Press Releases

AGI Therapeutics plc - Product update and outlook for 2007

Dublin, Ireland, 15th February 2007 - AGI Therapeutics plc ("AGI" or the "Company") (AIM, IEX: AGI), a speciality pharmaceutical company focused on gastrointestinal drug products, today announces continued progress on key development programmes and outlines its plans for these programmes in 2007.

Following on from the reporting of clinical results on 4 of its products in 2006 and the recent reporting, earlier this month, of clinical results on its other 2 products, AGI is now in a position to map the next key steps in progressing five of the original six products in its pipeline into further clinical development.

Arverapamil:

· We have requested a meeting with the United States Food and Drug Administration (FDA) to define and agree the full development strategy for our lead product candidate, arverapamil (AGI-003) required to support an NDA submission for irritable bowel syndrome (IBS). We expect to provide guidance on the overall development plan for this product in Q2 2007.

· We have now completed the manufacturing of arverapamil drug substance to support anticipated further development requirements and entered into a manufacturing agreement with an FDA-approved manufacturer to supply the arverapamil product for the next phase of clinical testing. We have also recently initiated a Phase I pharmacokinetic study to further define the pharmacokinetics of arverapamil.

Omeprazole:

· We have initiated a Phase II combined pharmacokinetics and pharmacodynamics study of our controlled release omeprazole (AGI-010) product for gastro-esophageal reflux disease (GERD) with our partner Axcan Pharma Inc (Axcan), and expect to report results in Q2 2007.

4-ASA

· We have decided to advance 4-ASA (AGI-004) into Phase II clinical development for ulcerative colitis (UC) and are currently evaluating the design and scope of this study.

Mecamylamine and Arbaclofen

· We recently reported results for controlled release mecamylamine (AGI-004) and arbaclofen (AGI-006) and given that promising data we are now evaluating the potential use of these two products in chemotherapy-induced diarrhoea and diabetic gastroparesis respectively.

Espindolol

· As indicated in September and following consultation with our medical advisory panel and other experts, and given the high levels of activity expected with our other programmes, we have decided not to pursue further development of espindolol (AGI-001) in either functional dyspepsia or IBS.

Commenting on the update, Dr John Devane, CEO of AGI said:

"2007 promises to be an exciting year for AGI as we are set to make further progress in the clinic. Following on from the positive outcome of the Phase II trial which we completed last year we are now preparing to move arverapamil into the next phase of clinical development in the treatment of IBS. We have completed proof of concept clinical evaluation on all of the other products in our current portfolio and, with the exception of espindolol, believe the encouraging results reported to date warrant further clinical development. In addition to our commitment to move forward aggressively during the year with the arverapamil and omeprazole programmes, we plan to progress Phase II clinical evaluation of our other pipeline products.

"Furthermore, our recent agreement with Axcan demonstrates both our willingness to partner and our desire to continue to be directly involved in the development of our products. Such agreements also enable us to achieve our strategic goal of evolving AGI as an integrated speciality pharmaceutical company in the future through retaining co-promotion and other marketing rights."

Contact Information:

For further information please see www.agitherapeutics.com

Update on key Clinical Research Programmes

Arverapamil (AGI-003)
Following the reporting of positive Phase II results of this product in the treatment of non-constipation dominant IBS in May 2006, AGI has completed evaluation of all of the clinical data and reviewed the results with its medical advisory panel (see Press Release January 22, 2007). AGI believes that the clinical results demonstrate a robust therapeutic profile for IBS with strong signals of therapeutic benefit in both primary and secondary end-points with a good safety profile.

AGI has requested a meeting with the United States FDA to define and agree the further development strategy for this product which will be required to support an NDA submission. Based on the specific requirements of the FDA, the Company expects to provide guidance on the overall development plan for this product in Q2 2007.

AGI has recently taken receipt of sufficient quantities of arverapamil drug substance to support its anticipated further development requirements. In addition, AGI has entered into a scale-up and manufacturing contract with an FDA-approved US-based manufacturer to supply AGI's arverapamil product requirements for future development activities. AGI has recently initiated a Phase I study in order to better define the pharmacokinetics of arverapamil.

Dr David Young, AGI's President of US operations, commented on the upcoming meeting;
"The meeting with the US Food and Drug Administration is the next critical step in progressing arverapamil development along the path to an NDA. We have diligently spent the time, since the release of the preliminary Phase II results, further analysing the data and discussing with expert clinicians how best to design the next clinical development phase for this compound. We continue to be very excited by the potential of arverapamil and are anxious to ensure that the next phase of development is designed to meet the requirements and expectation of regulatory agencies, clinicians and ultimately, patients."

Omeprazole (AGI-010)
AGI entered into a co-development and license agreement with Axcan Pharma Inc. in Sept 2006 to jointly develop a controlled release omeprazole product based on AGI's CHRONAB formulation approach for North American markets. AGI is working closely with Axcan to progress omeprazole through the current Phase II product optimisation. AGI has recently initiated a Phase II combined human pharmacokinetics and pharmacodynamics study in normal human volunteers to confirm the in-vivo drug release and pharmacokinetics as well as the intra-gastric pH profiles of an optimised CHRONAB formulation of omeprazole and expects to report the results of this study in Q2 2007. Thereafter, AGI and Axcan plan to submit a request for a meeting with the FDA to define and agree the final phase of development for this product.

