AGY THERAPEUTICS LICENSES PRODUCT CANDIDATE FROM M'S SCIENCE FOR PHASE 2 CLINICAL DEVELOPMENT
-- Deal Validates AGY's Technology Platform, Which Enabled Discovery of Novel Target for Functional Recovery After Stroke --

SOUTH SAN FRANCISCO, Calif., and KOBE, Japan - July 20, 2004 AGY Therapeutics Inc., a privately held biotechnology company, and M's Science Corporation, a privately held drug discovery and development company, announced today that AGY has obtained from M's Science the exclusive rights to develop and commercialize a sigma receptor agonist compound, AGY-94806, also known as M's Science compound SA4503, which AGY plans to study initially for enhancement of functional recovery after stroke.

Stroke is the third most frequent cause of death in Western countries and the leading cause of serious, long-term disability in the United States. There are approximately 700,000 strokes each year and more than 2.5 million stroke survivors. There currently is no approved drug therapy to enhance recovery of the brain following stroke.

A Phase 1 clinical trial that evaluated AGY-94806 as a potential treatment for depression produced promising safety data. Based on this clinical study and positive preclinical data demonstrating post-stroke recovery activity, AGY plans to begin a Phase 2 clinical trial of AGY-94806 for enhanced functional recovery from stroke by early next year. M's Science currently retains other rights and intends to continue developing AGY-94806 for other central nervous system indications.

"This license agreement is a major milestone event that gives AGY a lead product candidate already tested in humans and an immediate route to the clinic. It also leverages our excellent science and drug discovery capabilities and validates our powerful technology platform, which enabled our discovery of this critical stroke recovery target. This program is the first successful application of a systematic, genomics-based, mechanistic analysis applied to any CNS disease," said Cynthia J. Ladd, president and CEO of AGY Therapeutics. "There currently are no therapies available to enhance long-term functional recovery for stroke patients. With AGY-94806, we have the potential to enable better and faster recovery that, for some patients, could mean the difference between walking or not."

Current approaches to stroke treatment focus on saving neural cells and must be delivered within a very narrow time window to have any benefit. Because AGY-94806 is delivered orally and works by stimulating functional recovery of surviving tissue to compensate for damaged areas, it potentially can be given at any time after a stroke, representing an entirely new approach for treatment of stroke patients.

The agreement also grants AGY development and commercialization rights to AGY-94806 for traumatic brain injury and spinal cord injury, as well as rights to license additional central nervous system indications. The two companies will coordinate worldwide development of a broad range of indications. No financial terms of the deal were disclosed.

About Functional Recovery
Despite improvements in emergency treatments for stroke, many stroke survivors are left with serious functional impairments. It has been estimated that approximately 30% of stroke survivors require some assistance in activities of daily living and about 20% require assistance with mobility. Comprehensive stroke rehabilitation, or functional restoration, may improve functional abilities of stroke survivors, such as walking, and also decrease long-term patient care costs.

About AGY Therapeutics
AGY Therapeutics, a privately-held biotechnology company, is dedicated to discovering and developing breakthrough central nervous system therapeutics, including treatments for stroke, cognitive diseases, schizophrenia and brain tumors. AGY Therapeutics was founded to apply the latest molecular and cellular research techniques to central nervous system diseases. With its proprietary imAGYneTM platform, the company has identified and characterized a vast number of promising drug targets and compounds to treat these diseases.

About M's Science
M's Science is a marketplace-focused drug discovery/development company, headquartered in Kobe, Japan. The company focuses on drug discovery research toward treatments for unmet clinical needs and bringing products to a global market. M's Science's research platform consists of work in two main areas: sigma receptor research, involving disorders to the central nervous system; and herpes simplex virus research, involving novel ways of treating cancerous cells. For more information, visit www.m-sci.net.

For additional information contact:
Kristin Nash
WeissCom Partners
415-302-7951
info@agyinc.com
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