New Anticancer Compound Arrests the Growth of Tumors in Laboratory Mice While Sparing Normal Tissue.

LONDONDERRY, N.H.--(BW HealthWire)--August 30, 1999--

Diatide, Inc. (Nasdaq:DITI) today announced that a team of scientists from Diatide and the University of Alabama (UAB) have found that a new compound in a series of anticancer drugs being developed by Diatide, rhenium-188 P2045, can arrest the growth, and even induce regression of an aggressive pancreatic tumor in laboratory mice, without apparent harm to normal tissues.

"The new drug is designed to "home in" on cellular receptors that are overexpressed on the surface of the pancreatic tumor cells, thereby delivering a radioisotope "warhead" to the tumor. This highly specific targeting of the tumor may account for apparent lack of side effects seen in the animal studies so far, and lays the groundwork for further laboratory and clinical research," said Diatide's President and CEO, Richard T. Dean, Ph.D.

Re-188 P2045 combines a small-molecule synthetic peptide with a molecule of rhenium-188. The peptide is designed to adhere to somatostatin receptors that are overexpressed by several types of cancer, while the Re-188 isotope "warhead" emits a beta ray that destroys tumor cells.

At the Society of Nuclear Medicine meeting held in Los Angeles in June, Dr. Kurt Zinn, Assistant Professor in the Department of Radiology at UAB, and co-workers presented results from a study in laboratory mice using an earlier compound in this series of anticancer drugs. In that study, at doses that were effective in causing tumor regression, with that compound an effect on some normal tissues also was noted. With the new agent, Re-188 P2045, tumor regression was observed at a lower dose and with no apparent effect on normal tissues.

A similar drug of Diatide's, NeoTect(TM) (Kit for the Preparation of Technetium Tc 99m depreotide injection), was recently approved by the Food and Drug Administration for diagnostic applications. NeoTect(TM), which is labeled with the isotope Tc-99m, is indicated to identify somatostatin receptor-bearing pulmonary masses in patients presenting with pulmonary lesions on computed tomography (CT) and/or chest x-ray who have known malignancy or who are highly suspect for malignancy.

"The dose-related response and unremarkable side effect profile shown in this study suggests that Re-188 P2045 is highly specific for delivering this therapeutic isotope directly at the very aggressive tumor in this model," said Dean. "We expect to initiate a program for the clinical evaluation of this new therapeutic agent later this year." Diatide is also developing additional therapeutic agents to treat lung, melanoma and breast cancer.

NeoTect(TM) is the prototype for Diatide's "Find, Fight, and Follow" strategy in oncology. As part of this strategy, Diatide is developing the therapeutic agent P2045 to treat lung and breast cancer. Clinical research studies on this product are expected to begin later this year.

Diatide, based in New Hampshire, is a specialty pharmaceutical company developing a novel line of disease-specific imaging and therapeutic agents - Techtides(R) and Theratides(TM) - as pharmaceuticals with commercial and medical promise. Diatide has applied its patented technologies in the areas of peptide engineering and radiolabeling chemistry to produce a number of small molecules that bind with high affinity and specificity to targets on diseased tissue and to which a radioisotope can be attached for imaging or therapeutic purposes.

Diatide's first product, AcuTect(TM) for the imaging of acute deep vein thrombosis (blood clots) in the legs, received marketing approval in September 1998 and was launched in October 1998. The Company's second product, NeoTect(TM) for the imaging of suspected malignant lung tumors received FDA approval on August 3, 1999. For NeoTect(TM) and AcuTect(TM), Diatide has a marketing and sales collaboration with Nycomed Amersham. Diatide is actively seeking corporate alliances for its cancer therapy products and other imaging products in its pipeline. Diatide owns 45 issued U.S. patents and 52 granted foreign patents, and has licensed rights to seven additional U.S. patents and their foreign counterparts.

More information on the Company can be obtained from its web site, www.diatide.com

This press release contains forward-looking statements that involve a number of risks and uncertainties. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "intends," and similar expressions are intended to identify forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth under the caption "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Risk Factors" ("Risk Factors") in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 which is on file with the Securities and Exchange Commission. These Certain Factors are incorporated herein by reference. As more fully described in the Certain Factors, the Company's potential products (other than AcuTect(TM) and NeoTect(TM)) are all still in development; there can be no assurance that based on its capital resources the Company's research programs will be conducted as planned; there can be no assurance that the Company's potential products will demonstrate the safety, efficacy, and cost attributes currently expected by the Company or that the results demonstrated in preclinical studies such as the results referred to above will be demonstrated in clinical trials; there can be no assurance that the Company will receive regulatory approvals to commence or continue clinical trials of product candidates or to market such products or as to the timing of such approvals; and, there can be no assurance that AcuTect(TM), NeoTect(TM), or the Company's other potential products will be commercially successful, or accepted by the medical community or third-party payors, or that technologies, patents and proposed products of other companies will not render the Company's products obsolete or noncompetitive.