News Release

Discovery may lead to first medical treatment for Celiac disease

Genetic digestive disorder affects an estimated one in 250 Americans

Peer-Reviewed Publication

Zengen

WOODLAND HILLS, Calif. (February 19, 2003) - Results from a new study may lead to the first medical treatment for celiac disease, a hereditary digestive disease that can damage the small intestine and interfere with the absorption of nutrients from food. Celiac disease sufferers cannot tolerate gluten, a protein that is found in wheat, barley and rye. Celiac disease affects an estimated one in 250 Americans, mostly those of European descent, and there is no known medical treatment or cure.

Zengen, Inc. researchers discovered that a synthetic form of alpha-Melanocyte-Stimulating Hormone (a-MSH) has an anti-inflammatory effect in celiac mucosa, the inside lining of the intestinal tract that absorbs food into the body. A naturally occurring molecule, a-MSH modulates inflammatory and immune responses. Data confirming the presence of a-MSH in celiac mucosa suggests the presence of a local reaction of the molecule to control the inflammatory response elicited by gliadin. Gliadin is the subfraction of gluten that acts as a toxin or poison in people with celiac disease; it causes an immune reaction, resulting in damage to the small intestine and an inability to digest and absorb nutrients necessary for health and growth (malabsorption).

The findings, "Anti-Inflammatory Effects of a-Melanocyte-Stimulating Hormone in Celiac Intestinal Mucosa," appear in the February 20, 2003 issue of NeuroImmunoModulation, the official journal of the International Society for Neuroimmunomodulation.

"Our research suggests that locally-produced a-MSH modulates inflammation and perhaps limits epithelial damage in patients with celiac disease," stated James M. Lipton, Ph.D, study investigator, chief scientific officer and director of Zengen. "We are particularly excited by these findings as these data, coupled with abundant evidence of the anti-inflammatory and anti-infective activity of Zengen's novel molecules based on a-MSH, further validate our research and development efforts in numerous areas including celiac disease. These positive results will be used to guide further advancements toward clinical use of the molecules."

The study used human celiac mucosa cells in culture. Researchers collected duodenal biopsy pairs from 53 adult celiac patients (34 untreated patients and 19 celiac patients on a gluten-free diet) and 14 normal subjects and conducted three series of experiments in order to determine: (1) mucosal immunoreactivity for a-MSH and melanocortin receptors (MCRs), and gene expression of a-MSH precursor pro-opiomelanocortin and MCRs; (2) a-MSH and inflammatory cytokine production by duodenal specimens in vitro, and the influence of synthetic a-MSH on such cytokine production, and; (3) the influence of stimulation with gliadin on a-MSH and cytokine production in vitro and the effect of a-MSH on gliadin-stimulated cytokine production.

Results suggest a localized anti-inflammatory influence based on a-MSH and its receptors: duodenal mucosa showed evidence of a-MSH and two of its receptor subtypes, MC1R and MC5R. Further, a-MSH and MC1R immunoreactivity was more intense in cell specimens from celiac patients and release of interleukin 6 (a lymphokine that stimulates the inflammatory response) from gliadin-stimulated duodenal mucosa was inhibited by synthetic a-MSH.

"Patients suffering from celiac disease currently have no medical options beyond a lifetime adherence to a strict, gluten-free diet," added Dr. Lipton. "Clearly, if we can control the inflammatory responses that are a major part of celiac disease and limit the immunosuppression, this could lead to the first medical treatment to help the millions worldwide suffering from this genetic disease."

Zengen's novel molecules were developed from more than 25 years of original research in the US, Europe and Asia on peptide molecules derived from alpha-Melanocyte-Stimulating Hormone (a-MSH). James Lipton, Ph.D., Zengen's chief scientific officer, chairman of the scientific advisory board and director, and his collaborators first demonstrated that a-MSH possesses anti-inflammatory properties and uncovered the specific activity of the carboxy-terminal tripeptide region (C-terminal peptide) of the a-MSH peptide. These discoveries led to the development of Zengen's proprietary peptide molecules, including CZEN 002, a synthetic octapeptide. Zengen is currently conducting phase I/II clinical trials with CZEN 002 in vaginitis.

About Celiac Disease
According to the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) of the National Institutes of Health (NIH), celiac disease (CD), also known as gluten intolerance, celiac sprue or gluten sensitive enteropathy, affects an estimated one in 250 Americans. Celiac disease is a condition in which there is a chronic reaction to proteins called glutens which causes destruction of the villi in the small intestine, with resulting malabsorption of nutrients. A genetic disease, it may appear at any time in the life of a person with a hereditary predisposition.

Celiac disease is often misdiagnosed, symptoms are varied and there is no current medical treatment or cure. Patients who suffer from celiac disease currently have only one alternative �Eadherence to a lifetime, gluten-free diet. If left untreated, celiac disease can lead to malabsorption, which, in turn, can lead to malnutrition. Celiac disease is especially serious in children and adolescents, who need adequate nutrition to develop properly. Further, people with celiac disease who don't maintain a strict, gluten-free diet have a greater chance of developing one of several forms of cancer, particularly intestinal lymphoma. Other long-term complications include anemia, diabetes mellitus, hypothyroidism, osteoporosis, seizures and peripheral neuropathy.

About Zengen, Inc
Zengen, Inc. is a biopharmaceutical company focused on discovering, developing and commercializing innovative products to treat and prevent infection and inflammation through application of its proprietary peptide technologies. Zengen's novel molecules offer broad-based anti-infective and anti-inflammatory solutions for multiple diseases and disorders, ranging from yeast infection to transplantation, and have the potential to significantly alter the way these diseases are treated. For more information about Zengen, please visit www.zengen.com.

Zengen, Inc. Forward-Looking Statement Disclaimer
This announcement may contain, in addition to historical information, certain forward-looking statements that involve risks and uncertainties. Such statements reflect management's current views and are based on certain assumptions. Actual results could differ materially from those currently anticipated as a result of a number of factors. The company is developing several products for potential future marketing. There can be no assurance that such development efforts will succeed, that such products will receive required regulatory clearance or that, even if such regulatory clearance were received, such products would ultimately achieve commercial success.

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