Viragen's CEO Updates Shareholders

Apr 26, 2001, 01:00 ET from Viragen, Inc.

    PLANTATION, Fla., April 26 /PRNewswire/ -- The following release was
 issued today by Viragen, Inc. (AMEX:   VRA):
 
     Dear Shareholder,
     Viragen has come a long way over the past year but what is most exciting
 lies ahead.  While enrollments in our European Phase II, Stage 2 Hepatitis C
 clinical trials continue, management has developed important strategies
 related to expanded production capabilities, regulatory matters and potential
 distribution of our natural alpha interferon.  We look forward to implementing
 many of these strategies this year.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010426/HSTH018-a
              http://www.newscom.com/cgi-bin/prnh/20010426/HSTH018LOGO-b )
     Management constantly monitors agreements and evaluates issues relating to
 source white blood cells, international regulatory matters, new medical
 indications, timelines, markets, anti-virals, pegylation, competitive drugs,
 distribution, securities markets and a host of other considerations.
     Management is often constrained in reporting specific results of the
 Company's progress to shareholders by scientific, clinical, regulatory,
 securities, competitive and/or good business considerations.  This approach
 has served the Company and its shareholders extremely well as evidenced by the
 quality and scope of its collaborations.  In turn, these collaborations have
 resulted in Viragen acquiring valuable, exclusive, worldwide rights to
 commercialize a pipeline of promising novel and powerful anti-cancer drugs and
 a very important platform production technology.
      Our Oncological Projects are progressing most satisfactorily.  Viragen's
 scientific teams interact and collaborate with very prestigious scientists
 from Memorial Sloan-Kettering Cancer Center, the Cancer Research Campaign of
 the United Kingdom and the National Institutes of Health.  While this speaks
 to the level of Viragen's scientific expertise, it also reflects carefully
 developed strategies implemented by Management.  These undertakings focus on
 the development of human monoclonal antibodies, protein-based drugs, which
 need to be produced in very large quantities.
     The internationally acclaimed Roslin Institute made medical history by
 cloning Dolly the Sheep and subsequently creating transgenic chickens via
 their Avian (bird) Transgenic Technology.  These accomplishments are patent
 protected and proven.  As testament to Viragen's possessing such a valuable
 and commercial asset, other biotech companies have come to recognize the
 potential of avian production and are attempting to experiment in directions,
 which cannot capitalize on Roslin's patents, expertise and know-how.
 Management's underlying strategy was to find and provide a cheaper, easier and
 quicker manufacturing production method, which could produce the huge
 quantities needed for Viragen's cancer fighting monoclonal antibodies and,
 indeed, all protein-based drugs.  The use of transgenic mammals such as cows,
 goats, sheep, rabbits, etc., which produce protein-based drugs in their milk
 appears quite costly and time-consuming with other limitations.
     It soon became evident that globally the biotech and pharmaceutical
 industries did not have adequate manufacturing capacity to produce the
 increasing numbers of promising new protein-based drugs.  Management's
 challenge was to obtain the worldwide, exclusive rights to commercialize avian
 production technology not only for Viragen's needs, but also to provide a
 platform production technology for the drug industry worldwide.  Roslin and
 Viragen jointly announced their agreement assigning Roslin's underlying
 patents and exclusive global rights to commercialize avian technology to
 Viragen on December 6, 2000.  Viragen's scientists would now be associated and
 collaborate with the world's most authoritative experts in this field
 including Dr. Ian Wilmut, renowned for cloning Dolly the Sheep, and Dr. Helen
 Sang whose work produced the world's first transgenic chicken and is
 considered the world's avian transgenic expert.
     The following attempts to answer the most frequently asked shareholder
 questions covering a wide variety of subjects:
     The first protein-based drugs to be manufactured via the Roslin/Viragen
 collaboration (i.e. inside the whites of chicken eggs) are forecast to be
 produced by the summer of next year, possibly sooner.  A full flock of
 transgenic chickens could be producing impressive quantities of drugs very
 quickly by biotech standards, sometimes as short as 6 months from the founder
 chicken's birth.
     It is important to note that there have been protein-based drugs produced
 in the customary manner that have been approved by the FDA.  It is impossible
 to predict whether the FDA or other international regulatory agencies will
 accept studies, which demonstrate that two different manufacturing methods,
 customary and avian technology, produce exactly the same molecule.  Then,
