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DOR BioPharma executes Letter of Intent for acquisition of Gastrotech Pharma

Miami, Florida, 2005-11-02 -- DOR BioPharma, Inc. (AMEX: DOR) (“DOR” or the “Company”), announced today that it has signed a binding letter of intent to acquire Gastrotech Pharma A/S (“Gastrotech”), a private Danish biotechnology company based in Copenhagen, Denmark. Gastrotech develops therapeutics based on peptide hormones to treat cancer and gastrointestinal (GI) diseases and conditions. Gastrotech was founded on technology developed at the Sahlgrenska University Hospital in Sweden which is known as the development cradle of Growth Hormone and IGF-1 research.

Following the close of this acquisition, DOR’s pipeline will be bolstered by the addition of two Phase 2 programs: GTP-010, an analogue of glucagon-like peptide-1 (“GLP-1”), and GTP-200, Gastrotech’s wild type ghrelin compound, a naturally occurring peptide hormone produced in the stomach to stimulate appetite.

GTP-010 is being studied in collaboration with Eli Lilly in a Phase 2, double-blinded, placebo-controlled trial for the treatment of pain associated with irritable bowel syndrome (“IBS”). The product also has application in the treatment of functional dyspepsia. GLP-1 has been shown to reduce the gastrointestinal contractions associated with IBS and other GI disorders.

Preclinical and clinical studies have demonstrated GTP-200’s positive effect on regulation of appetite, food intake, and metabolism. Cancer cachexia is estimated to be a $4 billion market and an unmet medical need affecting 50% of all cancer patients and fatal in 40% of patients. GTP-200 completed patient treatment in a Phase 1/2 clinical trial for the treatment of cancer cachexia in September 2005. Results from this study will be available later this quarter. GTP-200 is also being evaluated for the treatment of gastrectomized patients as well as for several other indications.

In connection with the closing of this acquisition, DOR will issue the stockholders of Gastrotech $9 million in shares of DOR common stock priced at the 10-day volume weighted average price immediately prior to the close of the transaction. In no event will DOR issue less than 20 million or more than 30 million shares of its common stock to Gastrotech’s shareholders. This corresponds to a price collar on the transaction of between $0.30 and $0.45 per share of DOR. In addition, DOR will pay Gastrotech shareholders another $30 million in cash or stock upon the occurrence of a series of developmental, regulatory and commercial milestones, $20 million of which are payable in connection with first product sales of $50 million and $200 million in any calendar year.

The companies intend that the acquisition would include the transfer to DOR of Gastrotech’s ongoing clinical programs as well as all intellectual property and facilities. This acquisition will be concluded pursuant to the execution of definitive documents and must be approved by a majority of DOR BioPharma’s shareholders. BIO-IB LLC, a New York based healthcare investment banking boutique, acted as financial advisor to DOR BioPharma.

Pursuant to the acquisition, DOR intends to maintain an office in Copenhagen, Denmark which will oversee current and planned clinical development efforts of the combined company in Europe. At a later stage, DOR may apply for listing on the Copenhagen Stock Exchange and maintain a dual listing in Denmark and the United States. DOR will file a registration statement covering the new shares issued to Gastrotech after the acquisition is completed. Nordic Biotech, a venture capital firm based in Copenhagen and focused on biotechnology companies in the Nordic region, is Gastrotech’s largest investor and will be subject to a staged lockup period in connection with new DOR shares that it will own.

“We view this acquisition as synergistic with our orBec® program,” stated Michael T. Sember, President and Chief Executive Officer of DOR. “This acquisition will deepen our product pipeline and fortify DOR’s focus on cancer/GI disease

Publisher Contact Information:

Gastrotech Pharma A/S
+45 33 44 42 42

Company profile of Gastrotech Pharma A/S
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