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Cubist Pharmaceuticals And XTL Biopharmaceuticals Complete License Agreement for Worldwide Rights to Hepatitis B Product.

Business Editors/Health/Medical Writers

BIOWIRE2K

LEXINGTON, Mass. & REHOVOT, Israel--(BUSINESS WIRE)--June 3, 2004

Currently in Phase 2b Trials, Product Would Address $100 Million

Market for Prevention of Hepatitis B Infection in Liver

Transplant Patients

Cubist Pharmaceuticals, Inc. (Nasdaq: CBST) and XTL Biopharmaceuticals Ltd. (LSE: XTL) (XTLbio) today announced the completion of a license agreement for the worldwide development and commercialization of XTLbio's investigational monoclonal antibody product currently known as HepeX-B(TM). HepeX-B is in a Phase 2b study for the prevention of re-infection by the Hepatitis B virus (HBV) in liver transplant patients, a market currently estimated to be about $100 million worldwide.

The companies will continue the ongoing international Phase 2b study and, if successful, will continue late-stage clinical development of the product candidate. Cubist will fund the development costs of HepeX-B and will be solely responsible for registration and commercialization of the product worldwide. Under the terms of the agreement, Cubist will pay XTLbio collaboration support and an up-front payment totaling $3.0 million over the next two years, and may pay an additional $3.0 million upon the achievement of certain regulatory milestones. Cubist has also committed to pay XTLbio a tiered royalty on any sales generated from HepeX-B that ranges from 10-17% of net sales.

"This commercial agreement represents a significant achievement for XTLbio," said Dr. Martin Becker, XTLbio's President and CEO. "Cubist's focus on antiinfectives and their proven ability to get a product registered and launched in the U.S. through a seasoned, hospital-focused sales team made the company a very attractive partner to us. We feel this agreement not only validates our proprietary technology, but also would provide us with a revenue stream should HepeX-B ultimately be approved. This agreement is also consistent with our strategy to leverage our technology through the establishment of licensing or co-development agreements on candidates that have achieved clinical proof of principle, and enables us to allocate significant resources to our ongoing hepatitis C development programs."

Michael W. Bonney, President & CEO of Cubist commented: "HepeX-B represents an exciting development opportunity for Cubist. Due to its potential safety and ease of use advantages over existing therapies, we believe that HepeX-B has the potential to become the new standard of care for the prevention of HBV re-infection in liver transplant patients. The product also fits very well with our experience in the antiinfective area and adds an important, late-stage development candidate to our pipeline. HepeX-B represents a unique commercial opportunity, as the market is highly concentrated, with a limited number of transplant centers around the world performing the majority of procedures. In the U.S., these institutions overlap fully with Cubist's current sales effort on Cubicin(R) (daptomycin for injection), our flagship antibiotic product. We look forward to working with XTLbio to bring this innovative and valuable product to market."

About HBV

Hepatitis B is most commonly caused by the Hepatitis B virus, which, according to Datamonitor, has infected over 2 billion people around the world. Although a vaccine against HBV was introduced in 1982, globally, 350 million people are infected chronically with the disease and approximately 1 million people die each year as a result of complications from HBV infection. Current treatment regimens for chronic HBV often include use of interferon alpha or an antiviral drug. Despite these treatment options, chronic HBV can lead to severe liver damage and patients may require liver transplantation.

HBV-diseased livers are currently estimated to represent 5% of all liver transplants in the U.S., or between 200 and 300 liver transplants per year. To prevent re-infection of the new liver with HBV, patients are currently treated with HBV immunoglobulin (HBIg) combined with an antiviral compound, such as lamivudine. The global market for HBIg is estimated to be about $100 million, despite its limitations, which include large injection volumes, flu-like adverse events and the risk of blood-borne infections.

About HepeX-B

HepeX-B is a combination of two fully human monoclonal antibodies, selected using XTLbio's pre-clinical Trimera(TM) model, that target HBV surface antigens. It is currently in an international Phase 2b study for the prevention of infection by HBV in liver transplant patients. In clinical studies, HepeX-B maintained serum levels similar to or higher than the current first-line treatment, HBIg, using 1,000 times less drug. Due to its smaller injection volume, HepeX-B may be formulated as a subcutaneous injectable product. HepeX-B has already been granted Orphan Drug Status in both the U.S. and the European Union.

About Cubist

Cubist Pharmaceuticals, Inc. is a biopharmaceutical company focused on the research, development and commercialization of antiinfective products that meet unmet medical needs. In the U.S., Cubist markets Cubicin(R) (daptomycin for injection), the first antibiotic in a new class of antiinfectives called lipopeptides, for the indication of complicated skin and skin structure infections caused by certain Gram-positive bacteria. CUBICIN is currently the only once-daily bactericidal antibiotic approved in the U.S. with activity against both methicillin-susceptible and methicillin-resistant Staphylococcus aureus (MSSA and MRSA). Cubist's pipeline includes HepeX-B(TM), a monoclonal antibody biologic currently in a Phase 2b study for the prevention of infection by the Hepatitis B virus (HBV) in liver transplant patients, and research efforts focused on novel members of the lipopeptide class of molecules. Cubist is headquartered in Lexington, MA.

About XTLbio

XTL Biopharmaceuticals Ltd. (XTLbio) is a biopharmaceutical company developing drugs against hepatitis. XTLbio's HepeX(TM) product line - now in clinical trials - has the potential to introduce revolutionary therapies for viral hepatitis, including prevention of re-infection in transplanted livers, the Company's primary focus, and a longer-term cocktail approach in treating chronic illness. XTLbio believes its primary competitive advantage lies in its patented Trimera(TM) technology, which enables the development of fully human monoclonal antibodies and models of human disease for pre-clinical drug validation. XTLbio currently has an ongoing Phase 2a clinical program for hepatitis C associated with liver transplantation (HepeX-C(TM)) and preclinical programs for chronic hepatitis C. Established in 1993, XTLbio became a public company in 2000, with shares traded on the London Stock Exchange under the symbol XTL.

Cubist Safe Harbor Statement

Statements contained herein that are not historical fact may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and such statements are subject to a variety of risks and uncertainties. There are a number of important factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements made by Cubist. These factors include, but are not limited to: (i) the level of acceptance of CUBICIN by physicians, patients, third-party payors, and the medical community generally; (ii) Cubist's ability to continue to develop, secure additional regulatory approvals for, and successfully market, CUBICIN; (iii) Cubist's ability to manufacture CUBICIN on a commercial scale; (iv) commercialization of products that are competitive with CUBICIN; (v) Cubist's ability to discover or in-license drug candidates; (vi) Cubist's ability to successfully develop drug candidates in its pipeline, including HepeX-B; (vii) Cubist's ability to successfully commercialize any product or technology developed by Cubist; (viii) Cubist's ability to establish and maintain successful manufacturing, sales and marketing, distribution, and development collaborations; (ix) legislative or regulatory changes adversely affecting Cubist or the biopharmaceutical industry; (x) Cubist's ability to protect its intellectual property and proprietary technologies; and (xi) Cubist's ability to finance its operations. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in Cubist's recent filings with the Securities and Exchange Commission, including those factors discussed under the caption "Risk Factors" in such filings.

Cubist and Cubicin are registered trademarks of Cubist Pharmaceuticals, Inc.; HepeX-B and Trimera are trademarks of XTL Biopharmaceuticals Ltd.
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Geographic Code:1USA
Date:Jun 3, 2004
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