Oxygen Biotherapeutics’ Update on U.S. Army-Funded Preclinical Studies Designed to Support the Safety Profile of Oxycyte PFC

  Oxygen Biotherapeutics’ Update on U.S. Army-Funded Preclinical Studies
  Designed to Support the Safety Profile of Oxycyte PFC Emulsion Currently in
  Clinical Trials Overseas for Traumatic Brain Injury

Business Wire

MORRISVILLE, N.C. -- October 25, 2012

Oxygen Biotherapeutics, Inc. (“OBI”) (NASDAQ: OXBT), a development stage
biomedical company currently focused on developing its proprietary
perfluorocarbon-based intravenous emulsion, Oxycyte^®, as a treatment for a
variety of emergent ischemic conditions, today reported that the U.S.
Army-funded preclinical program that was established to address the U.S. Food
and Drug Administration (FDA) questions regarding the product, is well
underway with several important milestones complete or nearing completion.
Perfluorocarbon emulsions as a class have been shown to cause transient
thrombocytopenia in animals and humans and, because of emulsion particle
clearance mechanisms, have raised questions regarding their potential impact
on normal immune system function. To continue the clinical development of
Oxycyte in the United States, the FDA has requested studies to explore in
detail the safety profile of Oxycyte with respect to these putative effects.
With this preclinical work, OBI has moved several steps closer to addressing
the questions posed by the FDA regarding thrombocytopenia, platelet function,
and immunocompetence.

Clinical studies of Oxycyte in TBI patients, placed on-hold by the FDA, are
being conducted outside the United States. The second cohort of a global Phase
IIB study will be launched by the end of the year. Data from the preclinical
program may support data collected in patients and provide the company with a
regulatory path forward in the United States. Regardless, however, the company
is advancing its strategy to allow for licensing the product in any number of
countries. If successful, Oxycyte could become an essential element of
emergency care for TBI patients by providing fast and effective delivery of
oxygen to the brain.

“The majority of the first year of this preclinical program was spent engaging
contract research organizations, developing and finalizing study designs and
protocols, procuring reviews and approvals from the FDA and Department of
Defense for changes to the originally planned studies. In addition, a number
of highly technical bioanalytical methods and animal models had to be
developed. We are pleased to announce that most of the studies under the
program are underway, and we are beginning to review data from recently
completed studies,” said Michael Jebsen, President and Chief Executive
Officer. “The successful validation of GLP GC/MS bioanalytical methods and the
completion of the PK studies was a critical first step to evaluating and
interpreting the data generated from the platelet and immune models currently
underway.”

Platelet & Thrombocytopenia Studies

Severe TBI is known to cause a significant drop in platelet counts as the body
responds to injury. In both animals and humans, administration of Oxycyte has
been shown to produce a transient thrombocytopenia. Therefore, the risk of
re-bleeding in TBI patients due to this treatment-emergent thrombocytopenia is
a concern to the FDA.

OBI recently completed in vitro tests with healthy human blood combined with
Oxycyte to determine if Oxycyte alters platelet activation, aggregation or
adhesion. These studies will be repeated to evaluate the in vitro effects of
Oxycyte on platelet function in blood collected from individuals who have
suffered traumatic brain injury.

As noted above, in vitro studies have been completed examining the effects of
Oxycyte on platelet function in blood collected from normal, healthy
volunteers. The main findings from these in vitro assays show that in normal
blood:

1. Oxycyte does not result in direct platelet activation as measured by
changes in platelet surface activated glycoprotein (“GP”) IIb-IIIa, platelet
surface P-selectin, monocyte-platelet aggregates, neutrophil-platelet
aggregates, platelet-derived procoagulant particles, or whole blood platelet
aggregation;

2. Oxycyte at high concentrations (3 to 6 times the clinically expected
maximum blood levels) does result in changes to platelet response to
activation indicated by a decrease in thrombin receptor activating peptide
(TRAP)-stimulated platelet aggregation, a decreased TRAP-stimulated platelet
surface P-selectin expression, and a decrease in TRAP-stimulated
neutrophil-platelet aggregates.