 biotech and pharmaceutical companies, with approved drugs, will have access to
 our avian production alternative.
     There are about 200 protein-based drugs in various phases of preclinical,
 Phase I and Phase II Clinical Trials which target all kind of diseases.
 Rather than committing hundreds of millions of dollars to build a facility to
 provide large quantities of the drug candidate to support Phase III clinical
 trials prior to getting regulatory approval, most pharmaceutical companies use
 Contract Manufacturing Organizations (CMO) to fulfill their production needs.
 However, there are currently inadequate CMO as well as company-owned
 facilities to even begin to accommodate the vast quantities of proteins
 necessary to meet production requirements.
     As reported by many respected trade publications, many biotech and
 pharmaceutical companies may have to wait several years or simply abandon a
 promising drug because of the time, capital outlay and/or the
 market/investment ratio involved.  Any CMO that can offer production
 facilities to support Phase III Clinical Trials for the industry can command
 significant upfront fees, royalties (which would continue through
 commercialization) and, in some cases, certain equities in the customer's
 company.  Viragen also believes that Avian Production will become an important
 alternative manufacturing platform technology capable of producing the huge
 quantities required for commercialization of approved drugs.  Viragen has the
 opportunity to emerge as such a CMO with unique competitive advantages.
     Here are some brief answers to other questions:  At this stage, only one
 drug would be produced in each egg, although eventually the technology
 promises to be able to produce other complex proteins.  Public controversy
 surrounding cloning does not affect the avian project.  These chickens will
 not be eaten.  There will always be one or more back-up flocks some located in
 different countries just in case of disease.  Very important to note that,
 among other advantages, the chicken alone has 100% of all human sugars (with
 no extra sugars).  Therefore, it should be superior.  It is the chicken that
 represents the closest to the human's sugar structure which plays such an
 important role in the binding of these proteins to their target.
     Here is an oversimplification explaining Avian Production.  The process
 begins with a "founder hen" which, as an embryo, has had the targeted protein
 implanted.  It is the first hen to produce the drug in the white of its eggs.
 The eggs are hatched into chickens, which also produce the drug in their egg
 whites.  A flock containing large numbers of chickens are then procreated or
 perhaps cloned.  The crude drug is removed and then immaculately purified.
 Viragen's team is considered expert in protein purification as evidenced by
 its alpha interferon production experience.
     In order to produce protein-based drugs, the biotech or pharmaceutical
 company must invest $200 to $450 million in a new manufacturing facility.  The
 plant can take several years to build and pass regulatory inspection.  Current
 manufacturing protocols produce the crude protein drug in vessels called
 bioreactors.  This portion of the production process is estimated to represent
 one-third of a drug's manufactured cost.  Tens of millions of dollars in
 capital is required to build and operate these bioreactors.  There are several
 companies attempting to produce drugs in the whites of chicken eggs.  Viragen
 considers their likelihood of success low without access to important patents.
     As to our oncological projects, Viragen's cancer vaccine does not mean
 that a patient could be inoculated to avoid cancer but that certain chemicals
 which serve to protect the cancer cells can be attacked and destroyed by the
 body's own immune system.  No other company can legally work with these
 proteins since Viragen has obtained exclusive, worldwide rights or exclusive
 access.  These cancer collaborations will ultimately require clinical studies
 and their financing.  In the case of Memorial Sloan-Kettering, they have
 agreed to underwrite Phase I and Phase II of the melanoma clinical trials.
 Viragen is discussing potential collaborations with other pharmaceutical
 companies and other entities capable of financing trials and providing
 distribution.  It is also important to note that these represent potential
 combination therapies.
     The Company has instituted a variety of lawsuits in order to protect
 shareholder interests and, therefore, cannot provide details of these
 proceedings at this time.  The Company will continue to vigorously defend
 itself from parties that may be acting improperly or illegally.
     Our scientific and economic foundation is solid with a robust pipeline of
 drugs, technologies and collaborations.  We are now poised to make significant
 strides in meeting our goals.  I want to thank our shareholders for their
 support in helping bring Viragen to this most exciting stage.  It is my
 personal belief that this year will be a pivotal year for Viragen.
 
