PROTEIN POLYMER AND SPINE WAVE TO BEGIN NEGOTIATIONS ON TERMS FOR COMMERCIAL MANUFACTURING OF SPINAL DISC REPAIR PRODUCT

Spine Wave receives approval in Europe to begin clinical testing
of NuCore™ Injectable Disc Nucleus in surgery for herniated discs

 

SAN DIEGO, July 26, 2004 -- Protein Polymer Technologies, Inc. (OTC BB: PPTI) today announced that its licensee, Spine Wave, Inc., has notified PPTI of its intent to initiate commercial manufacture of NuCore™ Injectable Disc Nucleus (IDN), an injectable protein polymer formulation for repair of spinal discs damaged as a result of injury or aging. Spine Wave recently received approval to begin human clinical testing of NuCore™ IDN in Europe. As a result of the notice, PPTI and Spine Wave will begin negotiations on the terms and conditions for PPTI’s provision of commercial manufacturing services.

NuCore™ IDN, based on PPTI’s patented tissue adhesive technology, is injected as a liquid that quickly cures to a solid hydrogel, with properties similar to the natural disc nucleus material. It has the potential to ultimately be used in a minimally invasive outpatient procedure to intervene early in the disc degeneration process and provide relief from chronic low back pain. Avoiding spinal fusion as a last resort treatment for disc degeneration disease would be of tremendous benefit to patients, since it destroys the natural function and mobility of the spine.

Back pain is the leading cause for healthcare expenditures in the United States. According to spine industry reports, back pain results in more than $50 billion in direct and indirect medical expense. Despite the invasive surgery associated with many spinal procedures, particularly spinal fusion, the worldwide spinal device market represents more than $3 billion in revenues, growing at a rate of over 25% annually.

Spine Wave is a private, venture-funded company formed in 2001 to develop and commercialize PPTI’s technology for spinal and orthopedic applications. Spine Wave contracts with PPTI for certain product development services associated with the technology it has exclusively licensed from PPTI. The license agreement between PPTI and Spine Wave provides for PPTI’s right of first offer to manufacture protein polymers contained in licensed Spine Wave products. PPTI also will receive royalties on the sales of products derived from the licensed rights.

Contacts:

J. Thomas Parmeter, Ph.D. Chairman jtp@ppti.com Protein Polymer Technologies (858) 558-6064

About PPTI and Protein Polymers

Protein polymers are synthetic proteins created “from scratch” through chemical DNA (gene) synthesis and produced in quantity by bacteria through large-scale fermentation. As a result, protein polymers are capable of uniquely combining specified biological, chemical, and physical properties of natural proteins which make up the body’s own tissues, while containing no human or animal components that could potentially transmit or cause disease. They can also be processed into a wide variety of different materials (such as films, fibers, adhesives, and gels), while retaining these properties. PPTI pioneered the development of this technology and now holds 25 U.S. patents on the design, composition of matter, and production of protein polymers, with corresponding international applications in major markets.

Protein Polymer Technologies, Inc. (PPTI), is a San Diego–based company focused on developing products to improve medical and surgical outcomes. From its inception in 1988, PPTI has been a pioneer in protein polymer design and synthesis, developing an extensive portfolio of proprietary biomaterials. In addition to the spinal disc repair product being developed with Spine Wave, PPTI is conducting pilot clinical studies of both a urethral bulking agent for the treatment of stress urinary incontinence and a dermal contouring agent for cosmetic surgery and dermatology. Other targeted products include tissue adhesives and sealants for general surgical use, scaffolds for wound healing and tissue engineering, and depots for local drug delivery.

Safe Harbor

This press release contains forward-looking statements that are based on management’s views and expectations. Actual results could differ materially from those expressed here; further, the Company is not obligated to comment specifically on those differences. Risks associated with the Company’s activities include scientific and product development uncertainties, competitive products and approaches, continuing collaborative partnership interest and funding, regulatory testing and approvals, and manufacturing scale-up. The reader is encouraged to refer to the Company’s 2003 Annual Report on Form 10-KSB, its 2004 quarterly filings on form 10QSB and other recent filings with the Securities and Exchange Commission, copies of which are available from the Company, to further ascertain the risks associated with the above statements.