Proteo Biotech AG/Proteo Inc.: Anti-Inflammatory Agent 'Elafin' Has Been Successfully Tested in a Phase I Clinical Trial.

In the course of the last few weeks, Elafin has been tested on 32healthy male volunteers at the Institut fuer Klinische Pharmakologiein Kiel, Germany. All intravenously applied doses were well tolerated.No severe adverse events occurred. Birge Bargmann, CEO of ProteoBiotech AG stated: "The successful conclusion of this trialdemonstrates that the therapeutic use of proteins of human origin forthese therapeutic purposes is associated with good tolerability. Forfurther development of Elafin, we see a range of indications in thearea of inflammatory diseases, particularly in circulatory and lungdisorders."

Proteo owns the rights for the production and exploitation ofrecombinant Elafin. This protein was discovered at the Department ofDermatology of Kiel University, Germany. In humans it is produced inthe skin, lungs and mammary glands and protects the Elafin producingcells from destruction by the immune system. Some organs, particularlymuscles and blood vessels, do not express Elafin and are thus moresusceptible to immune attack. Elafin's ability to block the enzymeselastase and proteinase 3, both of which are involved in tissue damageduring inflammatory reactions, makes this protein a promising agentfor the treatment of inflammatory lung disorders or severe reperfusioninjury occurring after heart attacks, woundings or organtransplantations.

About Proteo

Proteo Biotech AG researches, develops and markets substances forbiological and medical research as well as for use as pharmaceuticals.The main focus lies in the development and up-scaling of productionmethods for active agents in inflammation research. The company wasfounded in Germany in April 2000 and in November of the same yearbecame a wholly owned subsidiary of Proteo Inc., Irvine. Proteo Inc.intends to out license selected indications and to establish strategicalliances in the development of new applications as well as inmarketing.

Forward-Looking Statements

Certain statements in this news release may containforward-looking information within the meaning of Rule 175 under theSecurities Act of 1933 and Rule 3b-6 under the Securities Exchange Actof 1934, and are subject to the safe harbor created by those rules.All statements, other than statements of fact included in thisrelease, including, without limitation, statements regarding potentialfuture plans and objectives of the company, are forward-lookingstatements that involve risks and uncertainties. There can be noassurance that such statements will prove to be accurate and actualresults and future events could differ materially from thoseanticipated in such statements. Technical complications that may arisecould prevent the prompt implementation of any strategicallysignificant plan(s) outlined above. The company cautions that theseforward looking statements and risks and uncertainties involved arefurther qualified by other factors including, but not limited to thoseset forth in the company's Form 10-KSB filing and other filings withthe United States Securities and Exchange Commission. The companyundertakes no obligation to publicly update or revise any statementsin this release, whether as a result of new information, future eventsor otherwise.Further information: www.proteo.de