Release issued 8th July 2002

"We are very excited about initiating clinical development for a compound we believe has great potential in the treatment of Type 2 diabetes," said Duffy DuFresne, the President and CEO of ConjuChem. "We anticipate being able to report data from this study, including preliminary data on efficacy, by the end of this year. We expect these results will serve as further validation of the potential of our DAC(TM) Technology platform to create improved new drugs from existing compounds, particularly therapeutic peptides."

Clinical Trial Design The study will be conducted in two parts; the first in healthy volunteers and the second in Type 2 diabetic patients. The first part of the study will evaluate the safety, tolerability and pharmacokinetics of single, ascending doses of CJC-1131 and to establish the dose to be considered as the maximum tolerated dose (MTD) in healthy volunteers. The second part of the study will evaluate safety, tolerability, pharmacokinetics, and MTD of single, ascending doses of CJC-1131 in patients with stable Type 2 diabetes and will obtain preliminarily pharmacodynamic and efficacy data for CJC-1131 as compared to placebo in these patients.

Both parts of the study involve the subcutaneous administration of randomized, placebo-controlled, ascending single doses of CJC-1131. The first part of the safety and tolerance study in healthy volunteers will be conducted in sequential dosing groups of 6 subjects each (randomly assigned 5:1 to receive active drug or placebo) with a study maximum of eight such groups, followed by one group of 10 subjects administered the MTD (randomly assigned 8:2). It is anticipated that all subjects at each dose group will be dosed on the same day with dosing of the next group to occur one week later. Initiation of the second part of the study in stable, Type 2 diabetes patients who have been washed out of any diabetes medications will lag the initiation of the first part of the study by several weeks. This part of the study allows for a maximum of five sequential dosing groups of 8 patients each (randomly assigned 6:2), followed by one group of 12 patients administered the MTD (randomly assigned 10:2).

"This is a robust Phase I study, with an enrolment potential of 110 people, including 52 diabetic patients," said Dr. Jean-Paul Castaigne, Vice-President, Development & Chief Scientific Officer of ConjuChem. "As a result, the study's data will provide significant insight into the compound's therapeutic potential and assist in the design of later-stage trials."

Healthy volunteers and patients will enter the clinic 60 hours before dosing, will remain in the clinic on a controlled diet for up to one week following dosing, and will be monitored for a total period of 30 days post dosing. In addition to evaluations of safety parameters and pharmacokinetic assessments of blood levels of the drug, preliminary assessments of efficacy parameters will include monitoring of blood levels for glucose, insulin, C-peptide, glucagon, fructosamine and haemoglobinA1C. Food intake, satiety, and gastric emptying will also be monitored. The study is being conducted at a site in Holland.

About GLP-1 GLP-1, the body's most potent insulinotropic hormone, is a naturally occurring 30 amino acid peptide. GLP-1 and GLP-1 analogues (administered by injection) have been shown to aid in the maintenance of normal blood glucose levels by a) enhancing glucose dependent insulin synthesis and secretion in the pancreas, b) increasing peripheral tissue uptake of glucose and reducing peripheral insulin resistance, c) lowering post-prandial blood glucose "peaks" by slowing down gastric emptying, d) decreasing glucagon secretion and hepatic glucose production, and e) acting as a natural growth factor on the insulin producing cells in the pancreas, causing them to grow and proliferate. Moreover, GLP-1 and GLP-1 analogues appear to have a very attractive safety and side-effect profile as compared to existing diabetes medications. Because GLP-1 only stimulates insulin release and decreases glucagon secretion in the presence of higher than normal glucose levels, it is expected to have very little of the potential to induce life-threatening hypoglycaemia seen with many current diabetes drugs. GLP-1 and related analogues have also been shown to have a positive effect on lipid profiles of Type 2 diabetic patients (diabetic patients are at much higher risk for cardiovascular disease), and some studies indicate GLP-1 therapy promotes moderate weight loss (many diabetes drugs can cause weight gain). For all the reasons mentioned above, GLP-1 like activity would be an extremely attractive approach for treatment of Type 2 diabetes. However, the serum half-life of native GLP-1 is only about 5 minutes. GLP-1 is simultaneously degraded by serum enzymes and cleared through renal excretion.

About DAC:GLP-1 (CJC-1131) DAC:GLP-1(TM) was created using ConjuChem's DAC(TM) Technology to "engineer" an analogue of GLP-1 into a drug construct (CJC-1131). CJC-1131 is designed to be administered by subcutaneous injection and then rapidly and selectively bond in-vivo (inside the body) to albumin. The bioconjugate thus formed has the same therapeutic activity and similar potency as compared to native GLP-1 but has a pharmacokinetic profile (duration of activity) in animals closer to that of albumin, a protein that has a half-life in man of about 2 to 3 weeks. Based on animal data for CJC-1131 and human data for other DACTM compounds, ConjuChem anticipates the optimal dosing regime for DAC:GLP-1TM in humans will be no more frequent than once per week.

About ConjuChem Inc. ConjuChem Inc. is developing long-acting therapeutic compounds based on two novel product enabling platform technologies for in vivo bioconjugation. When applied to existing drugs, the Company's local and systemic DAC(TM) technology platforms enable the rapid creation of new drugs with significantly enhanced therapeutic properties as compared to the original drug compounds. Since the new drugs have biological activities that are patterned after existing drugs, these compounds can usually be developed more quickly, less expensively and at lower risk than most new chemical entities. The Company's platform technologies are focused on various therapeutic areas including oncology, pain, anti-virals, diabetes and thrombosis. ConjuChem has numerous early-stage research collaborations with a number of pharmaceutical and biotechnology companies.

Detailed descriptions of the Company, DAC(TM) technology and ConjuChem's product pipeline can be viewed on the Company's web page www.conjuchem.com.

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