Medgenics to commence EPODURE Biopumps Phase IIa study in ESRD-related anemia

Medgenics, Inc. (NYSE Amex: MDGN and AIM: MEDU, MEDG), the developer of a novel technology for the sustained production and delivery of therapeutic proteins in patients using their own tissue, today announced receipt of clearance from the Israeli Ministry of Health to initiate a Phase IIa clinical study evaluating the safety and efficacy of sustained erythropoietin ("EPO") therapy produced and delivered by the Company's EPODURE™ Biopumps™. The study will assess EPODURE's ability to replace months of routine EPO injections for the treatment of anemia in patients with end-stage renal disease ("ESRD" or "kidney failure") who are on dialysis.

EPODURE is an autologous dermal Biopump, a small tissue implant made from the patient's own dermal (skin) tissue, processed to enable it to continuously produce EPO. EPODURE Biopumps are subsequently implanted subcutaneously into the patient to provide continuous delivery of EPO.

"Our EPODURE Biopump technology offers potential advantage over current therapy because it enables patients to continuously produce and deliver their own EPO within the normal physiological range. Sustained delivery of EPO is expected to help keep hemoglobin within the target range to reduce the risks of hemoglobin variability, while avoiding the possible risks posed by EPO concentrations many times the normal physiological range, as observed with EPO administrations. EPODURE could potentially be a safer anemia management tool. Additionally, the cost benefits for the management of anemia could be highly significant," said Andrew L. Pearlman, Ph.D., President and Chief Executive Officer of Medgenics.

This open-label Phase IIa study will enroll up to 20 dialysis patients with anemia due to ESRD who have been receiving routine EPO injections three times per week. Each patient will receive an individually targeted initial dose of EPODURE Biopumps designed to produce levels of EPO that would replace the routine EPO injections over a period of 4-12 months. The EPODURE dose may be adjusted if needed by adding or removing Biopumps, emulating the standard care, dose adjustments, currently made with injected EPO. The study's objective is to maintain hemoglobin levels within the desired therapeutic range without the need for EPO injections. The study will be conducted at the Tel Aviv Sourasky Medical Center by principal investigator Doron Schwartz, M.D., Head of the Center's Nephrology Department. The Ministry of Health has approved the Company's commencement of the recruitment and treatment of patients, subject to a follow-up safety review on June 19, 2012, similar to the protocol followed in the Phase I/II pre-dialysis study.

Dr. Pearlman continued, "We are pleased to have been cleared to initiate this Phase IIa study in dialysis patients, which we expect will build on the positive clinical results from our earlier Phase I/II study of EPODURE to treat pre-dialysis patients with chronic kidney disease. This is the first clinical study that will permit adjustment of the EPODURE dose based on patients' needs as is currently done in standard EPO treatment, and will be standard in future EPODURE use. This represents a significant change from the fixed-dose study we previously conducted in pre-dialysis patients.

"This is the second EPODURE study to be approved by Israel's regulatory agency and will be conducted at the same medical center, with the same principal investigator as our previous study. We believe this indicates growing confidence with the EPODURE Biopump in the treatment of anemia, and supports our clinical strategy. As ESRD patients represent the largest market segment in renal anemia, we look forward to initiating our first clinical trial in dialysis patients and are confident that the Phase IIa study results will affirm the positive data from our study of EPODURE in pre-dialysis patients demonstrated that a single administration can raise and maintain hemoglobin levels for many months without any injections of EPO or other erythropoietin stimulating agents ("ESAs"). In parallel with this new Phase IIa trial in Israel, we are on track to file an Investigational New Drug application for a larger Phase IIb trial in the U.S. and, subject to U.S. Food and Drug Administration approval, look forward to obtaining clearance for that trial later this year," concluded Dr. Pearlman.