SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company developing a broad pipeline of protein-based pharmaceuticals and non-pharmaceutical products, today announced that its proprietary plant-produced insulin has been demonstrated in animal models to be chemically, structurally and functionally equivalent to U.S. pharma grade human insulin. The results of analytical, in vitro and in vivo assays confirm that insulin produced in safflower, SemBioSys’ commercial crop, is indistinguishable from human insulin analytically and physiologically.

“Establishing insulin equivalence is the second major scientific milestone from our insulin program in the past six months. By exceeding our commercial target levels of human insulin accumulation in safflower last July and now confirming that safflower-produced insulin is physiologically equivalent to human insulin we believe we have substantially lowered the scientific risk of our insulin program,” said Andrew Baum, President and CEO. “As a result of these achievements we expect that we will be able to submit an Investigational New Drug Application (IND) later this year and initiate a Pharmacokinetic/Pharmacodynamic study of safflower-produced insulin late in the fourth quarter of 2007 or early in the first quarter of 2008, leading to an end of Phase II meeting with the FDA in 2008.”

SemBioSys has confirmed the equivalence of safflower-produced insulin through analytical, in vitro, and in vivo animal assays. Chemical and structural authenticity have been confirmed through mass spectrometry and peptide fingerprint analysis. Functionality of safflower-produced insulin has been demonstrated using in vitro receptor phosphorylation assays, confirming biological activity in human cells. Finally, SemBioSys has demonstrated functional equivalence through conducting insulin tolerance testing in mice, which monitors blood glucose levels as the assay variable, confirming that there is no statistically significant difference in the pharmacodynamic response of safflower-produced insulin in comparison to Eli Lilly’s Humulin® and U.S.P. insulin treatments.

“The equivalence results demonstrate that we have done what we said we were going to do, when we said we would do it, which continues to build our confidence in the insulin program. With the achievement of commercial levels of insulin accumulation in safflower and confirmation of equivalence, our ability to execute continues to be critically important, however, the overall insulin program risk has now been significantly reduced. Insulin is a well-characterized compound for which a great deal of data already exists. With these high-risk scientific achievements behind us, we now transition to the execution stage of our clinical development plan for insulin,” said Mr. Baum.

The results from the equivalence testing are the most recent achievement in a series of four significant milestones events for the insulin program. In July 2006, SemBioSys exceeded its target level of insulin accumulation in safflower. In November, SemBioSys signed an agreement with Cangene Corporation to purify safflower-produced insulin from SemBioSys’ seed lines under cGMP for clinical trials. Finally, earlier this month SemBioSys announced that after meeting with the U.S. Food and Drug Administration (FDA) it would proceed with an abbreviated regulatory path for safflower-produced insulin under a 505(b)(2) application. The Company expects to be in a position to submit an IND to the FDA in the second half of 2007 and to initiate a PK/PD bioequivalence study in late 2007 or early 2008 to be followed by a Phase III study in support of an NDA.

Demand for insulin for the treatment of diabetes reached an estimated 5,000 to 6,000 kilograms in 2005 and is projected to increase to 16,000 kilograms by 2012. Demand for insulin is expected to grow due to a number of issues including; earlier diagnosis of diabetes; increased diabetes incidence in the developed world due to demographic trends, as well as consumption and behavioural habits; increasing incidence in the developing world due to increasing affluence and changing dietary habits; new alternative delivery methods that require between five and ten times the amount of insulin as injection methods; and the use of insulin as a treatment for type 2 diabetes patients earlier in the treatment protocol as recommended by the consensus statement from the American Diabetes Association and the European Association for the Study of Diabetes.

SemBioSys believes its safflower-produced insulin can reduce capital costs compared to existing insulin manufacturing by up to 70% and product costs by 40% or more. Insulin currently produced using fermentation is estimated to require $200 to $250 million in capital investment for 1,000 kilograms of production capacity. 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. SemBioSys has five years of experience growing transgenic safflower in Canada, the U.S., Mexico and Chile under permits issued by the pertinent regulatory authorities.

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™ 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.