each patient's tumor, and in vivo methods for stimulating DCs are expected to begin within twelve months.

To date, a general lack of side effects has been observed by Metacine, and by others investigating DC-based therapy, in human clinical trials. In animal studies using multiple groups of 4-5 mice in each experiment, Metacine's different DC immunization techniques exhibited results that included tumor regression typically exceeding 50% of initial volume and in numerous cases complete disappearance of tumor, regression of tumor volume at metastatic sites, protection against challenge with tumor cells subsequent to DC administration, and increased survival of treated animals to 60 - 90 days. In contrast, all untreated control animals died within 20 - 30 days.

"The transaction with Interferon Sciences will allow Metacine to accelerate its development of new biological therapies based on our novel and highly promising DC technology," said James W. Sharpe, President and CEO of Metacine. "Our clinical and regulatory programs will be strengthened by the experience and expertise ISI will be able to contribute to Metacine as the company develops."

Lawrence M. Gordon, Chief Executive Officer of ISI, stated, " This is the first step in our plan to utilize our existing infrastructure and expertise to expand our portfolio of products and technologies beyond interferon. In addition, we plan to investigate potential therapeutic synergies between our multi-species natural alpha interferon and Metacine's dendritic cell technology."

Under the terms of the agreement, an independent third party has been retained to conduct a review and analysis of Metacine's intellectual property. The option, which ISI acquired for $100,000, may be exercised by ISI during the 60-day period following ISI's receipt of the review. If the option is exercised, Metacine shall issue to ISI common stock representing approximately 43 percent of Metacine in exchange for a combination of ISI common stock, cash, and services. In addition, ISI will receive a warrant exercisable for a period of 5 years, to purchase additional shares of Metacine at an increased value.

While Metacine and its scientific founders at the University of Pittsburgh are currently testing allogeneic vaccines similar to those being developed by other companies, Metacine's dendritic cell technology also differs from that of others in the field in that it utilizes the patient's own antigens vs. "off the shelf" antigens to stimulate immunodestruction of cancer cells. Using this approach, Metacine expects to be able to produce vaccines that are more effective than allogeneic vaccines since they are specific to each patient's tumor. By also developing in vivo methods for stimulation of DCs and the use of DCs as gene therapy vectors, Metacine is extending the basis of DC therapy beyond that typically used by other companies.

The essential feature of Metacine's therapeutic strategy is the modification and targeted activation of DCs, the body's primary antigen presenting cell, for the treatment of first cancer, and then viral disease, autoimmune disease and organ transplant rejection. The deployment of DCs results in a cellular immune response culminating in the production of two types of target-specific T cells (cytolytic and helper) that team together to find and destroy tumors and virally infected cells. For effective treatment of cancer (and chronic viral infections), a patient requires a large number of cytolytic and helper T cells. However, in the case of transplant rejection (and auto-immune disease), too many existing T cells attack donor (or normal) tissue; ultimately killing the donated organ (or causing auto-immune disease). Production of these T cells needs to be curtailed to improve the chances of a successful outcome.

Metacine is pursuing four different approaches to the therapeutic use of DCs for the treatment of cancer: (1) ex vivo cell processing using DCs pulsed with known antigens to create allogeneic vaccines, (2) ex vivo cell processing using patient DCs cultured with patient tumor cells to create multi-epitope, patient specific, autologous vaccines, (3) in vivo activation of DCs to stimulate the patient's immune system to attack the primary tumor as well as metastatic sites, and (4) use of DCs as "inteIligent" gene therapy vectors that carry therapeutic genes to the primary tumor, then stimulate the patient's immune system to attack the tumor and any metastatic sites.

Metacine's program for prevention of organ transplant rejection represents another important area of application for DCs. Ex vivo culturing and re-introduction of tolerogenic DCs down-regulates the patient's immune system by flooding the system with DCs that do not present the transplanted organ's antigens. Mouse models in which tolerogenic DCs are introduced to prevent rejection of transplanted tissue have shown highly positive results as evidenced by reduction of detrimental host vs. graft immune response, and significant extension of life following organ transplant.

Interferon Sciences, Inc. is a biopharmaceutical company engaged in the study, manufacture and sale of pharmaceutical products based on its highly purified, natural-source, multi-species alpha interferon. The Company's ALFERON N Injection(R) (Interferon Alfa-n3) product has been approved by the United States Food and Drug Administration for the treatment of certain types of genital warts, and is being studied for potential use in other indications.

The forward-looking statements contained herein reflect ISI management's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, all of which are difficult to predict and many of which are beyond the control of ISI, including, those risks and uncertainties detailed in the Company's periodic reports and registration statements filed with the Securities and Exchange Commission.

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