SOURCE: MDM Group, Inc

August 09, 2005 09:55 ET

Smallpox Vaccine Development Agreement

SANTA CLARA, CA -- (MARKET WIRE) -- August 9, 2005 -- MDM Group, Inc. (OTC: MDDM) advises that its Biodefense Division has entered into agreement with AvaxisBio for the development of a smallpox vaccine designed for safe and effective public immunization to counter bioterrorism. AvaxisBio is developing a vaccine by rational design, made from small peptide molecules based on selected portions of the Variola virus genome selected for optimal effects on the human immune system.

Smallpox is a top priority on the bioterrorism threat list. Since routine vaccinations stopped in 1980 and vaccination offers immunity for only seven to ten years, the world is in effect a virgin population, highly susceptible to reintroduction of the virus. Although the official repositories of the virus are maintained under high security in the United States and Russia, there is concern that terrorists may have access to certain smallpox virus and could use it as a weapon. If this happened, a large percentage of the population could become seriously ill as smallpox is highly contagious and virulent. As many as 30% of those infected could die as there is no known cure -- and if the hemorrhagic or flat smallpox variants were to be used the death rates would be much higher, 95-99%.

Currently available smallpox vaccines use modified live Vaccinia virus that are costly and time intensive in their application. As an indication, to vaccinate just a million people per day, using current methods and immunization process, would require about 35,000 medical teams as well as the infrastructure to support the initiative. Further, current vaccines are also not considered safe for use in certain segments of the population, especially those with skin diseases, immune disorders, HIV, and pregnant or lactating mothers. In addition, the FDA requires a "Black Box" (serious danger) warning on a large proportion of the currently available doses of smallpox vaccine due to concerns about occurrence of heart toxicity called acute myopericarditis in healthy individuals.

In early 2003, the U.S. government decided to vaccinate 500,000 civilian healthcare workers who would be responsible for the vaccination of the general population if necessary. By April 13, 2003, the Centers for Disease Control reported 86 potentially with serious side effects, including several deaths and several dozen cases of myocarditis -- consequently only just 32,644 healthcare workers volunteered to be vaccinated. Vaccine safety is of primary concern.

For smallpox vaccine to be available to the entire population in the event of an outbreak, MDM Group and AvaxisBio are targeting a greatly improved product and vaccination process. Both are clearly needed should such a threat materialize.

AvaxisBio Corporation was incorporated in the state of Delaware on November 8, 2004. Based on the Business Plan developed by Dr. Amir Maksyutov, senior technical director and inventor in cooperation with the US Department of State BII program (BioIndustry Initiative), AvaxisBio has attracted significant potential investment interest in the company. AvaxisBio is focused on commercializing the Maksyutov Antigenic Peptide technology platform, a method for designing vaccines that takes into account the genetic variability of pathogens that cause AIDS, Hepatitis C, and Influenza. BII enabled the commercialization of this platform through a strategic PCT (Patent Convention Treaty) filing after the early-stage discovery work was funded by BTEP (Biotechnology Engagement Program).

AvaxisBio has developed a computerized method that allows for selection of the specific regions within viral proteins that will cause a desirable immune effect against smallpox, while ruling out those regions which might cause autoimmune or other side effects. This method, based on original antigenic similarity matrix, takes into account small changes in the amino acid building block sequence of the protein regions and whether they do or do not affect the safety or efficacy of the vaccine component.

MDM Vice President, Ed Stephen, has indicated that the new vaccine is expected to be safe in all population segments as well as be effective against all strains of pox viruses by the nature of the component selection process that is proprietary to AvaxisBio.

Under the terms of the AvaxisBio agreement, MDM Group will fund certain ongoing expenses during a due diligence period, after which MDM will acquire a 50% interest in a joint company that will be newly-formed for the purpose of developing and testing smallpox vaccines, in exchange for $0.5 million of initial seed capital and other non-monetary contributions to support on-going research activities.

MDM Group's Biodefense Division is focused on discovery of and rapid development of vaccines and other countermeasures to support the Homeland Defense requirements of the United States government and its citizens as well as those in other countries.

MDM Group's business interests are focused on the Security, Biodefense and Homeland Security industries.

Safe Harbor Statement

The information in this release, other than historical information, may be considered forward-looking statements within the provisions of the Private Securities Litigation Reform Act of 1995. Projection and other forward-looking statements and management expectations regarding future events and/or financial performance of the Company -- although given in good faith -- are inherently uncertain and actual events and/or results may differ materially.

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