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SemBioSys Genetics Inc. (TSX:SBS), a biotechnology company developing a
broad pipeline of protein-based pharmaceuticals and non-pharmaceutical
products, today provided an update on the expected regulatory strategy for
the Company?s plant-produced insulin after a recent meeting with the U.S.
Food and Drug Administration (FDA), January 2007.

The preparatory meeting for the Company?s Investigational New Drug
Application (IND) for plant-produced insulin was scheduled as part of the
normal development process. SemBioSys approached the FDA to confirm the
viability of submitting plant-produced insulin under Section 505(b)(2) of
the Food, Drug, and Cosmetic Act in order to achieve approval for a New Drug
Application.

?Based on the discussions with the FDA and the agreed upon minutes from the
meeting we will continue to pursue a 505(b)(2) regulatory path for our
plant-produced insulin,? said Andrew Baum, President and CEO of SemBioSys
Genetics Inc. ?When we completed our initial public offering in 2004, the
regulatory path for follow-on proteins remained relatively uncertain.
Insulin is a comparatively simple protein for which an extensive amount of
clinical data on safety and efficacy already exists. Providing that our
plant-produced insulin is sufficiently pure and clinically equivalent to
commercially available insulin, the meeting confirmed the 505(b)(2)
regulatory approach is an appropriate path for approval. During our
discussion with the Agency we also established that there were no issues
precluding the use of safflower as a production vehicle. Now that the
regulatory path for our safflower-produced insulin candidate is established,
another element of risk has been removed from our development plan.?

In July 2006, SemBioSys exceeded its targeted levels of insulin expression
in safflower, the Company?s commercial crop system, by achieving 1.2 percent
insulin accumulation of total seed protein. In November, the Company
announced that it had executed a preclinical and early stage clinical
manufacturing supply agreement with Cangene Corporation. SemBioSys expects
to receive in vivo and in vitro biochemical and functional equivalence
results comparing insulin produced from safflower to commercial insulin
products early in 2007. The biochemical and functional equivalence results
together with additional preclinical work underway will form the basis of
SemBioSys? IND which it expects to submit to the FDA in the fourth quarter
of 2007. SemBioSys intends to initiate a Phase II trial of
safflower-produced insulin in late 2007 or early 2008 with pharmacokinetics
and pharmacodynamics as the primary endpoints.

Demand for insulin for the treatment of diabetes reached an estimated 5,500
kilograms in 2005 and is projected to increase to 16,000 kilograms by 2012.
SemBioSys believes its safflower-produced insulin can reduce capital costs
compared to existing insulin manufacturing by 70% and product costs by 40%
or more. In addition, because of the ease in scaling-up crop acreage,
plant-produced insulin offers significant improvements in the flexibility
and speed of scale-up.

About 505(b)(2) Application
An application submitted under section 505(b)(2) of the Food, Drug, and
Cosmetic Act comprises an application for approval for a drug for which one
or more of the investigations relied on by the applicant were not conducted
by or for the applicant and for which the applicant has not obtained a right
of reference or use from the sponsor applicant by or for whom the
investigations were conducted. The 505(b)(2) pathway is intended to
encourage innovation in drug development without requiring duplicative
studies to demonstrate what is already known about a drug while protecting
the patent and exclusivity rights for the approved drug. Eliminating the
need to conduct certain duplicative clinical studies can reduce the number
of clinical studies, number of human patients and/or clinical timelines in
comparison to the clinical program required. An example of a 505(b)(2) is a
naturally derived or recombinant active ingredient application for a drug
product containing an active ingredient(s) derived from animal or botanical
sources or recombinant technology where clinical investigations are
necessary to show that the active ingredient is the same as an active
ingredient in a listed drug.

About SemBioSys Genetics Inc. (www.sembiosys.com)

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