4-ASA (AGI-022)
Based on the positive Phase I results reported in 2006, AGI has decided to progress this product into Phase II clinical evaluation for the treatment of ulcerative colitis (UC). The goal of the planned Phase II study will be to confirm the efficacy/dosage advantages of the product in UC patients. Formulation development work and scale-up of manufacture is now underway and the Phase II trial design is being finalised.

Mecamylamine (AGI-004)
Preliminary results for controlled release mecamylamine in Functional Diarrhoea were reported recently (February 1, 2007)

The results demonstrated a strong signal in improved stool consistency in Functional Diarrhoea patients but without a matching response in patient global impression. AGI believes that controlled release mecamylamine has the potential to be an effective agent in diarrhoeal states characterised by a high frequency of watery stools. Given the mechanism of action of mecamylamine on nAChR (nicotinic acetylcholine) receptors and the pathophysiology of certain diarrhoeal states which are not satisfied by current therapy, AGI has identified chemotherapy-induced diarrhoea (CID) as an area of unmet clinical need where controlled release mecamylamine may have therapeutic benefit and is finalising plans to progress into Phase II clinical development for this indication.

Arbaclofen (AGI-006)
Preliminary results for arbaclofen in Functional Dyspepsia were reported recently (February 1 2007).

The results demonstrated a robust profile of beneficial effects on a range of dyspeptic symptoms but without a matching response in patient global impression. Functional Dyspepsia continues to represent a difficult indication to translate drug activity into a global response. The sub-classification of functional dyspepsia in ROME III reflects this continuing difficulty and may offer a strategy for further development in this indication in the future.

AGI has determined that the profile of activity of arbaclofen in various dyspeptic symptoms matches well with the desired profile of a therapy for the dyspeptic symptoms of gastroparesis. Diabetic gastroparesis is the most common manifestation of the dyspeptic symptoms of gastroparesis, however effective and well-tolerated therapy options are extremely limited for these patients. AGI is now finalising plans for further Phase II clinical development for gastroparesis.

Espindolol (AGI-001)
Preliminary results of two clinical trials that examined espindolol in Functional Dyspepsia (FD) and Irritable Bowel Syndrome (IBS) have been reported to date. Based on further data analysis, AGI has determined that the results of the FD trial were inconclusive and did not demonstrate any convincing signals of activity. In the IBS trial, espindolol failed to meet primary endpoints although some limited positive signals were observed at the higher dose levels. However, having reviewed these results with our Medical Advisory Board, we have concluded that these signals were not sufficiently compelling to support further development of this product in either of these indications.

About AGI

AGI is a speciality pharmaceutical company which is focused on the development and commercialisation of differentiated drug products for gastrointestinal (''GI'') diseases and disorders. AGI's common shares are listed on the Alternative Investment Market of the London Stock Exchange ("AIM") and on the Irish Enterprise Exchange of the Irish Stock Market ("IEX") as "AGI".

The Company has a portfolio of product candidates derived from the Known Molecular Entity (''KME'') approach to drug re-profiling and development. KME is a re-profiling methodology used by the Company to identify existing therapeutic drugs which typically have been marketed for a number of years, have established safety profiles and can be developed for new clinical indications or with improved profiles in their existing clinical indications. In this way, the Company seeks to reduce the risk, time and cost of new product development as compared to the development of new chemical entities.

AGI is developing a range of product candidates to treat a variety of prevalent GI diseases and disorders, including irritable bowel syndrome, functional dyspepsia, ulcerative colitis and gastro-esophageal reflux disease. The Company is targeting areas of the GI therapeutic drug products market for its product candidates where there are currently unmet medical needs or where the effectiveness of existing drug therapies can be further improved.

The Company has six clinical stage product candidates which are either isomers or new drug delivery formulations of existing approved drugs, and which have established safety and tolerability profiles in their currently approved clinical indications. These product candidates are all in clinical development, including five Phase II trials.

AGI intends to complete its ongoing clinical trials and, dependent on the results of these trials, the Company will initiate late stage development of a lead product candidate and will also seek to enter into licensing and development agreements with pharmaceutical companies so as to enhance the global market reach for its products and achieve optimal revenue and value opportunities for the Company.

Statements contained within this press release may contain forward-looking comments that involve risks and uncertainties that may cause actual results to vary from those contained in the forward-looking statements. In some cases, you can identify such forward-looking statements by terminology such as 'may', 'will', 'could', 'forecasts', 'expects', 'plans', 'anticipates', 'believes', 'estimates', 'predicts', 'potential', or 'continue'. Predictions and forward-looking references in this press release are subject to the satisfactory progress of research, which is, by nature, unpredictable. Forward projections reflect management's best estimates based on information available at the time of issue.

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