Jennerex and Green Cross Enter Agreement to Develop and Commercialize JX-594 In South Korea

AGREEMENT ADVANCES JENNEREX PRODUCT JX-594 DEVELOPMENT FOR THE TREATMENT OF CANCER

San Francisco, California/Ottawa, Canada - October 17, 2006 -
Jennerex Biotherapeutics today announced an agreement with Green Cross Corp., South Korea for the development and commercialization in Korea of JX-594, an oncolytic vaccinia virus for the treatment of hepatocellular carcinoma (liver cancer) as the initial indication.

Under the terms of this agreement, Green Cross will fund all development, regulatory, manufacturing and commercialization activities in South Korea for JX-594 and will pay Jennerex a royalty on commercial sales in South Korea. As part of the agreement, Jennerex is responsible for the clinical supply of JX-594 and Green Cross will have options to manufacture JX-594 to the South Korean market.

"We are delighted to have Green Cross as our partner to pursue development of JX-594 in South Korea. With their strong commitment to this program and their extensive experience with vaccines and biologics, Green Cross is an ideal partner for the development and commercialization of JX-594 in Korea," said David H. Kirn, MD, CEO of Jennerex. "This partnership is a strong validation of our oncolytic virus product platform and our clinical trial results to date with JX-594. The results of these studies in South Korea will be very important for our global development and commercialization strategies for JX-594."

About JX-594

JX-594 is an oncolytic virus, a new class of cancer therapeutics that utilizes a novel mechanism of action which is expected to be effective against cancers resistant to conventional surgery, radiotherapy and chemotherapy. JX-594 is a vaccinia virus that has been engineered to infect, multiply in and kill cancer cells while leaving neighboring healthy cells unharmed. In addition to direct killing of cancer cells by viral replication, JX-594 expresses a transgene GM-CSF which stimulates the immune system to recognize and destroy the cancer cells, thereby, attacking tumors through multiple mechanisms of action. The results of a Phase I study for treatment of metastatic melanoma showed good tolerability and evidence of anti-tumor effects. A further Phase I study is currently underway in South Korea for treatment of liver cancer and a Phase II study is planned for the treatment of melanoma.

About Jennerex Jennerex is a clinical stage company focused on creation and development of oncolytic virotherapeutics, a new treatment product class to prolong the lives of cancer patients. Jennerex therapeutic oncolytic ("onco", cancer; "lytic", cell destruction) viruses preferentially replicate in and kill cancer cells without harming the surrounding normal cells by targeting pathways that are critical to the vast majority of human cancers (e.g. lung, colon, prostate, breast, pancreas, etc.). Jennerex current clinical product candidates are recombinant vaccinia viruses, with the lead product, JX-594, in a Phase I/II study to treat liver cancer or metastatic cancer to the liver. Two additional products (JX-963 and JX-929) are scheduled to enter Phase I studies in Q4 2006 and Q1 2007, respectively. Jennerex also has an extensive research program to generate new clinical candidates. For more information about Jennerex, please visit www.jennerex.com.

About Green Cross Corporation

Green Cross is a leader in the Korean biotechnology and pharmaceutical industries. With the belief that research and development is essential, Green Cross is fully committed to the development of new medicines, annually reinvesting about 7% of the company's total sales revenue back into R&D;, one of the largest commitments by a pharmaceutical company in South Korea. Green Cross will become the only seasonal influenza vaccine manufacturer in South Korea and also is developing avian influenza vaccine. Green Cross uses its productive discovery engine to develop important therapeutics, including one of the earliest vaccines against hepatitis B (Hepavax). Through agreements with the World Health Organization and UNICEF, Hepavax is available in 60 countries, making it the most widely used hepatitis B vaccine in the world. The use of Hepavax is, in fact, responsible for a 50% drop in the rate of infection in South Korea. Additionally, Green Cross has successfully developed the first Epidemic Hemorrhagic Fever vaccine, the world's second chicken pox vaccine and Korea's first AIDS diagnostic reagent. Building on its strong tradition, Green Cross is dedicated to developing therapeutics to improve the lives of patients worldwide.

Forward-looking statements

This press release contains forward-looking statements that involve risks and uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements. These forward-looking statements reflect our current views with respect to future events and are based on assumptions and are subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements are not guarantees for future performance, and you should not place undue reliance on these forward-looking statements. Some of the factors that could affect the forward-looking statements contained herein include, not being able to enroll the required number of subjects in planned clinical trials and that such clinical trials are not successfully completed, not receiving the required regulatory clearances from the FDA or the KFDA, not being able to generate positive results from clinical studies, our licensee not being able to continue future development of JX-594, not being able to receive royalty payments from Green Cross or any other benefit from the agreement with Green Cross, and that we may not have sufficient cash to continue funding the development or manufacture of our products.

Contact:

Jennerex Biotherapeutics, ULC
Helena Chaye
VP, Business Development
Office: 415-281-8886 ext 829
Mobile: 415-420-9284
Email: [email protected]