Healthcare Industry News:  Diabetic Foot Ulcer 

Regenerative Medicine

 News Release - August 3, 2006

Ortec's FDA Approved Cell Line Plays Pivotal Role in Creation of First Embryonic Stem Cell Lines Fit for Human Clinical Trials

NEW YORK, Aug. 3 (HSMN NewsFeed) -- Ortec International, Inc. (OTC Bulletin Board: OTCI ), a company focused on advancing regenerative medicine through the development of cellular technology and advanced biomaterial products, announced today that their collaboration with ES Cell International Pte, Ltd. (ESI), established in April 2004 in connection with the development of ESI's human embryonic stem cell (hESC) derived cell therapy products, has yielded its first significant milestone.

ESI recently announced that it has produced and stored what it believes to be the first clinically compliant human embryonic stem cell lines. These cell lines were derived using feeder cells from viral-tested human cells rather than mouse cells, and, therefore, should be able to be used in human clinical trials to develop novel stem-cell therapies.

The feeder cells used by ESI in developing these cell lines were manufactured by Ortec and are FDA approved and manufactured under Good Manufacturing Practices (cGMP). Ortec is one of the few companies that has ever received FDA approval to use allogeneic cell lines (derived from third party donor cells) for cell therapy. Ortec produces, develops, and manufactures cell lines for use in OrCelŪ, its cellular product for accelerated skin regeneration in chronic and acute wounds.

Under the terms of the April 2004 agreement, ESI paid Ortec upfront payments for the right to use one of Ortec's cell lines. Ortec is entitled to receive future payments on the achievement of milestones in ESI's human ES cell derived cell therapy programs, as well as payment of royalties for future commercial sales of ESI's cell therapy products.

Ron Lipstein, Vice Chairman and CEO of Ortec, said, "We are glad that our FDA approved cell line has so significantly contributed to the achievement of ESI's important milestone towards the goal of development of new cell therapies."

About Ortec International, Inc.

Ortec International, Inc. (OTC Bulletin Board: OTCI ) is a company focused on advancing regenerative medicine and stem cell therapy through the development and commercialization of innovative products by combining advanced cell technology and advanced biomaterials. Ortec's lead product is OrCelŪ (Bilayered Cellular Matrix). Ortec's current focus is the application of OrCelŪ to heal chronic and acute wounds. OrCelŪ is composed of a collagen sponge seeded with allogeneic epidermal and dermal cells. These cells secrete growth factors and cytokines normally found in acute human wounds and are believed to have a beneficial role in promoting tissue repair.

A pivotal clinical trial evaluating a cryopreserved version of OrCelŪ in the treatment of venous leg ulcers has been completed and a Pre Market Approval (PMA) application has been filed. Ortec has recently completed patient enrollment in a confirmatory trial and the data from this trial are expected to be integrated with the results of the pivotal clinical trial and submitted as a clinical supplement to its PMA filing. Ortec has already obtained FDA approvals for use of a non-frozen version of OrCelŪ in the treatment of Epidermolysis Bullosa and donor sites in burn patients. In addition, the FDA has granted Ortec approval to initiate a pivotal (Phase III) trial evaluating OrCelŪ for the treatment of Diabetic Foot Ulcers.

Ortec recently acquired two fibrin derived advanced biomaterial technologies, Fibrin MB and Haptides(TM). Fibrin MB has the potential to play a significant role in advancing stem cell therapy having demonstrated the ability to efficiently recover adult stem cells and allow for their growth, differentiation, and potential reimplantation into the patient. Haptides(TM) utilize proprietary synthetic peptides that mimic the mechanism of cell attachment to fibrin. These peptides have demonstrated the ability to significantly enhance cell attraction and attachment providing the potential to use Haptides(TM) in the development of product opportunities applicable to the cosmetic tissue augmentation, wound healing, orthopedics, and drug delivery markets.

About ES Cell International Pte, Ltd.

ESI is a regenerative medicine company that is driving the revolutionary use of stem cells to cure major degenerative diseases, and a world leading provider of products and technologies derived from human embryonic stem cells. The company owns six of the 21 hESC cell lines currently listed on the US National Institute of Health (NIH) Stem Cell Registry. ESI has assembled a world-class management and scientific team to best capitalize on the opportunities that will emerge from hESC cell technology, and generate value for ESI.

ESI is concentrating its therapeutic development resources on generating cell replacement therapies for insulin-dependent diabetes and cardiovascular diseases, areas of significant unmet clinical need and considerable commercial opportunity.

ESI is housed at the Biopolis in Singapore, Asia's biomedical sciences R&D hub. More information about ESI is available at http://www.escellinternational.com .

This news release may contain "forward-looking statements" for the purposes of the United States Securities and Exchange Commission's "safe harbor" provisions under the Private Securities Litigation Reform Act of 1995 and Rule 3B-6 under The Exchange Act. Without limitation, statements regarding expected FDA approvals, clinical trial results, product performance, expectations with respect to sales, gross margins, research and development expenditures, earnings per share, capital expenditures, collaborations, or other expansion opportunities would be "forward-looking statements." These statements may be identified by words such as "expects", "anticipates", "intends", "estimates", "believes" or similar expressions in connection with any discussion of future financial and operating performance. The forward- looking statements contained herein involve risks and uncertainties that may cause results to differ materially from the Company's expectations including but not limited to, global economic trends, competitive pricing or product developments, government legislation and/or regulations, technology, manufacturing, legal and patent issues, suppliers, capital availability, personnel changes, cancellation or delays in renewal of contracts, and lack of suitable raw materials or packaging materials. Investors are cautioned to review risk factors in the Company's filings with the United States Securities and Exchange Commission.



Source: Ortec International

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