ABI Outlines $5 Million Capital Raising Program to Complete Regulatory Approval of Oral Interferon

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ABI Outlines $5 Million Capital Raising Program to Complete Regulatory Approval of Oral Interferon

Sep 26 2006, 10:40 AM EST

MARKETWIRE

Sep 26, 2006 AMARILLO, TX MARKET WIRE

Amarillo Biosciences, Inc. (ABI) (OTCBB: AMAR), today announced that it has commenced an effort to raise up to $5 Million to complete clinical studies of its low-dose oral interferon. Successful completion of these studies is necessary for ABI to apply for FDA approval.

Two Phase II studies are being conducted through 2007, a U.S.-based oral warts study in HIV+ patients and an Istanbul-based study on Behcet's disease. The oral warts study is estimated to cost ABI approximately $500,000 and is expected to be completed by late 2007. The Bechet's disease study is being largely funded by ABI's Turkish partner, NOBEL ILAC and is expected to be completed by late 2007. The balance of the up to $5 Million that ABI intends to raise will fund Phase III trials in 2008, which will be necessary to make an application to FDA for approval.

To date in 2006, ABI has raised approximately $1.5 million in long-term equity financing, primarily from European institutional and high net worth investors. The Company continues to receive interest for long-term equity financing from a number of European and U.S. investors and intends to access this source of financing. In addition, ABI has recently retained a prominent Texas law firm to assist it in obtaining $5-$10 million in public-sector financing to fund a large-scale human clinical influenza study in 2007. Animal data generated in ABI-sponsored research suggests that oral interferon reduces the amount of influenza virus in the respiratory tract. These positive influenza data from animals, and published human data generated by others, prompted the Company to seek public sector funding for a large-scale human influenza study.

Behcet's Disease and Oral Warts Studies

A total of 36 patients with Behcet's disease have been enrolled in ABI's Phase II clinical trial in Turkey with the goal of enrolling 90 patients by the end of the first quarter of 2006. Six clinical sites have agreed to participate in ABI's Phase II clinical trial of oral interferon to treat oral warts in 80 HIV+ patients. The sites are in Baltimore, Boston, Chicago, Dallas, New York City and San Francisco. Enrollment is expected to begin in October 2006.

Dr. Manfred Beilharz Presents in Shanghai

Last week, Manfred Beilharz, Head of the Nobel Prize-winning Department of Microbiology and Immunology, School of Biomedical, Biomolecular and Chemical Sciences, the University of Western Australia, presented data on his influenza studies at an international biotechnology meeting in Shanghai, China. Funding from ABI allowed Dr. Beilharz to discover that low-dose oral interferon protected mice against an otherwise fatal challenge of influenza virus. Dr. Beilharz's animal model is the same one used by U.S. government officials to test and evaluate immune modulators against influenza virus that might be useful in an influenza pandemic.

ABI seeks Government Funding for Chronic Chough Study

ABI has noted that low-dose oral interferon relieves chronic coughing in patients with Sjogren's syndrome and idiopathic pulmonary fibrosis (IPF). Moreover, ABI has published that horses with chronic obstructive pulmonary disease, or COPD, also called inflammatory airway disease, are significantly improved with low doses of oral interferon. ABI is seeking funding to treat chronic coughing in human COPD patients with oral interferon. COPD is reported to affect 10% of humans over the age of 40. Because COPD affects many millions of people and is not an Orphan Disease (a disease that affects fewer than 200,000 people in the U.S.), the study of COPD is too expensive for ABI to study beyond Phase II without a pharmaceutical partner. Initially, ABI is seeking a state government grant of $750,000 to conduct the Phase II clinical trial on 80 patients with chronic cough due to COPD or IPF. If the clinical data are as positive as expected, these Phase II data will be shared with potential Big Pharma partners.

About Amarillo Biosciences, Inc. (www.amarbio.com)

Amarillo Biosciences, Inc. is a U.S. biotechnology firm operating in global partnership with the Hayashibara Group, which also holds 14% of Amarillo Biosciences shares and has provided over $17.8 million in loans, grants and equity investments. The Company's primary focus is extensive and ongoing R & D into the use of low-dose, orally administered interferon as a treatment for a variety of conditions, including Sjogren's syndrome, Behcet's disease, and opportunistic infections in patients who are HIV positive. In its 22-year history, ABI has invested nearly $38 million to establish oral interferon as a therapeutic agent. The majority of those funds were invested in clinical trials in an effort to achieve FDA approval for oral interferon therapies. Additional information is available on the ABI web site at http://www.amarbio.com/.

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve risks and uncertainties, including uncertainties related to product development, uncertainties related to the need for regulatory and other government approvals, dependence on proprietary technology, uncertainty of market acceptance of oral interferon or the Company's other product candidates and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. In particular, see "Item 1. Description of Business" of the Company's Form 10-KSB for the year ended December 31, 2005.

Investor Relations:

Philippe Niemetz

PAN Consultants, Ltd.

Tel: 800-477-7570

Tel: 212-344-6464

Fax: 212-618-1276

e-mail: Contact via http://www.marketwire.com/mw/emailprcntct?id=5A1E084F7848002C

ph M. Cummins, DVM, PhD

Amarillo Biosciences, Inc.

Tel: 806-376-1741 x 13

Fax: 806-376-9301

e-mail: Contact via http://www.marketwire.com/mw/emailprcntct?id=C1DC61DBE2635E18

SOURCE: Amarillo Biosciences, Inc.

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