Press Release Gastrotech Acquisition


    
      
        

      

    

     

    DOR
      BioPharma, Inc. 

    1691
      Michigan Avenue

    Miami,
      Florida 33139

    www.dorbiopharma.com

    


    


    DOR
      BioPharma Executes Letter of Intent for 

    Acquisition
      of Gastrotech Pharma

    


    Acquisition
      Bolsters Biotherapeutics Pipeline

    


    Miami,
      FL. November 2, 2005 - 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 research through the acquisition of two clinical-stage
      programs that are complementary to orBec®.
      This
      will enable us to eventually launch other GI focused cancer products as a
      follow-up to our anticipated orBec®
      launch.
      Gastrotech’s senior management team will assume an active role at DOR,
      contributing valuable clinical and regulatory expertise to the DOR team, as
      we
      advance these programs towards commercialization. With regard to GTP-200, we
      view appetite stimulation through supplemental ghrelin hormone therapy to be
      a
      logical approach to the treatment of cancer cachexia. We believe that the
      combination of DOR and Gastrotech will increase our profile in the investment
      community and establish us as a formidable presence in the GI/cancer
      arena.”

    


    In
      connection with the acquisition, Hans Schambye, M.D., Ph.D., currently Chief
      Executive Officer of Gastrotech will become the Chief Operating Office of DOR.
      Dr. Schambye commented, “We are excited to be joining forces with DOR. Our
      pipelines complement each other well and the combined company will have drugs
      in
      every stage of clinical development. orBec®
      is an
      appealing product, which addresses a significant unmet medical need. We are
      impressed with the data package on orBec®
      and look
      forward to working on this and DOR’s other programs.”

    


    Gastrotech’s
      Chairman, Professor Olle Isaksson, M.D., Chairman of the Endocrine Department
      at
      Gothenburg University added, “I believe Gastrotech has what it takes to develop
      successfully as an independent company, but being acquired by DOR is a good
      alternative. The combined company will be stronger than each separate entity
      and
      will have a deep, clinical stage pipeline.”

    


    About
      GTP-200

    


    GTP-200
      is based on ghrelin, a naturally occurring peptide hormone with many important
      physiological activities, including stimulation of growth hormone secretion,
      induction of appetite and modification of metabolism. Ghrelin is primarily
      produced in the stomach and is an extremely potent inducer of appetite and
      food
      intake. We intend to take advantage of these properties and plan to develop
      GTP-200 for the treatment of a number of diseases, including cancer
      cachexia. 

    


    About
      Cancer Cachexia

    


    Cancer
      cachexia is a serious condition characterized by abnormal weight loss, weakness
      and general bodily decline that occurs in many cancer patients. The condition
      is
      a significant factor in the poor performance and high mortality rate of cancer
      patients. Cachectic patients have worse outcomes from surgery, chemotherapy
      and
      radiation therapy. No specific treatment is available for cancer cachexia which
      affects around 1 million patients in the US and Europe at any given
      time.

    


    About
      Irritable Bowel Syndrome

    


    Irritable
      bowel syndrome (IBS) is a chronic, relapsing functional bowel disorder
      characterized by symptoms of pain or discomfort in the digestive tract or
      abdominal wall and abnormality of bowel habit. IBS affects more than 80 million
      people worldwide and pain is among the most dominant symptoms in these patients.
      More than three million patients are estimated to have frequent, severe pain
      attacks but no treatment is currently available for these attacks.

    


    About
      DOR BioPharma, Inc.

    


    DOR
      BioPharma, Inc. is a biopharmaceutical company focused on the development of
      therapeutic products and biomedical countermeasures for areas of unmet medical
      need. Our lead product, orBec®
      (oral
      beclomethasone dipropionate), is a potent, locally-acting corticosteroid being
      developed for the treatment of intestinal Graft-versus-Host disease (iGVHD),
      a
      common serious complication of bone marrow transplantation for cancer, as well
      as other GI disorders characterized by severe inflammation. We plan to file
      a
      new drug application (NDA) with the FDA for orBec®
      for the
      treatment of iGVHD in early 2006. 

