Oxygen Biotherapeutics Provides a Business Review and Update in Conjunction with Filing of Second Quarter Fiscal Year 2014

  Oxygen Biotherapeutics Provides a Business Review and Update in Conjunction
  with Filing of Second Quarter Fiscal Year 2014 Financials

Business Wire

MORRISVILLE, N.C. -- December 19, 2013

Oxygen Biotherapeutics, Inc.,(“OBI”) (NASDAQ: OXBT) a specialty pharmaceutical
company focused on developing and commercializing a portfolio of products for
the critical care market, today announced that it has filed its Quarterly
Report on Form 10-Q for its second quarter fiscal year (FY) 2014 ended October
31, 2013. In connection with that filing, the company is providing a review of
recent achievements and an update on business operations and future
milestones.

As reported on November the 14^th, 2013, Oxygen completed its acquisition of
certain assets of Phyxius Pharma Inc. (Phyxius Pharma), a privately-held
biopharmaceutical company focused on the development and near-term
commercialization of levosimendan to prevent and treat cardiac surgery
patients at risk for developing low cardiac output syndrome (LCOS), a
significant unmet medical need. This acquisition allowed Oxygen
Biotherapeutics to acquire the exclusive rights to develop and commercialize
levosimendan in North America. John Kelley, CEO and Co-Founder of Phyxius
Pharma, joined Oxygen Biotherapeutics as the CEO, along with two other senior
executives from Phyxius that also joined the senior management team.

Levosimendan was discovered and developed by Orion Pharma, Orion Corporation
of Espoo Finland. Levosimendan is a calcium sensitizer developed for
intra-venous use in hospitalized patients with acutely decompensated heart
failure. It is currently approved in over 50 countries for this indication and
not available in the United States. It is under development in North America
for reduction in morbidity and mortality of cardiac surgery patients at risk
of low cardiac output syndrome (LCOS). The acquisition brings to Oxygen
Biotherapeutics not only the exclusive rights in North America to develop and
commercialize levosimendan for the specific indication of prevention and
treatment of LCOS, but also the FDA’s approval of Fast Track status for a
Phase 3 trial, and the FDA’s SPA which represents agreement with the Phase III
clinical trial’s study protocol. The FDA has provided guidance that a single
successful trial will be sufficient to support approval of levosimendan in
this indication.

On December 11, 2013 Oxygen Biotherapeutics announced that it had selected
Duke University’s Duke Clinical Research Institute, (DCRI) to conduct the
Phase 3 trial of the levosimendan.DCRI is the world’s largest academic
clinical research organization, with substantial experience in conducting
cardiac surgery trials.The Phase 3 trial will be conducted in approximately
50 major cardiac surgery centers in North America. The trial will enroll
patients undergoing coronary artery bypass graphs (CABG) and/or mitral valve
surgery who are at risk for developing LCOS. The trial will be a double blind,
randomized, placebo controlled study seeking to enroll 760 patients. It is
expected that enrollment will begin in the third quarter of 2014, and will
take approximately 18 months to complete. The protocol of the Phase 3 trial
has been submitted to ClinicalTrials.gov and should be available for review in
the next few days.

It was earlier announced that researchers at the DCRI recently published
findings of a meta-analysis of multiple clinical trials that evaluated the use
of levosimendan in patients undergoing heart surgery. The study aggregated and
analyzed results from 14 independent clinical trials with a total of 1,155
patients. The published results showed that levosimendan was associated with
reduced mortality and other adverse outcomes including heart attacks during
and after operation in patients with reduced heart function undergoing heart
surgery.

John Kelley, CEO of Oxygen Biotherapeutics, stated, "These findings are highly
supportive of our approved Phase 3 trial design which includes mortality, need
for dialysis and peri-operative myocardial infarction, as components of the
primary composite endpoint. With the support of these data and the FDA’s
guidance, we have designed a very modest sized and cost efficient trial of 760
patients. This is far smaller than other cardiac trials which typically
require larger patient populations.”

In August 2013, OBI converted $4.6 million in outstanding principal amount of
a convertible promissory note into 4,600 shares of Series D Convertible
Preferred Stock. The note, which was scheduled to mature on July 1, 2014,
carried an interest rate of 15% per annum. This transaction reduced OBI’s debt
from $4.9 million to $300,000 and increased net shareholder equity by
approximately $3.5 million.

At October 31, 2013, OBI had $2.5 million in cash compared to $0.8 million at
October 31, 2012. Through the six months ended October 31, 2013, net cash used
in operations was $3.58 million, compared to $2.74 million in the comparable
period of 2012. This increase is due primarily to additional research and
development costs associated with the Oxycyte Phase II-b clinical trials and
the legal fees associated with the acquisition of Phyxius Pharma Inc.’s
assets.

In November 2013, OBI received approximately $6.2 million through the exercise
of 2,377,297 warrants. These warrants were issued by the Company in connection
with its July 2013 Series C 8% Convertible Preferred Stock financing. The
exercise of these warrants combined with our working capital at October 31,
2013 is sufficient to fund our operations through June 30, 2014.

“Oxygen Biotherapeutics, Inc has made tremendous progress in 2013” said John
Kelley, CEO. “The acquisition of the Phyxius Pharma assets was a
transformative deal for this company. We now have the opportunity to build a
company with a portfolio of assets focused on the critical care market. We
look forward to an exciting 2014 with significant accomplishments ahead.

Anticipated 2014 Milestones

  *Enroll first patient in the Phase 3 trial for levosimendan in cardiac
    surgery patients at risk for developing LCOS in July 2014.
  *Completion of Army-funded preclinical safety studies for Oxycyte in the
    2^nd quarter of 2014.
  *Completion of the second cohort of patient enrollment in the phase II-b
    clinical trial for traumatic brain injury (TBI) in the 3^rd quarter of
    2014.

About Oxygen Biotherapeutics

Oxygen Biotherapeutics, Inc. is developing medical products for the acute care
market. The company recently acquired the North American rights to develop and
commercialize levosimendan. The United States Food and Drug Administration
(FDA) has granted Fast Track status for levosimendan for the reduction of
morbidity and mortality in cardiac surgery patients at risk for developing Low
Cardiac Output Syndrome (LCOS). In addition, the FDA has agreed to a Phase 3
protocol design under Special Protocol Assessment (SPA), and provided guidance
that a single successful trial will be sufficient to support approval of
levosimendan in this indication. The company also 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.

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, but not limited to, the
finalization of definitive agreements with DCRI, matters beyond the company's
control that could lead to delays in the clinical study, delays in new product
introductions and customer acceptance of these new products, and other risks
and uncertainties as described in the company’s filings with the Securities
and Exchange Commission, including in its quarterly report on Form 10-Q filed
on September 17, 2013, and annual report on Form 10-K filed on June 26, 2013,
as well as its other filings with the SEC. The company disclaims any intent or
obligation to update these forward-looking statements beyond the date of this
release. Statements in this press release regarding management’s future
expectations, beliefs, goals, plans or prospects constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995.

Contact:

IRTH Communications
Robert Haag, 1-866-976-4784
oxbt@irthcommunications.com
 
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