FOR IMMEDIATE RELEASE

Novel Viral Vaccine Protects Against AIDS
in Animal Model
- - BioStratum Forms New Subsidiary THERAVAX
to Develop New Therapeutic Approach to Treat HIV-1 Infection Using Vaccines - -

Research Triangle Park, N.C., November 11, 1998 -- BioStratum Incorporated announced today that its proprietary gene-attenuated virus vaccine candidates prevent the development of AIDS in monkeys. The
report, published in the November Journal of Virology, documents the efficacy of two gene-attenuated virus vaccines that protect macaque monkeys against
exposure to an HIV-1- based virus that produces AIDS.
Opendra ("Bill") Narayan, Ph.D., D.V.M., director of the Marion Merrell Dow Laboratory of Viral Pathogenesis at the University of Kansas Medical Center, conducted the study.

BioStratum also announced today the formation of a new subsidiary, TheraVax Incorporated, to expand current development efforts for a novel treatment for HIV infection that consists of a viral vaccine administered in combination with anti-HIV drugs. The goal of this new therapy will be to reduce or eliminate the need for continued drug cocktail therapy. All HIV-related technology currently licensed from the University of Kansas Medical Center to BioStratum, including a proprietary HIV-1-based AIDS animal model
and the candidate gene-attenuated virus vaccines, will be transferred to TheraVax for development and commercialization.

"With more people living with HIV infection, the need is great for an affordable, effective treatment such as a therapeutic vaccine that does not have the harmful side effects of the current anti-HIV drug therapies," says
Archie Prestayko, Ph.D., president and chief executive officer of BioStratum.

In the Journal of Virology study, Narayan and his colleagues tested the protective effects of the viral
vaccines by exposing the immunized monkeys to a highly pathogenic hybrid virus named KU-SHIV-1, which Narayan developed three years ago. KU-SHIV-1's inner structure is derived from SIV (simian immunodeficiency virus) and the virus' outer surface, or envelope, is derived from HIV-1 (human immunodeficiency virus). The composite virus
leads to full-blown AIDS in macaque monkeys within six months of infection, whether given intravenously, orally or intravaginally.

"This animal model has proved ideal for evaluating
the efficacy of vaccines against both intravenous and
sexually-transmitted HIV," says Narayan, a member of BioStratum's scientific advisory board. "The infection and disease induced by KU-SHIV-1 in macaque monkeys is nearly identical to that seen in humans infected with HIV-1, but compressed into a much shorter time period. In comparison, other models used to test AIDS vaccines
have been based on the SIV system, which induces an infection and disease quite differently than that caused
by HIV."

BioStratum's viral vaccine candidates are based on
KU-SHIV-1. To make the vaccine, scientists deleted specific disease-producing genes identified during the development of KU-SHIV-1. Because of the gene deletions, the resulting attenuated SHIV is crippled and unable to cause disease. However, the attenuated virus retains the ability to infect and induces an immune response that protects against future exposure to KU-SHIV-1. In the study reported by Narayan, 11 out of 12 macaque monkeys given the novel gene-attenuated viral vaccines did not develop AIDS when exposed intravaginally to KU-SHIV-1, whereas animals that did not receive the vaccine developed AIDS when exposed to the same virus.

Narayan's study demonstrates that the gene-attenuated viral vaccines have the capacity to prime that immune system to fight HIV. "We are currently treating KU-SHIV-1 infected monkeys with anti-HIV drugs to control the viral infection. Then we administer the vaccine to induce an
HIV-fighting immune response. Our goal is to build a therapy regimen around the vaccine that would reduce
the amount of anti-HIV drugs needed to keep the levels of the virus in check," says Narayan.

"Bill Narayan has a long history of experimentation with monkey immunodeficiency viruses and has rationally transferred this knowledge to the study of human immunodeficiency viruses and AIDS vaccines," says
Dani Bolognesi, Ph.D., director of the Duke University Center for AIDS Research and cofounder of TheraVax.
"His AIDS animal model, which TheraVax will license, is
an excellent system to test vaccine candidates for both preventative and therapeutic outcomes."

The paper, titled "Oral Immunization of Macaques with Attenuated Vaccine Virus Induces Protection Against Vaginally Transmitted AIDS" (Vol. 72 no. 11, p. 9069), is co-authored by 13 scientists from the University of Kansas Medical Center, the National Cancer Institute and the Yerkes Regional Primate Center. The National Institutes
of Health and BioStratum funded the research.

BioStratum is a privately held company developing proprietary therapeutics based on recent scientific advances in basal lamina and related technologies. The company's drug candidates are directed against novel
basal lamina extracellular targets involved in degenerative and invasive disease processes fundamental to kidney disease, diabetes and cancer. The company has also developed methods for the production of recombinant basal lamina proteins for use in wound repair and advanced tissue regeneration protocols.

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