Medgenics’ Novel Tissue Implant Approved for Two Hepatitis C Clinical Trials in Israel

Medgenics’ Novel Tissue Implant Approved for Two Hepatitis C Clinical Trials in Israel

<0> Medgenics, Inc.Dr. Andrew L. Pearlman, +972 4 902 8900orLHAAnne Marie Fields, [email protected]_IR_PRorAbchurch CommunicationsAdam Michael/Joanne Shears/Jamie Hooper+44 207 398 7719orNomura Code Securities (NOMAD & Joint Broker)Jonathan Senior/Giles Balleny, +44 207 776 1200orSVS Securities plc (Joint Broker)Alex Mattey/Ian Callaway, +44 207 638 5600 </0>

, the developer of Biopump™, a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today announced that Israel’s Ministry of Health (MOH) has approved two Phase I/II clinical trials to assess the safety and efficacy of INFRADURE™ in patients with hepatitis C. One study will evaluate previously untreated patients with genotypes 1 and 3, and the other will study genotype 1 patients who have relapsed after initially responding to prior treatments.

These are the first approved clinical studies for the use of INFRADURE, a subcutaneous autologous tissue implant developed to continuously produce interferon alpha (IFNa). INFRADURE has been designed to be used in treating hepatitis B, C, and D, as well as other diseases. The first study will have up to 16 patients with hepatitis C and is expected to start in the fourth quarter of 2012 and to last approximately 24 months. The second study is planned to commence following initial results of the first study.

The current standard of care for treating hepatitis C involves weekly injections of pegylated IFNa, given in combination with the oral drug ribavirin for all patients. In addition, genotype 1 patients receive a protease inhibitor. These weekly injections can be associated with high concentrations or spikes of IFNa and significant side effects, posing considerable problems with patient compliance with a discontinuation rate of 20-30%. These injections are the primary treatment for hepatitis D and are often used in hepatitis B, where they pose similar problems.

INFRADURE aims to solve the problem of compliance and tolerability by providing sustained levels of IFNa within the effective range for months from a single treatment. A key aim of these studies is to show that INFRADURE Biopumps can safely and continuously produce and deliver effective levels of active IFNa into patients’ circulation for a sustained period of time. The studies have a simple cohort dose-escalation design, which should help determine effective dosing of INFRADURE to achieve suppression of the hepatitis C virus. These first studies of INFRADURE in man, are intended to help develop and calibrate the method for use in the different hepatitis indications.

Nezam H. Afdhal, M.D., Chief of Hepatology, Director of Liver Center, Beth Israel Deaconess Medical Center and Professor of Medicine, Harvard School of Medicine and a member of Medgenics’ Strategic Advisory Board, stated, “This first INFRADURE study will be important not only for its use in treating hepatitis C, but more broadly will calibrate use of this novel method to offer continuous interferon therapy produced by the patient’s own tissue, for other forms of hepatitis such as B and D. The immune system is the body’s natural protection against viral infection and is a key element of treatment for various forms of hepatitis. INFRADURE aims to make the most of that natural defense by providing sustained interferon to bolster the immune system while minimizing the burdens of patient compliance and reducing side effects. INFRADURE offers hope not only in hepatitis C, but could also fulfill an unmet need for reliable interferon therapy for hepatitis D, an aggressive form of hepatitis for which IFNa is the only effective treatment. It also addresses the emerging need for a practical, time limited alternative to years of expensive oral antiviral treatments for hepatitis B, a disease which afflicts an estimated 350 million patients worldwide.”

Bruce R. Bacon, M.D., past President of the American Association for the Study of Liver Disease, a recognized global expert in hepatitis and a member of Medgenics’ Strategic Advisory Board, commented, “Many have been predicting that the use of interferon in treating hepatitis C will be replaced by direct acting oral antiviral agents (DAAs), once these show effectiveness and safety in widespread use. However, recent developments in clinical studies suggest that safety may be an issue for some DAAs and caution is recommended as we go forward in this arena. INFRADURE potentially offers a safe alternative therapy for many of these patients, and supplement to oral treatments in others.”

Hepatitis C is the third clinical indication for use of the Biopump tissue-based protein production and delivery platform, to receive clearance for clinical studies, with the first two being Chronic Kidney Disease and End Stage Renal Disease. In addition, in June 2012 FDA approved Orphan Drug Designation for INFRADURE for the treatment of hepatitis D, using INFRADURE Biopumps in a manner similar to that in hepatitis C patients. Worldwide, it is estimated there are 170 million carriers of hepatitis C, with three to four million new infections annually.

“Approval for clinical testing in a third indication underscores the versatility of our Biopump platform,” stated Andrew L. Pearlman, Ph.D., President and Chief Executive Officer of Medgenics. “Following the recent Orphan Drug Designation for INFRADURE in hepatitis D, these hepatitis C clinical studies launch our broader hepatitis clinical program. As the first clinical studies of INFRADURE, they will help us develop its use in patients. We believe this not only holds promise for the hepatitis C population, but perhaps even more importantly, will advance the development of INFRADURE to meet the unmet needs in hepatitis D and emerging needs hepatitis B – the largest hepatitis patient population.”

Medgenics is developing and commercializing Biopump™, a proprietary tissue-based platform technology for the sustained production and delivery of therapeutic proteins using the patient's own tissue for the treatment of a range of chronic diseases including anemia, hepatitis and hemophilia, among others. Medgenics believes this approach has multiple benefits compared with current treatments, which include regular and costly injections of therapeutic proteins.

Medgenics has three long-acting protein therapy products in development based on this technology:

Medgenics is focused on the development and manufacturing of its innovative Biopumps, aiming to bring them to market via strategic partnerships with major pharmaceutical and/or medical device companies.

In addition to treatments for anemia, hepatitis and hemophilia, Medgenics plans to develop and/or out-license a pipeline of future Biopump products targeting the large and rapidly growing global protein therapy market, which is forecast to reach $132 billion in 2013. Other potential applications for Biopumps include multiple sclerosis, arthritis, pediatric growth hormone deficiency, obesity and diabetes.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995, which include all statements other than statements of historical fact, including (without limitation) those regarding the Company's financial position, its development and business strategy, its product candidates and the plans and objectives of management for future operations. The Company intends that such forward-looking statements be subject to the safe harbors created by such laws. Forward-looking statements are sometimes identified by their use of the terms and phrases such as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning, "expect," "believe," "will," "will likely," "should," "could," "would," "may" or the negative of such terms and other comparable terminology. All such forward-looking statements are based on current expectations and are subject to risks and uncertainties. Should any of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may differ materially from those included within these forward-looking statements. Accordingly, no undue reliance should be placed on these forward-looking statements, which speak only as of the date made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements contained in this release may not occur.