March 25, 2008 07:00 ET

Amarillo Biosciences Enters Into a License and Supply Agreement With CytoPharm for Low Dose Oral Interferon Use in Animal Diseases in China and Taiwan

CytoPharm to Conduct Animal Clinical Trials and Seek Regulatory Approval for Amarillo Biosciences' Low Dose Oral Interferon

AMARILLO, TX and TAIPEI, TAIWAN--(Marketwire - March 25, 2008) - Amarillo Biosciences, Inc. (ABI) (OTCBB: AMAR) today announced that it has entered into a license and supply agreement (Agreement) with CytoPharm, Inc., a Taipei, Taiwan-based biopharmaceutical company whose parent company is Vita Genomics, Inc., the largest biotech company and specialty Clinical Research Organization in Taiwan specializing in pharmacogenomics.

Under the terms of the Agreement, CytoPharm and its subsidiary will conduct all animal (swine, poultry, cattle) clinical trials and seek regulatory approvals in both China and Taiwan to launch ABI's low dose oral interferon for animal diseases. CytoPharm has already commenced clinical studies in which low doses of interferon are given orally to treat or prevent swine diseases. According to the Agreement, CytoPharm will make payments to ABI upon reaching certain milestones and will also pay royalties on low dose oral interferon sales in the Territory.

"With the fast growing economies and vastly improving animal health care systems in both China and Taiwan, producers' demands for newer and better drugs have become much stronger," said Dr. Ellson Chen, Chairman of CytoPharm, and founder of Vita Genomics. "Blue Ear Disease -- a highly infectious disease that has swept the Chinese swine population and driven up pork prices in China -- is a major disease in the region, and governments are spending billions of dollars and committing vast economic resources to deal with this deadly disease. This agreement with Amarillo Biosciences demonstrates CytoPharm's commitment to assist in improving the health and well-being of China's and Taiwan's animal populations."

Dr. Joseph M. Cummins, President and CEO of ABI, said, "This agreement is of major significance to ABI because our low dose oral interferon will be tested in diseases which annually impact livestock worldwide. We are especially pleased by the professionalism and diligence which CytoPharm has demonstrated in our dealings to date, and are also pleased that they share our vision that low dose oral interferon can be a therapeutic agent against a wide array of animal diseases."

Dr. Stephen T. Chen, President of STC International and an ABI Board member living in Taiwan, made the introduction of ABI to CytoPharm and was instrumental in negotiations of the Agreement. "I am very pleased to see these two fine companies collaborate on the development of low dose oral interferon. In my estimation, this product will be a huge success in the Asian marketplace," said Dr. Chen.

About Amarillo Biosciences, Inc.

Amarillo Biosciences, Inc. is a U.S. biotechnology firm operating in global partnership with the Hayashibara Group, which also holds 11% of Amarillo Biosciences shares and has provided over $18 million in loans, grants and equity investments. The Company's primary focus is extensive and ongoing R&D into the use of low dose, orally administered interferon as a treatment for a variety of conditions, including Sjogren's syndrome, Behcet's disease, and opportunistic infections in patients who are HIV positive. In its 23-year history, the Company has invested nearly $39 million to establish oral interferon as a therapeutic agent. The majority of those funds were invested in clinical trials in an effort to achieve FDA approval for interferon. Additional information is available on the web site at http://www.amarbio.com/.

About CytoPharm

CytoPharm is a closely held company focusing on the development of biopharmaceuticals for virus-infected diseases and cancers. It was founded in 2002 by Ho Tung Chemical, Vita Genomics, and banks and venture capital firms. Its product pipelines contain a series of cytokines induced by its proprietary technologies, used for hepatitis, and cancers. Currently, its product is under clinical trials in China. Both CytoPharm and Vita Genomics are affiliates of Ho Tung Chemical Inc., one of the largest petrochemical companies in Taiwan, and a publicly traded company whose 2006 revenues were approximately NTD 39 billion.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including uncertainties related to product development, uncertainties related to the need for regulatory and other government approvals, dependence on proprietary technology, uncertainty of market acceptance of oral interferon or the Company's other product candidates and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. In particular, see "Item 1. Description of Business" of the Company's Form 10-KSB for the year ended December 31, 2006.