SOURCE: Viral Genetics, Inc.

December 20, 2007 15:39 ET

Viral Genetics Announces Licensing Deal With University of Colorado and V-Clip Pharmaceuticals, Inc.

AZUSA, CA--(Marketwire - December 20, 2007) - Viral Genetics, Inc. (PINKSHEETS: VRAL), a biotechnology company that discovers and develops immune-based therapies for HIV and AIDS using its thymus nuclear protein ("TNP") compound, has entered into several agreements with the University of Colorado and V-Clip Pharmaceuticals, Inc. relating to the exclusive worldwide rights to patent applications and know-how developed by Dr. Karen Newell, PhD, of the University of Colorado at Colorado Springs in the fields of diagnosing and treating HIV/AIDS, Hepatitis C, and Herpes.

The rights have been acquired under an Exclusive License Agreement between the University of Colorado, Viral Genetics, and V-Clip Pharmaceuticals, Inc. V-Clip Pharmaceuticals was formed specifically for the acquisition of the license and its shareholders are Viral Genetics, University License Equity Holdings, Inc. (the University of Colorado's equity holding arm), Karen Newell, Evan Newell, PhD, Robert Berliner, and Dr. Robert Melamede. Following the successful completion of tests described below, Viral Genetics has the right to acquire V-Clip Pharmaceuticals in exchange for shares, options and warrants.

The licensed rights include several important patent applications that may explain the mechanism of action of the Company's TNP compound, including the reductions in HIV viral load observed in the Company's recent South African HIV/AIDS clinical trial.

The rights relate to modulating the immune system up or down, and to causing a process called apoptosis. This is accomplished using small protein fragments (called peptides) to displace other "bad" peptides that have been picked up by immune system cells. These so-called bad peptides sometimes result from the body's natural attempts to fight off viruses, bacteria, and various diseases, including HIV/AIDS. Apoptosis is the body's process of killing off harmful cells, and is believed to be an important factor in the control of a variety of illnesses.

A key area of Dr. Newell's research is based upon the idea that certain of these harmful peptides result in a harmful immune response that may not only hurt a person's ability to fight off an illness, but perhaps even cause certain autoimmune diseases. As a result, she developed a model for the types of chemical compounds that could displace these harmful peptides and allow the immune system to respond more beneficially. After preliminary analysis of TNP it is believed that it contains several peptides that fit the model's profile. Viral Genetics, V-Clip and Dr. Newell now plan to move forward with various studies of the TNP components to verify this.

To this end, Viral Genetics has agreed to complete these tests at an approximate cost of $600,000. Viral Genetics intends to finance this testing itself, which would require private placement or other sales of Viral Genetics securities, or through grant funding from public and private sources. It is Viral Genetics' intention to acquire V-Clip upon successful completion of this testing.

"Upon completion, the proposed studies would provide the 'proof of principle' necessary to move forward with clinical trials in US. With this information we will be seeking an optimized and purified version of the current TNP compound to determine if it is capable of a stronger antiviral result while maintaining the low toxicity and side effect profile seen in Viral Genetics' prior studies. As importantly, the results of the proposed studies are expected to help identify a next and possibly improved generation of rationally designed biological therapies for HIV/AIDS," said Dr. Newell.

Dr. Newell is Associate Professor in the Department of Biology at the University of Colorado, Scientific Director of the CU Institute of Bioenergetics, the Clement and Margaret Markert Endowed Professor of Biology, Associate Director, Center for Computational Biology, and Adjunct Assistant Professor at Dartmouth Medical College. She has authored or co-authored several dozen peer-reviewed papers predominantly focused on immunology and cellular metabolism, and she has over 30 issued or pending patents.

"We look forward to the results of Dr. Newell's studies. These studies may shed important insight unto the mechanism of TNP and hopefully we will discover which peptides within TNP have the greatest anti-HIV effect. This would allow us to optimize the compound prior to the next round of clinical trials," said Dr. Eric Rosenberg, Associate Professor of Medicine at Harvard Medical School and Chairman of the Viral Genetics Scientific Advisory Board.

The Exclusive License Agreement includes various royalties and milestone payments that are payable to the University of Colorado upon certain events including sales of diagnostic or therapeutic products, certain FDA milestones, and other events. Viral Genetics has also agreed to various other performance milestones.

"Dr. Newell's basic scientific research and discoveries appear to compliment the over 10 years of human clinical experience we at Viral Genetics have. The acquisition of these rights holds significant promise to finally close the circle on our understanding of TNP including identifying exactly what it is and exactly how it works," said Haig Keledjian, President of Viral Genetics.

The Company is now working with the University of Colorado on completion of a Sponsored Research Agreement, which will outline a program of research to be performed by Dr. Newell at her lab.

In a 2005-2006 study, a reduction of HIV viral load was observed in a subset of patients after treatment with VGV-1 versus patients receiving placebo. As reported by Dr. Patrick Bouic in the Company's poster presentation at the 2006 XVI International AIDS Conference, VGV-1 treated subjects also demonstrated apparent beneficial immunological changes when compared with placebo.

The World Health Organization estimates approximately 40 million people are now living with HIV. Even with the available treatments for AIDS, there are large numbers of people that need alternative therapies and hope remains that progress will be made in discovering new therapies that bolster patients' immune systems.

About VGV-1

VGV-1 is a therapy based on thymus nuclear protein which is extracted from bovine thymus tissue. As a type of immune-based therapy, it focuses on boosting the immune system to allow the body to fight HIV more efficiently. Thymus nuclear protein technology has been studied in five human clinical trials for the treatment of HIV infection and AIDS.

About Viral Genetics

Viral Genetics, Inc. is a biotechnology company that discovers and develops immune-based therapies for HIV and AIDS using its thymus nuclear protein compound. This compound may have other potential applications for other infectious, autoimmune, and immunological deficiency diseases that the company intends to study in the future. Viral Genetics believes that VGV-1 represents a significant and unique approach to treating HIV due to the apparently novel mechanism, low toxicity profile, simple dosing regimen, and short-course of treatment. Online at

This news release contains forward-looking statements that involve risks and uncertainties associated with financial projections, budgets, milestone timelines, clinical development, regulatory approvals, and other risks described by Viral Genetics, Inc. from time to time in its periodic reports filed with the SEC. VGV-1 is not approved by the US Food and Drug Administration or by any comparable regulatory agencies elsewhere in the world. While Viral Genetics believes that the forward-looking statements and underlying assumptions contained therein are reasonable, any of the assumptions could be inaccurate, including, but not limited to, the ability of Viral Genetics to establish the efficacy of VGV-1 in the treatment of any disease or health condition, the development of studies and strategies leading to commercialization of VGV-1 in the United States, the obtaining of funding required to carry out the development plan, the completion of studies and tests on time or at all, and the successful outcome of such studies or tests. Therefore, there can be no assurance that the forward-looking statements included in this release will prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the forward-looking statements should not be regarded as a representation by Viral Genetics or any other person that the objectives and plans of Viral Genetics will be achieved.

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