Kane Biotech Inc.

Kane Biotech Inc.
Harland Medical Systems, Inc.

April 18, 2007 08:51 ET

Kane Biotech and Harland Medical Systems Announce Commercial License Agreement

Harland to integrate KBI-5898 antimicrobial technology with its surface coating technology to create value-added medical devices for $13 billion global catheter market

WINNIPEG, MANITOBA--(CCNMatthews - April 18, 2007) - Kane Biotech Inc. (TSX VENTURE:KNE), a biotechnology company engaged in the development of products that prevent and disperse bacterial biofilms, and Harland Medical Systems, Inc., a leader in medical device coating processes and applications, are pleased to announce that they have entered into a global commercial license agreement.

The agreement provides Harland with world-wide rights to Kane's KBI-5898 antimicrobial technology for use in coatings for urinary, venous access and veterinary catheters. Under the terms of the agreement, Harland will pay Kane a royalty on net sales of products which incorporate the proprietary agent. The financial terms of the agreement are not disclosed.

"The coated medical device market is growing rapidly as healthcare customers recognize the importance of active coatings in reducing hospital acquired infection rates and therefore cutting medical costs and patient morbidity," commented Jon Anderson, Chief Executive Officer of Harland Medical Systems. "This license agreement is a key step in our goal of continuing to build an integrated coating services company and provides us with a tremendous technology for controlling medical device related infections."

"Harland is a great partner with a broad customer base and excellent capabilities in the medical device field and this agreement is an important step in our goal to turn our research capabilities into commercial products" stated Gord Froehlich, President of Kane Biotech. "We have received considerable interest in our technology since research clearly demonstrated the superiority of catheters coated with KBI-5898 when compared to the market standard coated and uncoated catheters."

The agreement blends Harland's experience in automation system design, medical device manufacturing and surface modification applications with Kane's expertise in antimicrobial and antibiofilm agents. This combination provides Harland a unique value-added solution for its customers as KBI-5898 offers broad spectrum protection against medical device related hospital acquired infections such as urinary tract infections and blood stream infections.

In the US alone, more than 150 million intravascular catheters are used and over 5 million central venous lines are inserted. This results in about 250,000 catheter related infections each year at an estimated cost of $25,000 per episode.

In addition, approximately 20 million urethral catheters are sold in the US annually and indwelling urinary catheters are used in about 15-25% of short term care patients and all patients in intensive care units. Catheter associated urinary tract infections account for approximately 40% of all hospital-acquired infections at an estimated cost of $850 to $4700 per infection. Currently less than 35% of urinary catheters are protected with antimicrobial coatings.

About Harland Medical Systems

Harland Medical Systems is a privately-held company headquartered in Eden Prairie, Minnesota. Harland's business includes providing automated coating application and test equipment, process development, coating services and materials to medical device manufacturers. Harland provides medical device manufacturers with a total solution for their medical device coating programs, enabling them to quickly move from the lab to production. More information about Harland can be found at www.harlandmedical.com.

About Kane Biotech Inc.

Kane Biotech is a biotechnology company engaged in the development of products to prevent and disperse bacterial biofilms. Biofilms develop when bacteria, and other microorganisms, form a protective matrix that acts as a shield against attack. When in a biofilm, bacteria become highly resistant to antibiotics, biocides, disinfectants, high temperatures and host immune responses. This resiliency contributes to human health problems such as recurrent urinary tract infections, medical device associated infections and tooth decay.

Caution Regarding Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable Canadian provincial securities legislation (collectively, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, our anticipated future operating results, and can, in some cases, be identified by the use of words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

These statements reflect management's current beliefs and are based on information currently available to management. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: Kane's early stage of development, lack of product revenues and history of operating losses, uncertainties related to clinical trials and product development, rapid technological change, uncertainties related to forecasts, competition, potential product liability, additional financing requirements and access to capital, unproven markets, supply of raw materials, income tax matters, management of growth, partnerships for development and commercialization of technology, effects of insurers' willingness to pay for products, system failures, dependence on key personnel, foreign currency risk, risks related to regulatory matters and risks related to intellectual property and other risks detailed from time to time in Kane's filings with Canadian securities regulatory authorities, as well as Kane's ability to anticipate and manage the risks associated with the foregoing. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this news release, as well as under the heading "Risk Factors" contained in Kane's final long-form prospectus dated March 12, 2007. Kane cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on Kane's forward-looking statements to make decisions with respect to Kane, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

These risks and uncertainties should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, Kane cannot provide assurance that actual results will be consistent with these forward-looking statements. Kane undertakes no obligation to update or revise any forward-looking statement.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information