     Yours truly,
 
     Gerald Smith
     Chairman, President & CEO
 
     For more information, please visit our Web site at www.viragen.com .
 
     The foregoing letter contains forward-looking statements that can be
 identified by such terminology such as "expects," "potential," "suggests,"
 "may," "will," or similar expressions.  Such forward-looking statements
 involve known and unknown risks, uncertainties and other factors that may
 cause the actual results to be materially different from any future results,
 performance or achievements expressed or implied by such statements.  In
 particular, management's expectations regarding future research development
 results could be affected by, among other things, uncertainties relating to
 clinical trials and product development; unexpected regulatory delays or
 government regulation generally; the Company's ability to obtain or maintain
 patent and other proprietary intellectual property protection; and competition
 in general.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X57468426
 
 

SOURCE Viragen, Inc.
    PLANTATION, Fla., April 26 /PRNewswire/ -- The following release was
 issued today by Viragen, Inc. (AMEX:   VRA):
 
     Dear Shareholder,
     Viragen has come a long way over the past year but what is most exciting
 lies ahead.  While enrollments in our European Phase II, Stage 2 Hepatitis C
 clinical trials continue, management has developed important strategies
 related to expanded production capabilities, regulatory matters and potential
 distribution of our natural alpha interferon.  We look forward to implementing
 many of these strategies this year.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20010426/HSTH018-a
              http://www.newscom.com/cgi-bin/prnh/20010426/HSTH018LOGO-b )
     Management constantly monitors agreements and evaluates issues relating to
 source white blood cells, international regulatory matters, new medical
 indications, timelines, markets, anti-virals, pegylation, competitive drugs,
 distribution, securities markets and a host of other considerations.
     Management is often constrained in reporting specific results of the
 Company's progress to shareholders by scientific, clinical, regulatory,
 securities, competitive and/or good business considerations.  This approach
 has served the Company and its shareholders extremely well as evidenced by the
 quality and scope of its collaborations.  In turn, these collaborations have
 resulted in Viragen acquiring valuable, exclusive, worldwide rights to
 commercialize a pipeline of promising novel and powerful anti-cancer drugs and
 a very important platform production technology.
      Our Oncological Projects are progressing most satisfactorily.  Viragen's
 scientific teams interact and collaborate with very prestigious scientists
 from Memorial Sloan-Kettering Cancer Center, the Cancer Research Campaign of
 the United Kingdom and the National Institutes of Health.  While this speaks
 to the level of Viragen's scientific expertise, it also reflects carefully
 developed strategies implemented by Management.  These undertakings focus on
 the development of human monoclonal antibodies, protein-based drugs, which
 need to be produced in very large quantities.
     The internationally acclaimed Roslin Institute made medical history by
 cloning Dolly the Sheep and subsequently creating transgenic chickens via
 their Avian (bird) Transgenic Technology.  These accomplishments are patent
 protected and proven.  As testament to Viragen's possessing such a valuable
 and commercial asset, other biotech companies have come to recognize the
 potential of avian production and are attempting to experiment in directions,
 which cannot capitalize on Roslin's patents, expertise and know-how.
 Management's underlying strategy was to find and provide a cheaper, easier and
 quicker manufacturing production method, which could produce the huge
 quantities needed for Viragen's cancer fighting monoclonal antibodies and,
 indeed, all protein-based drugs.  The use of transgenic mammals such as cows,
 goats, sheep, rabbits, etc., which produce protein-based drugs in their milk
 appears quite costly and time-consuming with other limitations.
     It soon became evident that globally the biotech and pharmaceutical
 industries did not have adequate manufacturing capacity to produce the
 increasing numbers of promising new protein-based drugs.  Management's
 challenge was to obtain the worldwide, exclusive rights to commercialize avian
 production technology not only for Viragen's needs, but also to provide a
 platform production technology for the drug industry worldwide.  Roslin and
 Viragen jointly announced their agreement assigning Roslin's underlying
 patents and exclusive global rights to commercialize avian technology to
 Viragen on December 6, 2000.  Viragen's scientists would now be associated and
 collaborate with the world's most authoritative experts in this field
 including Dr. Ian Wilmut, renowned for cloning Dolly the Sheep, and Dr. Helen
 Sang whose work produced the world's first transgenic chicken and is
 considered the world's avian transgenic expert.
     The following attempts to answer the most frequently asked shareholder
 questions covering a wide variety of subjects:
     The first protein-based drugs to be manufactured via the Roslin/Viragen
 collaboration (i.e. inside the whites of chicken eggs) are forecast to be
 produced by the summer of next year, possibly sooner.  A full flock of
 transgenic chickens could be producing impressive quantities of drugs very
 quickly by biotech standards, sometimes as short as 6 months from the founder
 chicken's birth.
     It is important to note that there have been protein-based drugs produced
 in the customary manner that have been approved by the FDA.  It is impossible
 to predict whether the FDA or other international regulatory agencies will
 accept studies, which demonstrate that two different manufacturing methods,
 customary and avian technology, produce exactly the same molecule.  Then,
 biotech and pharmaceutical companies, with approved drugs, will have access to