    


    Through
      our BioDefense Division, we are developing biomedical countermeasures pursuant
      to the paradigm established by the recently enacted Project BioShield Act of
      2004. Our biodefense products in development are bioengineered vaccines designed
      to protect against the deadly effects of ricin toxin and botulinum toxin, both
      of which are considered serious bioterrorism threats. Our ricin toxin vaccine,
      RiVaxTM,
      has
      completed the clinical portion of its Phase I clinical trial in normal
      volunteers. We have also announced the initiation of a new botulinum toxin
      therapeutic development program based on rational drug design. 

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      Graphic Reference]

    For
      further information regarding DOR BioPharma, please visit the Company's website
      located at http://www.dorbiopharma.com.

     

    


     

    This
      press release contains forward-looking statements, within the meaning of Section
      21E of the Securities Exchange Act of 1934, that reflect DOR BioPharma's current
      expectations about its future results, performance, prospects and opportunities,
      including statements regarding the potential use of orBec® for the treatment of
      iGVHD and the prospects for regulatory filings for orBec®. Where possible, DOR
      BioPharma has tried to identify these forward-looking statements by using words
      such as "anticipates", "believes", "intends", or similar expressions. These
      statements are subject to a number of risks, uncertainties and other factors
      that could cause actual events or results in future periods to differ materially
      from what is expressed in, or implied by, these statements. DOR BioPharma cannot
      assure you that it will be able to successfully develop or commercialize
      products based on its technology, including orBec®, particularly in light of the
      significant uncertainty inherent in developing vaccines against bioterror
      threats, manufacturing and conducting preclinical and clinical trials of
      vaccines, and obtaining regulatory approvals, that its technologies will prove
      to be safe and effective, that its cash expenditures will not exceed projected
      levels, that it will be able to obtain future financing or funds when needed,
      that product development and commercialization efforts will not be reduced
      or
      discontinued due to difficulties or delays in clinical trials or due to lack
      of
      progress or positive results from research and development efforts, that it
      will
      be able to successfully obtain any further grants and awards, maintain its
      existing grants which are subject to performance, enter into any biodefense
      procurement contracts with the U.S. Government or other countries, that it
      will
      be able to patent, register or protect its technology from challenge and
      products from competition or maintain or expand its license agreements with
      its
      current licensors, that it will be able to maintain its listing on the American
      Stock Exchange (“AMEX”) by completing a transaction which will provide it with
      shareholders’ equity of at least $6 million prior to a date set by AMEX for a
      hearing regarding the continued listing on AMEX of Dor BioPharma’s common stock,
      or that its business strategy will be successful. Important factors which may
      affect the future use of orBec® for iGVHD include the risks that: because orBec®
      did not achieve statistical significance in its primary endpoint in the pivotal
      Phase III clinical study (i.e. a p-value of less than or equal to 0.05), the
      FDA
      may not consider orBec® approvable based upon existing studies, orBec® may not
      show therapeutic effect or an acceptable safety profile in future clinical
      trials, if required, or could take a significantly longer time to gain
      regulatory approval than DOR BioPharma expects or may never gain approval;
      Dor
      BioPharma is dependent on the expertise, effort, priorities and contractual
      obligations of third parties in the clinical trials, manufacturing, marketing,
      sales and distribution of its products; or orBec® may not gain market
      acceptance; and others may develop technologies or products superior to orBec®.
      Dor BioPharma’s business strategy has been revised to include the issuance of
      its securities to acquire companies or assets. Dor BioPharma presently is
      involved in negotiations which could result in the issuance of a significant
      number of shares of its equity securities, thereby diluting the equity interests
      of present stockholders. These and other factors are described from time to
      time
      in filings with the Securities and Exchange Commission, including, but not
      limited to, DOR BioPharma's most recent reports on Form 10-QSB and Form 10-KSB.
      DOR BioPharma assumes no obligation to update or revise any forward-looking
      statements as a result of new information, future events, and changes in
      circumstances or for any other reason.

    


    Company
      Contact:     

    Evan
      Myrianthopoulos

    Chief
      Financial Officer 

    (305)
      534-3383     

    www.dorbiopharma.com