Canadian biotechnology company shortens clinical timelines by eliminating duplicative insulin trials

SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company developing a broad pipeline of protein-based
pharmaceuticals and non-pharmaceutical products, today provided an update on the expected regulatory strategy for the Company's plant-produced insulin after a recent meeting with the U.S. Food and Drug Administration (FDA). The preparatory meeting for the Company's Investigational New Drug Application (IND) for plant-produced insulin was scheduled as part of the normal development process. SemBioSys approached the FDA to confirm the viability of submitting plant-produced insulin under Section 505(b)(2) of the Food, Drug, and Cosmetic Act in order to achieve approval for a New Drug Application.

"Based on the discussions with the FDA and the agreed upon minutes from the meeting we will continue to pursue a 505(b)(2) regulatory path for our plant-produced insulin," said Andrew Baum, President and CEO of SemBioSys
Genetics Inc. "When we completed our initial public offering in 2004, the regulatory path for follow-on proteins remained relatively uncertain. Insulin is a comparatively simple protein for which an extensive amount of clinical
data on safety and efficacy already exists. Providing that our plant-produced insulin is sufficiently pure and clinically equivalent to commercially available insulin, the meeting confirmed the 505(b)(2) regulatory approach is
an appropriate path for approval. During our discussion with the Agency we also established that there were no issues precluding the use of safflower as a production vehicle. Now that the regulatory path for our safflower-produced insulin candidate is established, another element of risk has been removed from our development plan."

In July 2006, SemBioSys exceeded its targeted levels of insulin expression in safflower, the Company's commercial crop system, by achieving 1.2 percent insulin accumulation of total seed protein. In November, the
Company announced that it had executed a preclinical and early stage clinical manufacturing supply agreement with Cangene Corporation. SemBioSys expects to receive in vivo and in vitro biochemical and functional equivalence results comparing insulin produced from safflower to commercial insulin products early in 2007. The biochemical and functional equivalence results together with additional preclinical work underway will form the basis of SemBioSys' IND which it expects to submit to the FDA in the fourth quarter of 2007. SemBioSys
intends to initiate a Phase II trial of safflower-produced insulin in late 2007 or early 2008 with pharmacokinetics and pharmacodynamics as the primary endpoints.

Demand for insulin for the treatment of diabetes reached an estimated 5,500 kilograms in 2005 and is projected to increase to 16,000 kilograms by 2012. SemBioSys believes its safflower-produced insulin can reduce capital costs compared to existing insulin manufacturing by 70% and product costs by 40% or more. In addition, because of the ease in scaling-up crop acreage, plant-produced insulin offers significant improvements in the flexibility and speed of scale-up.

About 505(b)(2) Application
An application submitted under section 505(b)(2) of the Food, Drug, and Cosmetic Act comprises an application for approval for a drug for which one or more of the investigations relied on by the applicant were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the sponsor applicant by or for whom the investigations were conducted. The 505(b)(2) pathway is intended to encourage innovation in drug development without requiring duplicative studies to demonstrate what is already known about a drug while protecting the patent and exclusivity rights for the approved drug. Eliminating the need to conduct certain duplicative clinical studies can reduce the number of clinical studies, number of human patients and/or clinical timelines in comparison to the clinical program required. An example of a 505(b)(2) is a naturally derived or recombinant active ingredient application for a drug product containing an active ingredient(s) derived from animal or botanical sources or recombinant technology where clinical investigations are necessary to show that the active ingredient is the same as an active ingredient in a listed drug.

Calgary, Alberta-based SemBioSys Genetics Inc. is a biotechnology company focused on the development, commercialization and production of biopharmaceuticals and non-pharmaceutical products based on its plant genetic engineering skills and proprietary oilbody-oleosin technology platform - the Stratosome(TM) Biologics System. Its two lead pharmaceutical product candidates are insulin and a developmental stage cardiovascular drug called Apo AI. It also has a series of non-pharmaceutical products addressing animal and aquaculture health, nutritional oils and human topical markets.