By Rachelle H.B. Fishman

BioWorld International Correspondent

ZICHRON YAAKOV, Israel - XTL Biopharmaceuticals Ltd., the Rehovot-based drug discovery and development company, is preparing to make an initial public offering of shares on the London Stock Exchange using WestLB Panmure Ltd. as sponsor. It would be the first Israeli biotechnology company to list on the London market.

Last month, XTL presented results showing that hepatitis C virus RNA could be detected in serum of a Trimera mouse model - a mouse with a fully human immune system and liver - eight days after the transplantation of ex vivo infected human liver fragments; peak infection rate of 85 percent was reached between 18 and 25 days post-implantation. The system, used to evaluate a human monoclonal antibody (MAb) directed to the HCV envelope protein and another novel anti-HCV agent showed that the MAb could inhibit HCV infection of the human liver tissue, as well as reduce the percentage of HCV-positive animals, two months after challenge.

"The results [at the 10th International Symposium on Viral Hepatitis and Liver Disease in Atlanta] show the value of XTL's Trimera technology as a valid system to accelerate drug discovery, testing and development, and to increase the probability of clinical success by narrowing the selection of drug candidates and by rapidly validating their biological activity in a human system," said Martin Becker, the company's CEO.

The funds raised from the flotation will be used to expand XTL's pipeline of drugs for infectious and other diseases. The company has one product for HBV in Phase I/II clinical trials; in a Phase Ia trial completed in January 2000, the Trimera-tested product was well-tolerated and viral load reduction was demonstrated at higher antibody-to- antigen ratios. A second product, for HCV, is scheduled to enter Phase I/II trials in the second half of 2000.

XTL has co-development agreements with two Nasdaq-listed biopharmas - Hybridon, Inc., and AVI BioPharma,Inc. - and with Eli Lilly and Co. and Hoffman La-Roche to Trimera test products being developed for the treatment of HBV and HCV.

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