XTL Biopharmaceuticals Initiates Phase II Clinical Study For Treatment of Chronic Hepatitis B

May 17, 2001

XTL Biopharmaceuticals Initiates Phase II Clinical Study For Treatment

of Chronic Hepatitis B

May 16, 2001

REHOVOT, Israel and NEW IPSWICH, N.H., May 16 /PRNewswire/ via NewsEdge

Corporation -

XTL Biopharmaceuticals Ltd. (London: XTL) announced today initiation of a

Phase II clinical study of XTL-001 in combination with Lamivudine for the

treatment of chronic hepatitis B virus (HBV) infection. It is anticipated

that the combination treatment using XTL-001 with antivirals will reduce the

incidence of drug resistance to current therapy.

Patients in the study will be treated with a combination of various doses of

XTL-001 or a placebo and a standard treatment regimen of Lamivudine. The

multi-center, double-blind, dose ranging study is expected to enroll 60

patients. Five dosing regimens of XTL-001 will be evaluated. Patients will

receive the combination drug therapy for up to 12 months. This initial Phase

II study is designed to gather clinical data regarding the appropriate dose

regimen in the HBV patient population for future clinical studies.

Parameters to be assessed include safety and antiviral effect.

XTL-001 consists of two high affinity human monoclonal antibodies that act

at multiple sites on the HBV surface antigen. These antibodies were

discovered and developed using XTL's Trimera system, a proprietary

technology for producing and bio-validating high-affinity, fully human

monoclonal antibodies. In a Phase I clinical study of 27 patients, various

single and multiple dosing regimens of XTL-001 without Lamivudine were well

tolerated and no serious adverse events were observed. Furthermore, there

was a rapid and consistent decrease in HBV viral levels in all patients

receiving multiple doses of XTL-001.

HBV is the most common form of hepatitis and one of the world's leading

causes of death. Current therapies used for treatment of chronic HBV

infection include interferon-alpha and Lamivudine. Although these treatments

may reduce viral load, in the majority of patients there is not a permanent

eradication of the virus. Thus new and multi-drug approaches directed to

different mechanisms are needed.

" We are very pleased to commence Phase II studies for XTL-001, " stated

Becker, Ph.D. President and Chief Executive Officer of XTL. " This

trial is in line with XTL's strategy of combining human monoclonal antibody

based therapeutics with small molecule drugs to treat infectious diseases. "

Notes:

XTL Biopharmaceuticals develops novel therapeutics to treat life-threatening

infectious diseases using fully human monoclonal antibodies and small

molecule drugs. XTL's competitive advantage lies in its ability to leverage

both its proprietary human tissue-based in vivo disease models and fully

human monoclonal antibodies to validate and develop promising drug

candidates. The Company's growing pipeline of therapies, designed to combat

chronic viral infections, drug-resistant bacteria and serious systemic

fungal infections, comprises internally developed products as well as those

being co-developed with a number of biopharmaceutical company partners. For

more information about XTL, visit the Company's web site at www.xtlbio.com .

SOURCE XTL Biopharmaceuticals

CONTACT: Dr. Becker, Chief Executive Officer, or Burgin,

Chief Financial Officer, both of XTL Biopharmaceuticals Ltd, +972-894-05134;

or Birt or Mehanna, both of Financial Dynamics,

+44-207-831-3113, for XTL; or Glenn Kazo, General Manager & Chief Business

Officer of XTL Biopharmaceuticals, Inc., 603-878-9857, or fax, 603-878-1595

Web site: http://www.xtlbio.com

May 17, 2001