Vital Therapies Acquires Assets of VitaGen to Continue Clinical Development of ELAD Device for Treating Liver Failure.

Business Editors/Health/Medical Writers

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SAN DIEGO--(BUSINESS WIRE)--Oct. 1, 2003

Vital Therapies, Inc. (VTI) has acquired the assets of VitaGen, Incorporated, to continue the development of ELAD(R) (Extracorporeal Liver Assist Device), a therapeutic device for the treatment of liver failure. ELAD has demonstrated promising results to date in Phase I and II clinical trials. VTI plans to restart the ELAD clinical program with a new management team and revised clinical strategy to expedite development and commercialization of the device. Financial terms of the deal were not disclosed.

The ELAD functions as a "liver dialysis" system that augments the metabolic functions of a patient's liver, thereby enabling a bridge to transplant or liver recovery. ELAD uniquely employs human liver cells, encapsulated in hollow fiber cartridges, that provide liver function as various wastes and byproducts are exchanged across a semi-permeable membrane. To date, ELAD has been tested in 52 acute liver failure patients in Phase I and Phase II trials at leading transplant centers. The device has shown to be safe in these studies and demonstrated substantial clinical promise. The Phase II trials were halted due to lack of funding.

The new management team is currently headed by Terry Winters, Ph.D., Chairman and CEO and a Special Limited Partner of Valley Ventures, VTI's lead investor, and Kameron Maxwell, Ph.D., who has joined the company as Vice President of Development. Dr. Winters has extensive experience as the CEO of other venture-financed companies, and Dr. Maxwell has over 30 years of experience in medical device and pharmaceutical development, management and regulatory affairs. The company has also retained a number of core technical and operational personnel previously affiliated with VitaGen. Included in the assets acquired by VTI is a GMP-eligible state of the art manufacturing facility that is prepared to supply devices for the clinical program.

"VTI has a unique opportunity to begin operations with a product already in mid-stage human trials, in an area of great therapeutic need and commercial potential," said Dr. Winters. "We have a core team in place and are implementing a focused and efficient strategy that we expect will allow us to restart the ELAD clinical trials in 2004. We are gratified that there is considerable support within the transplant community for the continuation of these trials."

In the United States alone, there were over 5,000 liver transplants in 2002, with another 18,000 potential transplant recipients on the waiting list. There is a much larger, longer term, potential patient population of over 300,000 people with chronic liver disease who could be potentially treated with the ELAD once it is commercialized.

"Transplantation is often the only effective therapeutic option for patients suffering from severe, acute liver failure, as well as for patients with advanced end stage chronic liver disease. Many of our patients, however, die waiting for a liver due to the severe shortage of available donor organs in the United States," said Dr. Winfred Williams, member of the VTI Clinical Advisory Board and lead investigator at Massachusetts General Hospital. "We are very encouraged to date by the initial trial results of ELAD as a key strategy to bridge these patients successfully to liver transplantation. As such, we believe ELAD warrants further clinical investigation based on the data accumulated."