Protemix raises US$14.5 million in first close of series a financing

Participants in venture financing of New Zealand biotechnology company include new U.S. and European investors

5 April 2007

San Diego & Auckland, New Zealand - (Business Wire)

Protemix Corporation Limited, a privately held biopharmaceutical company, today announced that it has raised US$14.5 million (NZ$20.5 million) in the first close of a Series A preferred financing. The round was co-led by new investors the Novartis Venture Fund, the venture investment arm of Novartis AG, and NovaQuest, the strategic partnering group of Quintiles Transnational Corporation, along with the previous major investor group led by Birnie Capital Ltd.

Protemix also announced that Dr. Reinhard Ambros, executive director of the Novartis Venture Fund, has joined the Protemix board of directors.

This successful financing underscores the value of Protemix's technology and product candidates for the treatment of cardiovascular disease, diabetes and related metabolic disorders, said Larry Ellingson, chairman of Protemix. The participation of these prominent European and U.S. investors adds an important strategic component to this financing, as Protemix continues on track to develop innovative therapeutics for the global market.

Reinhard Ambros commented, Protemix has developed an exciting pipeline of clinical and pre-clinical compounds from its effective discovery platform situated at the University of Auckland under the leadership of Professor Garth Cooper. We look forward to contributing to the ongoing development of new therapeutics to deliver significant patient benefit.

Proceeds from the financing will be used to advance the clinical development of Protemix's lead product, PX811019, as a potential treatment for diabetic heart failure, as well as the continued preclinical development of PX811013, a novel form of the glycoprotein hormone adiponectin, and other earlier stage programs in the company's pipeline.

PX811019 Clinical Development

PX811019 is a potential oral treatment for diabetic heart failure, a generally fatal complication associated with Type 2 diabetes, for which current treatments are relatively ineffective. Initial clinical studies have shown that six months oral treatment with PX811019 results in a significant decline in left ventricular mass toward normal along with elevated copper excretion in humans with Type 2 diabetes compared with non-diabetic control subjects. In addition to lowering excess copper, PX811019 treatment has been shown in experimental models to significantly alleviate heart failure following seven weeks of treatment, without lowering blood glucose. It was also shown to substantially improve the structure of cardiac muscle cells, and to reverse scarring of the heart.

Protemix is planning to initiate a Phase 2 safety and efficacy study in the first half of 2007 under the direction of leading cardiovascular researchers Craig Pratt, M.D. at the Methodist Hospital, Houston, Texas and James Young, M.D. at the Cleveland Clinic.

“We are very pleased to have the interest and support of these top thought leaders in the field of cardiovascular medicine, who will be undertaking our next key study at their top research institutions, said Mr. Ellingson.

About PX811013 (Glyponectin)

PX811013 is a unique, highly active form of adiponectin, a glycoprotein hormone that Protemix scientists have isolated and characterized from fat cells (adipocytes). The company has discovered that certain forms of adiponectin, including PX811013, are characterized by the presence of specific carbohydrate side chains and such glycosylated forms of the hormone have potent biological properties not shared by forms lacking those carbohydrate modifications. Specifically, PX811013 suppresses glucose production by the liver through the potentiation of insulin action. In preclinical studies, Protemix researchers have also shown that PX811013 reverses both alcohol-mediated and non-alcoholic liver damage. Non-alcoholic liver disease is a diabetic complication with significant mortality. Protemix has also discovered that PX811013 is a potent inhibitor of TNFα, a proinflammatory cytokine implicated in many inflammatory disorders, including rheumatoid arthritis, ulcerative colitis, multiple sclerosis and atherosclerosis.

About Novartis Venture Fund

Novartis Venture Fund (NVF), established in 1996, currently manages over $550 million in committed capital and is invested in more then 50 private companies. As a financially driven corporate life science investor, NVF invests in companies which have the potential to lead the next innovation wave in core therapeutic fields or explore new business areas that will be critical to patient care. The primary interest is in the development of novel therapeutics and platforms and is augmented with investments in medical devices, diagnostics, biomarkers and delivery systems. The Fund prefers to invest in the early-stages of company development and is able to lead, co-lead or participate in a larger syndicate. The NVF team of nine investment professionals located in Basel, Switzerland and Cambridge, MA brings together extensive experience in pharmaceutical R&D and venture capital. www.venturefund.novartis.com

About NovaQuest

NovaQuest, the strategic partnering group of Quintiles Transnational, is an industry pioneer in offering tailored financial and operational solutions that help pharmaceutical and biotech companies overcome development and commercialization challenges. Its unique managed partnership approach ensures sponsorship by senior-level executives, access to global development and commercial resources and expertise, and efficient operational delivery of services. Since 2000, NovaQuest has committed more than $1.6 billion in smart money to alliances with companies of all sizes. For more information, please visit www.novaquest.com.

About Protemix

Protemix is a privately held biopharmaceutical company that discovers, develops and commercializes novel drug therapies for the prevention and treatment of cardiovascular disease, diabetes and other metabolic disorders, and their complications. Through cost-effective research in New Zealand, the company has assembled a pipeline of innovative compounds, the first of which is in Phase 2 development for the treatment of diabetic and non-diabetic heart failure. Protemix is based on San Diego, California and Auckland, New Zealand. For further information on the company, please visit the Protemix website at www.protemix.com.