3. Oxycyte does not affect nitric oxide inhibition of platelet activation; and
finally,

4. Oxycyte does not result in changes in platelet response to activation as
measured by shear-dependent platelet adhesion to Von Willebrand Factor, a
blood glycoprotein involved in hemostasis.

Immunocompetence Update

Over the past year, OBI has collaborated with an immunology consultant to
develop a thorough preclinical immunocompetency plan to determine if Oxycyte
adversely affects bacterial opsonization and immune competence to an
infectious challenge. Following FDA’s approval of the study design and
protocols, we have four studies underway to assess the impact of Oxycyte on
the overall health of the immune system, bacterial opsonization and phagocytic
activity, innate immunity, and its effect on the primary immune response cells
of the liver and spleen. The models included in the studies are an influenza
host resistance model, a Streptococcal host resistance model, and a Listeria
host resistance model.

Two other preclinical tasks that are part of this U.S. Army-funded program
will assess the effects of Oxycyte on  platelet distribution, thrombosis and
hemostasis in a primate model of acute systemic inflammation and assess the
effects of Oxycyte on  the efficacy of platelet transfusion in the treatment
of thrombocytopenia in a rat model of intracranial hemorrhage (ICH). The
development of the ICH model is nearing completion with the definitive study
expected to begin in early 2013. Data will be collected in the primate study
using imaging techniques (gamma scintigraphy and MRI). The protocol is
currently being reviewed by the Animal Care and Use Review Office (ACURO).
ACURO oversees and implements the Army’s animal use and care policies. The
first phase of this work is scheduled to begin in November.

“Overseeing this very important research program for the last year has been
very rewarding as this work is going to expand significantly the body of
knowledge regarding the safety of Oxycyte, as well as PFCs as a therapeutic
class,” said Stephanie Anderson, Director of Preclinical Research and
Development at OBI. “With a clearer understanding of the actual significance
of the biological effects of Oxycyte, this product could become an important
option for medical professionals caring for traumatic brain injury patients or
other patients who suffer acute ischemic events that deprive their tissues of
oxygen.”

Currently in its sixth quarter, the two year program is scheduled to be
completed by mid-2013. It is funded by a $2.1 million U.S. Army reimbursement
grant.

About Oxycyte

Oxycyte is an odorless, milky white emulsion consisting of a perfluorocarbon,
disodium, water, egg yolk phospholipids and a few other ingredients in very
small amounts. It is a sterile, non-pyrogenic emulsion consisting of submicron
particles (medium diameter 200-250 nanometers) of
perfluoro(t-butylcyclohexane), in an aqueous medium that is slightly
hypertonic and mildly buffered to a neutral pH range. It must be formulated in
an aqueous emulsion for intravenous administration. Research has shown that
PFCs can dissolve and release large amounts of gases, including the blood
gases oxygen and carbon dioxide without binding at high concentrations of
inspired oxygen.

About Oxygen Biotherapeutics, Inc.

Oxygen Biotherapeutics, Inc. is developing medical products that efficiently
deliver oxygen to tissues in the body. The company has developed a proprietary
perfluorocarbon (PFC) therapeutic oxygen carrier called Oxycyte^® that is
currently in clinical and preclinical studies for intravenous delivery for
indications such as traumatic brain injury, decompression sickness and stroke.
The company is also developing PFC-based creams and gels for topical delivery
to the skin for dermatologic conditions and potentially wound care. In
addition, the Company has commercialized its Dermacyte^® line of skin care
cosmetics for the anti-aging market.

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements by the company
that involve risks and uncertainties and reflect the company’s judgment as of
the date of this release. The forward-looking statements are subject to a
number of risks and uncertainties including matters beyond the company’s
control that could lead to delays in new product introductions and customer
acceptance of these new products, and other risks and uncertainties as
described in our filings with the Securities and Exchange Commission,
including in the current Form 10-Q filed on September 19, 2012, and our annual
report on Form 10-K filed on July 24, 2012, as well as other filings with the
SEC. The company disclaims any intent or obligation to update these
forward-looking statements beyond the date of this release. This caution is
made under the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995.

Contact:

Oxygen Biotherapeutics, Inc.
Ellen Corliss, 919-855-2112
SVP, Investor Relations &
Corporate Communications
 
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