Pittsburgh, Pennsylvania
November 6,  2001

Demegen, Inc. (OTC Bulletin Board: DBOT), announced today that Dow AgroSciences notified Demegen that its agreement with Demegen will be terminated over the next four to six months as provided for in the agreement. The agreement was originally with Mycogen, Inc., and subsequently applied to Dow AgroSciences through its acquisition of Mycogen. According to the terms of the agreement and subsequent addendum, Dow AgroSciences was responsible for commercializing Demegen technology for disease resistant crops and protein enhanced crops.

In fiscal 2001, Demegen received $640,000 in fees and research support from Dow AgroSciences. In fiscal 2002, per the contract, the amount is expected to be $485,000. The recently announced research agreement between Demegen and the Dow Chemical Company is not affected by this action by Dow AgroSciences. Demegen anticipates a reduction in staff as a result of the termination of the Dow AgroSciences agreement.

Richard Ekstrom, President of Demegen, said: "We are disappointed by this action by Dow AgroSciences. Especially for disease resistant crops, numerous public and private groups, domestic and international, have been impressed by this technology. Separate from Dow AgroSciences, Demegen has numerous active collaborations in a variety of crops including rice, apples, grapes, eucalyptus, lilies, pear, potato and sweet potato. Demegen is actively seeking agreements with new licensees and research collaborators who are interested in commercializing these valuable patents and genes.

"This does not effect the primary focus of the company, which continues to be the development of new pharmaceuticals to treat serious bacterial and fungal infections, including those affecting patients with cystic fibrosis, immune compromised patients such as those with HIV and cancer patients," Mr. Ekstrom said.

Demegen announced in August that it had received a $1.5 million grant to support the Company's ongoing program to design a treatment for Pseudomonas aeruginosa infections in cystic fibrosis patients. In October, Demegen announced that it had received a second grant to identify innovative antimicrobial agents to treat Burkholderia cepacia, the deadliest type of cystic fibrosis infection.

Company news release
N3934