EAGAN, Minn. — January 31, 2002 -- Biopolymer Engineering, Inc., a leading biotechnology company in the field of complex carbohydrates, announced today the completion of its acquisition of more than 100 U.S. and international patents relating to soluble and insoluble Beta 1,3 Glucans from The Collaborative Group, Ltd. of New York. Terms were not disclosed.

The acquisition, along with its existing patents, provides Biopolymer Engineering with a significant intellectual property position relating to yeast beta glucan, a carbohydrate biopolymer. These patents cover composition, manufacturing and applications in pharmaceuticals, dietary supplements, cosmetics, and pet foods.

“Beta glucan has tremendous potential as an immunomodulator as both a nutritional supplement and as a pharmaceutical,” said Richard G. Mueller, Biopolymer Engineering President and Chief Executive Officer. “These beta glucan patents are an excellent fit with our technology platform of complex carbohydrates, which we will use to develop a wide range of product applications.”

Numerous animal and human studies have demonstrated the efficacy of beta glucan in:

• Preventing and fighting post-surgical infections, antibiotic-resistant infections and sepsis.

• Treating cardiovascular disease, lowering cholesterol and reversing arteriosclerosis.

• Stimulating the immune system to destroy cancer cells.

• Speeding tissue regeneration and repair, particularly stimulating wound healing of diabetic and venous stasis ulcers.

Enhancing the formation of white blood cells (hematopoiesis) in patients undergoing radiation and chemotherapy or recovering from bone marrow transplants.

• Creating targeted drug- and antigen-delivering systems.

Beta glucan works to stimulate the two main components of the body's immune system, the innate and the acquired immune systems. In the innate immune system, beta glucan binds with the macrophages, a type of white blood cell whose job is to detect bacteria, viruses and other pathogens and coordinate the body's defenses against them. When activated by beta glucan, macrophages have an increased ability to identify and destroy foreigner intruders. After devouring pathogens through a process called phagocytosis, the macrophages then communicate the intruder's presence to the body's other defenders. Research shows that macrophages fortified by beta glucan are better able to rally the body's defenses.

Now the acquired immune system joins the fight. Using the information transmitted from the macrophages, the acquired immune system learns to manufacture other killer cells and blood factors designed to defend against a specific attack. These include B-cells, which produce antibodies and killer T-cells. The antibodies, working with the innate immune system, destroy foreigners and bind them into clusters, which are then engulfed by macrophages. This is how the body rids itself of infection and disease.

Biopolymer Engineering reached an agreement to acquire the beta glucan patents from The Collaborative Group in February 2001. The Collaborative Group had previously acquired the patent portfolio from Alpha Beta Technology, Inc., which was founded to exploit beta glucan technology originally developed at the Massachusetts Institute of Technology.

Alpha Beta was developing several pharmaceutical products, including Betafectin®, which stimulates the innate anti-fungal immune mechanisms to fight a range of pathogenic challenges, such as bacterial infections and cancer. Phase II studies showed evidence of a synergistic effect between Betafectin and antibiotics in the treatment of resistant bacterial infections. However, Alpha Beta went out of business before it could successfully complete Phase III clinical testing.

“Alpha Beta failed for clinical trial design and business reasons, but the science of beta glucan was successful,” said Dr. Gary Ostroff, Vice President for Research and Development at Biopolymer Engineering and the former head of research at Alpha Beta Technology. “We are highly confident that we can develop a number of applications with this beta glucan technology.”

Biopolymer Engineering, Inc. is a privately held biotechnology company that engineers complex carbohydrates for a wide range of therapeutic, diagnostic and industrial applications, from strengthening the human immune system and fighting disease to formulating cosmetics and purifying water.