News Release

Allelix Clones Receptor For Intestinal Growth Factor GLP-2

Peer-Reviewed Publication

Noonan/Russo Communications

Toronto, Canada - February 15, 1999 - Scientists from Allelix Biopharmaceuticals Inc. (TSE/ME: AXB) will report the cloning of the receptor for Glucagon-like Peptide 2 (GLP-2), which plays a unique role in intestinal growth and nutrient absorption, in the February 16 issue of the Proceedings of the National Academy of Sciences. The findings offer valuable information about the specificity and action of GLP-2, for which Allelix has developed a proprietary analog, ALX-0600, as a potential therapy for several gastrointestinal disorders including short bowel syndrome. Because the GLP-2 receptor was found almost exclusively in the small intestine, ALX-0600 is expected to act in a highly specific manner at the target site.

Normally, GLP-2, a peptide hormone, acts in the body as a potent stimulator of cell growth in the lining of the small bowel. This growth dramatically increases the surface area of the intestine, where nutrients are extracted from food and then circulated into the body. Diseases such as short bowel syndrome, in which the decreased surface area results in reduced nutrient absorption, can lead to chronic hospitalizations and even death. No effective treatments are currently available for patients with the most severe form of these diseases.

"The cloning of this naturally occurring receptor is a critical step in determining exactly where and how GLP-2 functions in the body," said first author Donald G. Munroe, Ph.D., senior research scientist at Allelix. "With the cloned human receptor in hand, we are now able to better understand the mechanisms that connect GLP-2 with intestinal growth and nutrient absorption at the cellular and molecular levels."

Allelix has completed work in phase I clinical studies of ALX-0600 for short bowel syndrome, a condition estimated to affect 40,000 to 50,000 sufferers worldwide. Phase II studies are planned for 1999. Allelix is also considering investigational trials for additional clinical indications such as inflammatory bowel disease and intestinal mucositis associated with cancer chemotherapy.

The report, "Prototypic G Protein-coupled Receptor for the Intestinotrophic Factor Glucagon-like Peptide 2," describes the cloning of both the human and the rat GLP-2 receptor, whose gene was localized to the short arm of chromosome 17. The receptor is expressed almost entirely in the gut, particularly in defined segments of the small intestine. The authors report that GLP-2 binds to its receptor with high affinity and activates a well-known cAMP signaling mechanism within the cells. Consistent with the high specificity of GLP-2, the researchers noted that closely related hormones from the glucagon family do not activate the GLP-2 receptor.

"This report reaffirms earlier Allelix studies showing that treatment with ALX-0600 increases the absorptive area of the small intestine. Our new results also confirm findings on the specificity of GLP-2's intestinal growth effects," noted John Dietrich, Ph.D., senior vice-president for research and development at Allelix. "Because we now know that the receptor site is localized, it better supports the hypothesis that treatment of gastrointestinal disorders with ALX-0600 may be accompanied by minimal side-effects."

Collaborators on the PNAS paper include Daniel J. Drucker, M.D., of the Department of Medicine at the Toronto Hospital and the University of Toronto. In a related research study published in the January issue of the American Journal of Physiology, Dr. Drucker and his colleagues reported that ALX-0600 significantly enhanced the regeneration of intestinal mucosal cells in mice with chemically induced colitis.

"Our observations suggest that administering ALX-0600 to enhance normal mechanisms that regulate intestinal cell growth may be a useful adjunct for treating the intestine in the presence of active inflammation," noted Dr. Drucker.

Allelix's ALX-0600 is an analog of human GLP-2 that is approximately three times more potent than native GLP-2 in a mouse model of intestinal epithelial cell growth activity. Several academic researchers are studying ALX-0600 to better understand its mechanism of action and to explore its potential for various gastrointestinal disorders.

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Other Contact Information:
Jerry Ormiston, Investor Relations
Allelix Biopharmaceuticals Inc.
905-677-0831 ext. 223
jormis@allelix.com

Keri Schoonderwoerd, Communications Specialist
The Toronto Hospital
416-340-4800 ext. 6934
t11paad@torhosp.toronto.on.ca

To obtain the full text of the paper contact:
National Academy of Sciences
David Schneier
202-334-3741

Photos are available at www.allelix.com under "Protein Therapeutics/Images-GI"

The Toronto Hospital is one of Canada's acute care teaching hospitals with 1,100 beds and five designated priority programs: cardiac sciences, neurosciences, transplantation, oncology and primary ambulatory community care. The Toronto Hospital, a University of Toronto teaching hospital, is recognized internationally for excellence in teaching, research and patient care.

Allelix Biopharmaceuticals Inc., with R&D facilities in Canada and the United States, discovers and develops biopharmaceuticals in partnership with international pharmaceutical and biotechnology companies. Products in development include ALX1-11 for osteoporosis, ALX-0600 for gastrointestinal disorders, ALX-0646 for migraine and ALE-26015 for dementia. The preclinical pipeline includes compounds for schizophrenia, dementia, pain and addiction.



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