RegeneRx Focuses Immediate Clinical Development on Dry Eye Indication with RGN-259, Provides Update on AMI Phase 2 Study

RegeneRx Focuses Immediate Clinical Development on Dry Eye Indication with RGN-259, Provides Update on AMI Phase 2 Study Clinical Hold

RegeneRx Biopharmaceuticals, Inc. (OTC Bulletin Board: RGRX) ("the Company" or "RegeneRx") announced today that it has shifted its near-term clinical development focus to RGN-259, its preservative-free topical eye drop, for the treatment of symptomatic dry eye. This reprioritization of the Company's product pipeline is primarily due to recently announced data supporting the development of RGN-259 for this indication.

In two studies evaluating RGN-259 to treat symptomatic dry eye induced in mice, RGN-259 resulted in statistically significant improvement of corneal healing compared with negative and positive controls. Previous studies in animal models have also shown the ability of RGN-259 to repair the cornea after chemical damage. Following these animal data, and in conjunction with previously reported human clinical data, RegeneRx is expediting its ophthalmic clinical program and is planning a Phase 2 clinical trial in patients with dry eye that will be designed to measure the safety and efficacy of RGN-259 in this indication. This will be in addition to a physician-sponsored clinical trial in patients with dry eye that is currently being supported by RegeneRx in the form of manufacturing and regulatory and clinical guidance.

The Company's decision to refocus its development efforts on dry eye also results from uncertainty caused by the previously announced clinical hold of the Company's Phase 2 clinical trial with its RGN-352 product candidate for patients who have experienced an acute myocardial infarction (AMI), commonly known as heart attack. As previously reported, this trial has been placed on clinical hold by the U.S. Food and Drug Administration (FDA) due to current good manufacturing practice (cGMP) compliance issues at one of the Company's contract manufacturers. While RegeneRx seeks to resolve the compliance issues with the FDA and its manufacturer, the Company cannot predict how long the trial will be on clinical hold. If the FDA were to require re-manufacture of either RGN-352 or placebo for the trial, it would significantly delay enrollment and would require RegeneRx to bear substantial additional cost associated with the trial.

"Because of the new positive data that complement our earlier human and animal ophthalmic data, the relatively short timeframe in which we believe we can generate human dry eye data in a Phase 2 trial, and the significantly reduced cost as compared with the Phase 2 AMI trial, we believe it is in the best interest of the Company and our stockholders to place our highest priority on the clinical development of RGN-259. We are fortunate to have several drug candidates in development and the ability to quickly reprioritize our clinical focus," stated J.J. Finkelstein, RegeneRx's president and chief executive officer.

C. Neil Lyons, RegeneRx's chief financial officer, added, "This reprioritization of our development programs is financially positive. Our cash burn will be substantially reduced and, therefore, so will our future capital requirements. The proposed dry eye trial will be significantly less expensive to conduct compared with the AMI trial due to shorter trial length, fewer and less complex analyses for each patient, and fewer clinical sites."

The FDA's clinical hold on the Phase 2 AMI trial does not affect RGN-259 or any other RegeneRx clinical trial or drug candidate. The hold is limited to cGMP compliance issues related to RGN-352 at a separate contract manufacturing site and is not directed at the safety of RGN-352, the Company's Phase 2 AMI protocol or its clinical development plan.

Conference Call and Webcast

RegeneRx management will hold a conference call to discuss this press release and answer questions at 11:00 a.m. Eastern time on Thursday, April 21. To access the conference call, from the U.S. please dial (866) 900-2647 and from outside the U.S. please dial (706) 758-3362. All listeners should provide the following passcode: 59585417. Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Company's website, www.regenerx.com.

Following the end of the conference call, a telephone replay will be available through April 27, 2011, and can be accessed by dialing (800) 642-1687 from the U.S. or (706) 645-9291 from outside of the U.S. All listeners should provide the following passcode: 59585417. The webcast will be available for 30 days.

About Dry Eye

According to Global Data, an industry market research firm, the world-wide annual market for dry eye disorders was approximately $1.9 billion in 2010 and is estimated to reach $2.8 billion by 2017. The development of dry eyes can have many causes. They include: (1) age - people over age 65 often experience some symptoms of dry eyes; (2) gender - women are more likely to develop dry eyes due to hormonal changes caused by pregnancy, the use of oral contraceptives, and menopause; (3) medications - certain medicines, including antihistamines, decongestants, blood pressure medications and antidepressants; (4) medical conditions - persons with rheumatoid arthritis, diabetes, thyroid problems, Sjögren's syndrome, and lupus are more likely to have symptoms of dry eyes; (5) blepharitis - inflammation of the surfaces of the eye, or the inward or outward turning of eyelids can cause dry eyes to develop; (6) environmental conditions - exposure to smoke, wind and dry climates can increase tear evaporation resulting in dry eye symptoms; (7) other factors - long term use of contact lenses, and refractive eye surgeries, such as LASIK.

About RegeneRx Biopharmaceuticals, Inc.

RegeneRx (www.regenerx.com) is focused on the development of a novel therapeutic peptide, Thymosin beta 4, or Tß4, for tissue and organ protection, repair and regeneration. RegeneRx currently has three drug candidates in clinical development and has an extensive worldwide patent portfolio covering its product candidates.

RGN-259 is a sterile, preservative-free topical eye drop for ophthalmic indications. Based on recent human clinical data, RegeneRx is currently supporting a physician-sponsored Phase 2 dry eye study with RGN-259 and has completed two animal studies showing RGN-259's positive effects on dry eye symptoms. Previously, seven patients with non-healing corneal ulcers were treated with RGN-259 under compassionate use INDs. Five had complete healing and two had substantial healing of their wounds. Three additional patients with corneal defects, called punctate keratitis, had no evidence of healing although they did report reduction in eye inflammation and increased comfort.

RGN-352 is an injectable formulation to treat cardiovascular and central nervous system diseases, as well as other medical indications. RegeneRx has successfully completed a Phase 1 clinical trial with RGN-352 in which the drug candidate was found to be safe and well-tolerated. The Company has initiated a Phase 2 clinical trial at approximately 20 clinical sites in the U.S., Israel, and Russia, although this trial is currently on an FDA-imposed clinical hold. RegeneRx recently received a $3 million, three-year development grant from the NIH to support the company's acute myocardial infarction program.

RGN-137, a topical gel formulation, is currently being evaluated by RegeneRx in a Phase 2 clinical trial for the treatment of the orphan skin disease epidermolysis bullosa. Other potential uses for RGN-137 include the treatment of chronic dermal wounds and reduction of scar tissue.