RheoGene, Inc. Merger with Intrexon Corporation Creates Biotech Firm Targeting Gene-Based Therapies.

Company to be Based in Blacksburg, Va.

NORRISTOWN, Pa. and BLACKSBURG, Va. -- RheoGene, Inc., a gene and cell therapy company based in Norristown, Pa., and Intrexon Corporation, a biotechnology company based in Blacksburg, Va., have announced plans to merge the two firms. The combined company will be named Intrexon Corporation and be headquartered in Blacksburg with supporting facilities in Norristown.

"Intrexon and RheoGene technologies are very complementary," said Intrexon CEO Robert Beech. "The safest and most effective gene-based therapies will require highly optimized gene programs that can be tightly regulated as to their on/off state, levels of expression and genomic positioning."

RheoGene has developed technology to manage gene expression - a key component of gene-based therapies. The suburban Philadelphia-based company specializes in gene-regulation systems designed to deliver precise genetic control for new medical applications including cellular and gene therapies, genomics and enhanced protein expression. RheoGene's proprietary system uses a patented small-molecule mediator that can turn genes "on" or "off" as well as adjust the level of gene activity.

Intrexon uses its UltraVector[TM] technology to rapidly assemble novel gene combinations from an extensive library of natural and engineered DNA components. The company is currently developing innovative bio-molecules that enable researchers to adjust the activity of specific protein interactions in targeted locations within cells.

The University of Pittsburgh Medical Center (UPMC), which acquired RheoGene in 2003, has provided the financial support for the company's research and development activities both in Norristown and in Pittsburgh. UPMC will retain a significant ownership stake and a seat on the board of the merged company.

Intrexon relocated its operations to Blacksburg, Va. from Cincinnati in 2004. The company has received significant funding from NewVa Capital Partners, an investment partnership founded by the Virginia Tech Foundation, Carilion Health System and Third Security, LLC.

In 2005, RheoGene was awarded more than $4 million from the Michael J. Fox Foundation for Parkinson's Research to refine its gene-regulation technology for use with key proteins and growth factors thought to protect critical neuron function and survival. RheoGene also is using its patented technologies to explore possible treatments for melanoma. The company has worked closely in these endeavors with the University of Pittsburgh Cancer Institute and the university's McGowan Institute for Regenerative Medicine.

The combination of Intrexon and RheoGene creates an advanced research and development biotechnology enterprise that is expected to establish a leading position in gene-based therapeutics.

"Our modular UltraVector[TM] system enables rapid combinatorial optimization of complex gene programs. The RheoGene technologies deliver tight gene regulation and controlled genomic positioning. The integration of those complementary capabilities, across the R&D spectrum from discovery to the clinic, will enable significant advances in gene-based medicine," noted Beech.

"This is an exciting opportunity for RheoGene," said RheoGene CEO Tom Tillett. "The merger will significantly enhance our therapeutic technology and research capabilities as well as provide the resources to accelerate our lead RheoSwitch[R] Therapeutic System-based therapeutic products for cancer and central nervous system disorders into the clinic."

Tillett added: "RheoGene very much appreciates the support we have received from UPMC over the past three-plus years, which has been instrumental in the refinement of our technologies and launching our first set of therapeutic programs. The merger with Intrexon will position those therapeutic programs in the context of a fully integrated gene-based R&D company with access to substantial private capital."

The management team of Intrexon will be headed by Robert Beech as chief executive officer and Tom Tillett as chief operating officer, and will include additional executives from both companies. All RheoGene employees will be offered positions with Intrexon and new employees will be added at both locations in order to accelerate advancement of the combined research and therapeutic programs.

The merger is subject to approval by the companies' shareholders, as well as regulatory agencies and customary closing conditions. The merger is expected to close in the first quarter of 2007. Financial terms were not disclosed.

About Intrexon Corporation

Intrexon is a privately-held biotechnology company located at the Virginia Tech Corporate Research Center in Blacksburg, Va. The company is currently addressing the need for bio-molecular tools that enable researchers to modulate and report the activity of protein-protein interactions in pre-determined subcellular locations. The company uses its proprietary UltraVector[TM] platform technology to rapidly assemble novel transgene combinations from a robust library of natural and engineered DNA modules.

About RheoGene Inc.

RheoGene is a gene-based therapeutics company and a wholly-owned affiliate of the University of Pittsburgh Medical Center with operations in Norristown, Pa. and Pittsburgh. The company's proprietary RheoSwitch[R] Therapeutic System (RTS) and DirectIt[TM] recombinase platforms are novel solutions to safe, targeted and regulated cell and gene therapies that deliver the right dose, to the right place, at the right time.