 our avian production alternative.
     There are about 200 protein-based drugs in various phases of preclinical,
 Phase I and Phase II Clinical Trials which target all kind of diseases.
 Rather than committing hundreds of millions of dollars to build a facility to
 provide large quantities of the drug candidate to support Phase III clinical
 trials prior to getting regulatory approval, most pharmaceutical companies use
 Contract Manufacturing Organizations (CMO) to fulfill their production needs.
 However, there are currently inadequate CMO as well as company-owned
 facilities to even begin to accommodate the vast quantities of proteins
 necessary to meet production requirements.
     As reported by many respected trade publications, many biotech and
 pharmaceutical companies may have to wait several years or simply abandon a
 promising drug because of the time, capital outlay and/or the
 market/investment ratio involved.  Any CMO that can offer production
 facilities to support Phase III Clinical Trials for the industry can command
 significant upfront fees, royalties (which would continue through
 commercialization) and, in some cases, certain equities in the customer's
 company.  Viragen also believes that Avian Production will become an important
 alternative manufacturing platform technology capable of producing the huge
 quantities required for commercialization of approved drugs.  Viragen has the
 opportunity to emerge as such a CMO with unique competitive advantages.
     Here are some brief answers to other questions:  At this stage, only one
 drug would be produced in each egg, although eventually the technology
 promises to be able to produce other complex proteins.  Public controversy
 surrounding cloning does not affect the avian project.  These chickens will
 not be eaten.  There will always be one or more back-up flocks some located in
 different countries just in case of disease.  Very important to note that,
 among other advantages, the chicken alone has 100% of all human sugars (with
 no extra sugars).  Therefore, it should be superior.  It is the chicken that
 represents the closest to the human's sugar structure which plays such an
 important role in the binding of these proteins to their target.
     Here is an oversimplification explaining Avian Production.  The process
 begins with a "founder hen" which, as an embryo, has had the targeted protein
 implanted.  It is the first hen to produce the drug in the white of its eggs.
 The eggs are hatched into chickens, which also produce the drug in their egg
 whites.  A flock containing large numbers of chickens are then procreated or
 perhaps cloned.  The crude drug is removed and then immaculately purified.
 Viragen's team is considered expert in protein purification as evidenced by
 its alpha interferon production experience.
     In order to produce protein-based drugs, the biotech or pharmaceutical
 company must invest $200 to $450 million in a new manufacturing facility.  The
 plant can take several years to build and pass regulatory inspection.  Current
 manufacturing protocols produce the crude protein drug in vessels called
 bioreactors.  This portion of the production process is estimated to represent
 one-third of a drug's manufactured cost.  Tens of millions of dollars in
 capital is required to build and operate these bioreactors.  There are several
 companies attempting to produce drugs in the whites of chicken eggs.  Viragen
 considers their likelihood of success low without access to important patents.
     As to our oncological projects, Viragen's cancer vaccine does not mean
 that a patient could be inoculated to avoid cancer but that certain chemicals
 which serve to protect the cancer cells can be attacked and destroyed by the
 body's own immune system.  No other company can legally work with these
 proteins since Viragen has obtained exclusive, worldwide rights or exclusive
 access.  These cancer collaborations will ultimately require clinical studies
 and their financing.  In the case of Memorial Sloan-Kettering, they have
 agreed to underwrite Phase I and Phase II of the melanoma clinical trials.
 Viragen is discussing potential collaborations with other pharmaceutical
 companies and other entities capable of financing trials and providing
 distribution.  It is also important to note that these represent potential
 combination therapies.
     The Company has instituted a variety of lawsuits in order to protect
 shareholder interests and, therefore, cannot provide details of these
 proceedings at this time.  The Company will continue to vigorously defend
 itself from parties that may be acting improperly or illegally.
     Our scientific and economic foundation is solid with a robust pipeline of
 drugs, technologies and collaborations.  We are now poised to make significant
 strides in meeting our goals.  I want to thank our shareholders for their
 support in helping bring Viragen to this most exciting stage.  It is my
 personal belief that this year will be a pivotal year for Viragen.
 
     Yours truly,
 
     Gerald Smith
     Chairman, President & CEO
 
     For more information, please visit our Web site at www.viragen.com .
 
     The foregoing letter contains forward-looking statements that can be
 identified by such terminology such as "expects," "potential," "suggests,"
 "may," "will," or similar expressions.  Such forward-looking statements
 involve known and unknown risks, uncertainties and other factors that may
 cause the actual results to be materially different from any future results,
 performance or achievements expressed or implied by such statements.  In
 particular, management's expectations regarding future research development
 results could be affected by, among other things, uncertainties relating to
 clinical trials and product development; unexpected regulatory delays or
 government regulation generally; the Company's ability to obtain or maintain
 patent and other proprietary intellectual property protection; and competition
 in general.
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X57468426
 
 SOURCE  Viragen, Inc.