Research Update

EpiStem Holdings plc
20 September 2007




For release: 20 September 2007

 EpiStem Successfully Complete First Year Of Mucositis Tests For NIH Biodefence
                                   Programme



(Manchester, UK) EpiStem (LSE:EHP) announced today that it has completed the
first year of mucositis efficacy-testing services for potential biodefense
drugs, and are about to embark upon an extensive drug screening programme over
the coming year.

The National Institutes of Health (NIH) Medical Countermeasures against
Radiological and Nuclear Threats (MCART) programme leads the U.S. effort to
develop treatments for radiation sickness following a nuclear terrorist attack.
EpiStem is a major provider of services to identify novel drugs that can improve
the repair of the gastrointestinal (GI) tract following exposure to irradiation.
  There are currently no medications approved by the FDA to treat this syndrome.
  EpiStem is an established provider of similar GI assays for oncology
supportive care.  These assays provide quantitative and mechanistic data to
assess the efficacy of novel drug candidates, enabling companies to make
informed decisions regarding the progression of their preclinical pipeline.

Dr Tom MacVittie, who co-ordinates the programme at the University of Maryland
School of Medicine said: 'Gastrointestinal acute radiation syndrome (GI-ARS) is
a massive, currently untreatable, problem following high-dose radiation
exposure. Agents that mitigate these effects could reduce sickness and hopefully
prevent fatalities.  The tests performed by EpiStem are also likely to identify
agents with oncology supportive care applications - agents that will reduce the
severe ulceration and diarrhoea (mucositis) experienced by patients during
radio- and chemo-therapy'.

Dr Catherine Booth, head of EpiStem's contract research division commented: '
After completion of a series of validatory assays, initial studies on first
three test drugs have successfully been completed, with approx 10 more with an
estimated value of US$0.75m revenue for the Company in the pipeline for the
coming year. The programme is forecast to extend over the next 3 years. EpiStem
is also now working to gain GLP compliance for the next phase of the project, in
order to help the consortium develop drugs for FDA approval in future years'.

Other members of the Consortium include the University of Maryland, Baltimore,
the University of Illinois at Chicago, Indiana University at Indianapolis, the
Armed Forces Radiobiology Research Institute at Bethesda, Fast Track Drugs and
Biologics LLC, Aotech, LLC, and Information Management Consultants, Inc.



For more information please contact:

Matthew Walls
Chief Executive Officer - EpiStem Ltd                 [phone]

Mike Wort, Anna Dunphy
MC Bio-Communications Limited                         [phone]

Thilo Hoffmann
Landsbanki Securities (UK) Limited                    [phone]




Additional Information



EpiStem is a biotechnology company commercialising adult stem cells in the areas
of oncology and gastrointestinal diseases as well as cosmeceutical applications.
EpiStem develops innovative therapeutics and diagnostic biomarkers and provides
contract research services to drug development companies. The Group's expertise
is focused on the regulation of adult stem cells located in epithelial tissue,
which includes the gastrointestinal tract, skin, hair follicles, breast and
prostate. EpiStem does not conduct research in the areas of embryonic stem cells
or stem cell transplantation.

EpiStem operates two distinct business divisions, Contract Research Services and
Novel Therapies.



Contract Research Services

Contract Research Services provides specialised preclinical efficacy testing
primarily for drug development companies on a fee for service basis. This
division on a standalone basis is cash generative and profitable with a
five-year track record of providing testing services to over 72 international
company clients primarily in Europe and the United States.



Novel Therapies

Novel Therapies is focused on developing its own innovative therapeutics and
diagnostic biomarkers. Through its discovery platform, Novel Therapies has
identified 250 potential drug candidates, of which a subset will undergo further
evaluation as stem cell regulators for the Group's emerging drug development
pipeline. Novel Therapies is also developing its clinical diagnostic biomarker
technology.



Combined Business Model

The Group is exploiting its combined business model to advance its own
therapeutic candidates to late preclinical stage development. The business model
integrates the discovery efforts of Novel Therapies with the efficacy testing
assays of its Contract Research Services Division, to identify and characterise
new drug candidates. Revenues generated by Contract Research Services will
assist in offsetting Novel Therapies' investment requirements for the discovery
and development of therapeutics. In February 2007, EpiStem licensed its first
drug candidate to a clinical development company. With the validation of the
Novel Therapies discovery platform and the achievement of discovery milestones,
the Directors believe that additional licensing partnerships will be forthcoming
for therapeutics, diagnostics and cosmeceuticals starting in 2008.




                      This information is provided by RNS
            The company news service from the London Stock Exchange