Bio-Path Holdings, Inc. Provides Operations Update and Overview of New Targeting Technology

Business Wire, June 23, 2009

Timeline Updated for Commencement of the Company’s Phase I Clinical Trial and New Liposome Targeting Technology is Discussed

HOUSTON -- Bio-Path Holdings, Inc. (OTCBB: BPTH), a publicly traded biotechnology company with drug development operations in Houston, Texas, issued a news release today in which the Company provided an update of drug development operations and also discussed a new liposome tumor targeting technology that it plans to develop.

Bio-Path is currently developing a neutral lipid-based liposome delivery technology for nucleic acid cancer drugs (including antisense and siRNA molecules). Antisense and siRNA drugs are targeted to block the expression of specific disease-causing proteins while having little or no effect on other healthy tissue. Development of antisense and siRNA, however, has been limited by the lack of a suitable method to deliver these drugs to the diseased cells with high uptake into the cell without causing toxicity. Bio-Path’s currently licensed neutral lipid-based liposome technology was developed to accomplish this, and studies have shown a significant increase in tumor cell uptake with this technology compared to other delivery methods. The Company’s operations to date have focused on initiating a Phase I clinical trial for its lead cancer drug candidate, which potentially could demonstrate that the delivery technology is performing as expected.

After completing three rounds of private placement financings, Bio-Path became a public company through a reverse merger in February 2008 with sufficient funding to initiate drug development operations for a clinical trial in its lead drug compound. The Company subsequently submitted an Investigational New Drug application to the U.S. Food and Drug Administration (FDA) for its lead drug product BP-100-1.01 and began the process of selecting a current Good Manufacturing Practices (cGMP) contract manufacturing firm to manufacture the drug product needed for the clinical trial. In April 2008, the FDA review of the IND application resulted in a hold on the IND pending the Company submitting to the FDA:

• a few minor changes to the protocol for the clinical trial, and
• manufacturing and testing information from the clinical drug batch once it had been manufactured.

None of the requests described above were out of the ordinary or unexpected since the Company had planned to have the clinical drug batch manufactured and the testing information submitted to the FDA prior to commencing the clinical trial. As a result, Bio-Path continued with its operations plan to commence the clinical trial by the end of 2008.

Update to the Clinical Trial Protocol

During the course of reviewing FDA-requested changes to the protocol for the Bio-Path’s Phase I Clinical Trial, the Company and the Principal Investigator (PI) for the trial agreed that the trial should be broadened from treating patients with Chronic Myelogenous Leukemia (CML) to include patients with refractory or relapsed Acute Myeloid Leukemia (AML), Acute Lymphoblastic Leukemia (ALL) and Myelodysplastic Syndrome (MDS). This action was taken to increase the rate of enrollment of patients, which is expected to enable the clinical trial to be completed on a more timely basis. However, the addition of the new disease indications required extensive editing to the protocol by the PI. The changes to the protocol were approved by the hospital’s Institutional Review Board (IRB) and the revised protocol with the FDA-requested changes has been submitted to the FDA.

Development and Testing of the cGMP Drug Batch

After a several month evaluation process, in July 2008 Bio-Path selected a cGMP contract drug manufacturer to develop and manufacture the clinical drug batch. The manufacturer had a significant manufacturing backlog and the timetable to complete manufacturing drug development activities for Bio-Path’s drug including a fill/finish validation and engineering prototype test runs resulted in November 2008 as the projected manufacturing date of the first clinical-grade batch of drug for the clinical trial. As part of the manufacturing development process, Bio-Path transferred its licensed manufacturing technology to the contract drug manufacturer.

Manufacturing problems were encountered during the first engineering prototype run. Additional information was requested by the Company from the licensor of the technology and a second engineering prototype test was conducted in December 2008, which again had problems. At this point, the Company engaged a leading lyophilization expert to work with Bio-Path’s management to develop and finalize a manufacturing procedure. Over the course of the next six months, the Company developed the manufacturing procedures for its liposomal based drug products and in the process, two additional pilot manufacturing runs, a new fill/finish validation run and another engineering prototype test run was performed. As a result of these development activities, cGMP manufacturing procedures were developed and Bio-Path’s lyophilized drug product was able to be manufactured using the Company’s new manufacturing techniques. The difficulties described above can be related to moving from a research laboratory manufacturing process to a fully scaled-up cGMP manufacturing technology.