Pervasis Therapeutics' Vascugel(TM) Initiates U.S. Clinical Trials Following Successful FDA IND Review

Pervasis Therapeutics, Inc.

Pervasis Therapeutics' Vascugel(TM) Initiates U.S. Clinical Trials Following Successful FDA IND Review

September 27, 2006

Pioneer in regenerative cell-based therapies and devices begins Phase I trials of first biologically-active treatment to ameliorate acute vascular injury

Cambridge, MA -- September 27, 2006 -- Pervasis Therapeutics, Inc., a pioneer in regenerative cell-based therapies and devices, today announced that it has been enrolling patients in two Phase I clinical trials of the company's first product, Vascugel(TM). The company's Investigational New Drug (IND) application was successfully reviewed by the U.S. Food and Drug Administration (FDA) in May. The two clinical studies approved under the IND are evaluating the safety and feasibility of Vascugel(TM) for the maintenance of vascular patency after creation of arteriovenous (AV) access graft and AV fistula, respectively, for patients undergoing dialysis for the treatment of end-stage renal disease (ESRD).

Vascugel(TM) is a novel allogeneic cell therapy product that restores natural repair and regeneration pathways in the vasculature. Extensive preclinical studies at leading academic institutions suggest Vascugel(TM) has the potential to allow traumatized vasculature to return to homeostasis by simultaneously reducing intimal hyperplasia (thickening of the vessel wall - i.e. scar tissue formation), inflammation and thrombosis. The biological activity of Vascugel(TM) allows its application to a broad array of vascular procedures where poor medical outcomes are determined by loss of patency at the site of intervention.

Pervasis is conducting its "V-HEALTH" (Vascular intimal Hyperplasia: Extending Arterial and venous patency, Limiting vascular Trauma, and inhibiting Hyperplasia while re-establishing vascular health) Phase I clinical trials in patients with ESRD that require a permanent AV access for hemodialysis. Vascugel(TM) is the first therapy being developed to simultaneously improve outcomes for the two primary forms of surgical arteriovenous access, namely, AV grafts and AV fistulas. Safety and feasibility trials are planned to evaluate the safety, tolerability, and general performance of Vascugel(TM). There are over 300,000 patients undergoing hemodialysis in the United States today, with an estimated annual growth rate of nearly 5% for new AV graft and AV fistula procedures performed each year.

Steve Bollinger, President of Pervasis Therapeutics, said, "We are excited by the speed with which Vascugel(TM) has entered the clinic - less than one year after identifying our first application, executing an additional preclinical study and then gaining IND approval to proceed with the clinical program. This represents a major milestone in Pervasis' rapid progress towards introducing important advancements in patient care."

He added, "Our preclinical data strongly suggests that Vascugel(TM) could fundamentally change the management of vascular and other critical diseases. We expect to expand our indications for use as we continue clinical development."

Michael S. Conte, MD, Associate Professor of Surgery at Harvard Medical School and Director of Vascular Surgery Research at Brigham and Women's Hospital, is serving as Co-Lead Investigator in the Pervasis study. "The biological problem of scarring and abnormal tissue growth is the number one critical issue limiting all types of vascular interventions today, both surgical and catheter-based. The need is most pressing in the dialysis access population, where vessel narrowing leads to a large number of repeat hospitalizations and procedures on a national scale."

He added, "While other approaches, such as gene therapy and drug-eluting devices have been investigated for this problem, Vascugel(TM) is truly novel in that it employs the natural biological properties of human endothelial cells. These cells maintain vascular health by producing a spectrum of activities that could never be duplicated by single or even multiple gene and/or drug therapies. The potential range of Vascugel(TM) is evidenced by the fact that we are treating two fundamentally different types of interventions, both AV grafts and AV fistulas, with these initial trials."

Following the Phase I study of Vascugel(TM), Pervasis will initiate a series of Phase II studies aimed at expanding the clinical indications into multiple programs for different disease states.

About Vascugel(TM)

Vascugel(TM) is a novel allogeneic cell therapy product for enhancing repair and preventing clinical failure of vascular surgery and intervention. Vascugel(TM) builds on concepts of tissue engineering to enable implantation of allogeneic endothelial cells in a controlled state. When wrapped around an injured blood vessel, Vascugel(TM) endothelial cells provide growth regulatory compounds to the underlying blood vessel, promoting a natural healing process and preventing excessive scar tissue formation, inflammation and thrombosis.

About Vascular Access Failure

Vascular access failure is a major complication in providing care to patients on hemodialysis to treat end-stage renal disease (ESRD). The prevalent ESRD population in the U.S. is expected to grow to 1.3 million by 2030. According to Medicare reports, total ESRD costs reached $20.1 billion in 2004 - with total ESRD costs reaching $32.5 billion from all sources.

According to the United States Renal Data System (USRDS), the number of ESRD patients requiring hemodialysis in 2004 reached over 300,000. According to Medicare data, vascular access complications account for up to 25 percent of all hemodialysis patient admissions, leading to about $1.5 billion in annual Medicare expenditures.

About Pervasis Therapeutics, Inc.

Pervasis Therapeutics, Inc. is a pioneer in regenerative cell-based therapies and devices. Pervasis is currently developing technologies to restore natural blood flow to critical organs. The company's flagship product, Vascugel(TM), is a cell-based therapeutic gel currently being developed to help reverse acute vascular injury.

Pervasis' investors include Polaris Venture Partners, Flagship Ventures and Highland Capital Partners. The company was founded by Elazer Edelman, Robert Langer, Joseph Vacanti, and Helen Nugent.

For more information, please visit www.pervasistx.com.

This news release contains certain forward-looking statements that involve risks and uncertainties. Such statements are only predictions and the company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include the timing of clinical trials, the risk that products that appeared promising in early research and clinical trials do not demonstrate safety or efficacy in clinical trials and the risk that the company will not obtain approval to market its products.