PhytoMedical and Iowa State University Research Foundation Announce a License Agreement for Novel Synthesized Compounds

Princeton, NJ – June 13, 2006 - PhytoMedical Technologies, Inc. (OTCBB: PYTO) (FWB: ET6), through its wholly owned subsidiary, today announced that it has entered into an exclusive license agreement with Iowa State University Research Foundation Inc. (ISURF) to develop, market and distribute novel synthesized compounds derived from type A-1 polyphenols, which have been linked to insulin sensitivity by lead researcher, Dr. Richard Anderson of the USDA's Agricultural Research Service.

Under terms of the agreement, PhytoMedical paid an upfront license fee to ISURF, and agreed to pay future undisclosed milestone payments. In addition, ISURF will receive royalty payments based on sales. PhytoMedical will administrate the development, regulatory approval and commercialization of the compounds.  Additionally, PhytoMedical will pursue future collaborative arrangements.   

The innovative synthesized type A-1 polyphenols will be developed by PhytoMedical as a new class of compounds for type 2 diabetes. A published study confirmed that these compounds are able to improve insulin sensitivity and reduce blood sugar levels by up to 29%. Additional range of applications for these compounds includes Alzheimer’s, cancer, and cardiovascular disease.  

According to recent study published in Diabetes Care, over 73 million adults now suffer from diabetes or have higher than normal blood sugar levels. At a cost of $132 billion, the overall prevalence of diabetes is now 9.3% of the US population, including 6.5% diagnosed and 2.8% undiagnosed. Diabetes is the sixth leading cause of death, and the leading cause of lower limb amputations. In all cases, insulin function is critical to the treatment of diabetic patients.

In addition to improving insulin function and lowering blood sugar levels, recent research shows that these particular polyphenols also act as antioxidants, guarding the body from the damaging effects of free radicals. Free radicals often contain oxygen and are highly reactive chemicals that may destroy healthy cells and play an active role in many illnesses, including cardiovascular disease and cancer.

Greg Wujek, President and CEO commented: "We are very pleased having entered into this agreement with Iowa State University.  Dr. George Kraus, who led the synthesis project, is a noted expert in the area of compound synthesis.   The development of the synthesized type A-1 polyphenols is leading the way to a new class of compounds.  We are just scratching the surface as the potential application of these compounds is enormous in a diabetes, cancer, Alzheimer’s and cardiovascular disease.”    

About PhytoMedical Technologies, Inc.

PhytoMedical Technologies, Inc. (OTCBB: PYTO; Frankfurt Stock Exchange: ET6), together with its wholly owned subsidiaries, is an early stage research based biopharmaceutical company focused on the identification, acquisition, development and eventual commercialization of innovative plant derived pharmaceutical and nutraceutical compounds targeting cachexia, obesity and diabetes.

An estimated 300 new drugs of world-wide importance, worth over $150 billion, still remain to be discovered amongst the 250,000 species of higher plants found on earth, of which less than 15% have been investigated for bioactive compounds. Presently, twenty of the best selling drugs come from natural sources and 25% of all prescription drugs contain active compounds originally derived from or patterned after compounds derived from plants.

BDC-03 Successful in Increasing Lean Muscle Mass and Reducing Body Fat Percentage

Named BDC-03, PhytoMedical’s first plant derived compound has pharmacologically active elements that have been successful in reducing body fat percentage, increasing lean muscle mass and lowering cholesterol in a study of growing animals.

For obese or overweight individuals, BDC-03’s potential capacity to decrease the deposition of fat and lower cholesterol would be a vitally important therapeutic outcome. However, its prospective ability to induce overall weight gain in the form of lean muscle mass may well be the difference between life and death for individuals suffering from cachexia.

Cachexia, which is characterized by dramatic weight loss, not only of fatty tissue, but also muscle tissue and bone, is among the most devastating and life-threatening aspects of AIDS and cancer. Once the body loses 30% of its lean muscle mass, major organs are affected, resulting in death.

Sadly, cachexia afflicts 25% of all AIDS patients and upwards of 90% of all advanced cancer patients. In fact, half of all cancer related deaths are a result of cachexia, not the cancer itself.

Polyphenolic Compounds Increase Sugar Metabolism by a Factor of 20  

Diabetes, which results from the body’s inability to produce enough insulin or use it efficiently, affects 18.2 million people in the United States, or 6.3% of the population (American Diabetes Association).  The Centers for Disease Control and Prevention expects this number to rise to over 30 million by 2030. As the leading cause of end-stage renal disease, blindness and lower limb amputations, diabetes now costs the health care system over $132 billion each year – nearly one out of every ten health care dollars spent in the United States.

While the causes of diabetes are not entirely clear, it is known that diet plays a key role in the prevention and cure of diabetes.  In fact, research studies have shown that aqueous extracts of the most commonly consumed spice, cinnamon, improves the action of insulin and helps to control risk factors associated with diabetes including, glucose, insulin, cholesterol, triglycerides and related variables.

A study published in Diabetes Care, a journal of the American Diabetes Association, showed that as little as one gram a day of cinnamon – one-fourth of a teaspoon twice a day – can lower blood sugar by an average of 18 to 29 percent, triglycerides (fatty acids in the blood) by 23 to 30 percent, LDL (or “bad”) cholesterol by 7 to 27 percent and total cholesterol by 12 to 26 percent. Changes in HDL (“good”) cholesterol were not significant. Amazingly, the study found that the beneficial effects of cinnamon lasted for at least 20 days after people stopped taking it.

Through a Cooperative Research and Development Agreement, PhytoMedical is working towards synthesizing the active components found in cinnamon and characterizing their beneficial health effects in cell cultures systems, animals and ultimately humans.

At present, the Company does not currently have commercial products intended to diagnose, treat, cure or prevent any disease. The statements contained in this press release regarding our ongoing research and development and the results attained by us to-date have not been evaluated by the Food and Drug Administration.

For additional information, please visit www.PhytoMedical.com  

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