Proneuron Biotechnologies and Craig Hospital joint experimental program to treat Spinal Cord Injury receives US$ 1 million funding from the BIRD Foundation
June 25, 2002

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Proneuron Biotechnologies Inc. and Craig Hospital of Denver Colorado today announced the initiation of a joint program to continue the development of Proneuron's macrophage cell therapy for the treatment of Spinal Cord Injuries (SCI). The collaboration includes the establishment of the first Proneuron Cell Center in the US, the initial step in implementing Proneuron's strategy to establish and develop clinical and commercialization operations in the US. This center will enable Proneuron (pending FDA approval) to start Phase 2 clinical trials and provide its proprietary autologous macrophage treatment to patients in the US. Proneuron will establish additional Cell Centers throughout the country within the next few years.

Proneuron reached its targeted patient cohort for its Phase 1 FDA-regulated clinical trial in Israel and will soon start discussions with the FDA on the next stages of clinical development of the therapy. Dr. Valentin Fulga, Senior VP for Development at Proneuron commented: "We are honored to collaborate with this excellent Institution and progress with our mutual goal of developing an effective therapy for SCI. The relationship between Craig and Proneuron has started two years ago and the hospital's outstanding medical team has followed the clinical progress of some of our patients."

Craig is one of the world's leading centers for the treatment of spinal cord injuries and traumatic brain injuries and Craig has treated over 23,000 SCI patients, the largest number of any single US facility. The hospital is designated by the National Institutes of Disability Rehabilitation & Research as one of just 16 model spinal cord injury centers and 17 model traumatic brain injury centers in the US. Additionally, Craig has been listed for twelve consecutive years as one of the top US rehabilitation centers by U. S. News and World Report magazine.

Dr. Daniel Lammertse, Medical Director of Craig Hospital in Colorado and President of American Spinal Injury Association, has followed the clinical progress of several of the phase one trial subjects. He has also expressed a cautious optimism for the potential of this treatment: "The phase one results suggest a positive treatment effect, giving clinicians hope that a new era of intervention is at hand."

The BIRD Foundation has approved a $1,000,000 grant, for the project. BIRD, Israel-US Bi-national Industrial Research and Development was established in 1977 under an agreement signed by the US and Israeli governments to promote industrial R&D. It has since played a major role in fostering joint industrial R&D between American and Israeli companies. The BIRD Foundation's Board of Governors is comprised of representatives of both the US and Israeli governments.

Dov Hershberg, Executive Director of the BIRD Foundation, said: "Following our review which was assisted by experts from the US National Institute of Standards and Technology (NIST) and from the Israeli Office of the Chief Scientist, we have decided to approve the grant for this valuable project. Proneuron and Craig Hospital are developing a groundbreaking therapy that could potentially change the life of thousands of people around the world."

Denny O'Malley, Craig Hospital's CEO, added: "Craig Hospital is very pleased to be part of this exciting collaboration with Proneuron. The promising results of the Phase I Clinical trial gives us optimism that there is more to be learned in this next phase of research which could ultimately benefit people with spinal cord injuries. That is our goal - to help this population to whom we have devoted so much of our mission."

Nir Nimrodi, Proneuron's CEO stated, "Our collaboration with Craig Hospital is one of the key elements in achieving our mission to become the leader in the treatment of acute spinal cord injuries. This specific project, supported by the BIRD Foundation, accelerates our ability to operate in the US."

About Proneuron: Proneuron Biotechnologies Inc., based in Ness-Ziona, Israel, is a privately held biopharmaceutical company developing products for the treatment of spinal cord injuries and other acute and chronic disorders of the central nervous system based on proprietary technology for modulating the interaction between the nervous and the immune systems. See http://www.proneuron.com for more information including patient recruitment details.

Information about the BIRD Foundation can be found at www.birdf.com

Information about the Craig Hospital Foundation can be found at www.craighospital.org

Contact Proneuron:
Valentin Fulga, M.D.
Senior VP Development
+972-8-940-9550
valentin@proneuron.com
Contact Craig Hospital:
Kenny Hosack
303-789-8490
khosack@craighospital.org