Company Profile

Epistem is a biotechnology company commercialising adult stem cells in the areas of oncology and gastrointestinal diseases as well as cosmeceutical applications. Epistem develops innovative therapeutics and diagnostic biomarkers and provides contract research services to drug development companies. The Group's expertise is focused on the regulation of adult stem cells located in epithelial tissue, which includes the gastrointestinal tract, skin, hair follicles, breast and prostate. Epistem does not conduct research in the areas of embryonic stem cells or stem cell transplantation.

Epistem operates three distinct business divisions, Contract Research Services, Biomarkers and Novel Therapies.

Contract Research Services
Contract Research Services provides specialised preclinical efficacy testing primarily for drug development companies on a fee for service basis. This division on a standalone basis is cash generative and profitable, with an established track record of providing testing services to over 90 company clients globally, but primarily in Europe and the United States.

Biomarkers  
The emerging biomarker technology leverages the Company's knowledge of the behaviour of epithelial cells and drug-induced gene expression change to measure drug effects during treatment.  Changes in gene expression can be detected within hours and at low levels of chemotherapy or radiation. The highly sensitive Biomarker technology is based on using mRNA extracted from the bulb of cells at the base of a single hair follicle as a minimally invasive process to measure gene expression changes in epithelial tissue.

Novel Therapies
Novel Therapies is focused on developing its own innovative therapeutics to late preclinical stage development.  Through its discovery platform, Novel Therapies has identified 250 potential drug candidates, of which a subset will undergo further evaluation as stem cell regulators for the Group's emerging drug development pipeline.

Combined Business Model
The Company is exploiting its combined business model to advance its own therapeutic candidates to late preclinical stage development. The business model integrates the discovery efforts of Novel Therapies with the efficacy testing assays of its Contract Research Services Division, to identify and characterise new drug candidates. Revenues generated by Contract Research Services will assist in offsetting Novel Therapies' investment requirements for the discovery and development of therapeutics.

With the validation of the Novel Therapies discovery platform and the achievement of discovery milestones, the Directors believe that additional licensing partnerships will be forthcoming for therapeutics, diagnostics and dermatologicals starting in 2008.