Goettingen, Germany/Tel-Aviv, Israel — April 17, 2007: DeveloGen Israel Limited ("DeveloGen"), a wholly owned subsidiary of DeveloGen AG, and Andromeda Biotech Ltd. ("Andromeda"), a newly formed wholly owned subsidiary of Clal Biotechnology Industries Ltd. ("Clal"), today announced that DeveloGen and Andromeda have signed a term sheet for an asset purchase agreement for DeveloGen's DiaPep277® program for the treatment of type 1 diabetes.

Under the terms of the agreement, which is subject to certain closing conditions, DeveloGen will transfer the rights in DiaPep277 to Andromeda. DeveloGen will receive royalties upon commercialisation of DiaPep277 products and Andromeda will have further monetary obligations towards DeveloGen upon the successful completion of key developmental and regulatory milestones prior to commercialisation. It is intended that Andromeda will continue the ongoing phase III study for DiaPep277. The final agreement is expected to be announced within the next 60 days.

"We are very pleased to have Clal as our partner for DiaPep277. Clal has a great track record of backing companies with innovative approaches for the treatment of important diseases," said Carsten Dehning, Chief Financial Officer of DeveloGen. "This partnership is an important step in the ongoing strategic review and refocusing of DeveloGen".

Ruben Krupik, CEO of Clal said: "Type 1 diabetes is a very significant disease that is estimated to affect as many as 3 million people in the US alone. We believe DiaPep277 offers a novel and highly innovative approach to treating this disease which has a major impact on patients' lives and many long-term complications."

For further information please contact:

DeveloGen AG Kathrin Shem-Tov Manager Corporate Affairs Tel: +49 551 50558 525 Fax: +49 551 50558 586 E-mail: info@develogen.com Marie-Curie-Str. 7 37079 Goettingen www.develogen.com

Clal Biotechnology Industries Ltd. Ofer Gonen Vice President 3 Azrieli Center, 45th Floor Tel-Aviv 69411, Israel Phone: +972 3 612 1616 Email: office@arte.co.il

About DiaPep277 and Type 1 Diabetes®

DiaPep277, is a synthetic peptide immunomodulator, which is being developed exclusively by DeveloGen for the treatment of type 1 diabetes. The product is currently in phase III clinical development in a global study being carried out in Europe, South Africa and Israel. In patients with type 1 diabetes the immune system destroys the insulin-producing beta-cells of the pancreas, resulting in diminished and eventually non-existent insulin production and a life-long dependence on exogenous insulin therapy. To date there is no safe and effective way of stopping the immune destruction and curing the disease.

DeveloGen

DeveloGen AG is a biopharmaceutical company engaged in the discovery and development of novel therapeutics for the treatment of metabolic disorders. The Company's most advanced drug candidate DiaPep277® is currently in phase III clinical trial and targets type 1 diabetes in adult and juvenile patients. In addition, DeveloGen has a deep and highly complementary discovery pipeline including novel small molecule insulin sensitizers (type 2 diabetes) and growth factors for beta-cell regeneration (type 1 and type 2 diabetes). DeveloGen is headquartered in Goettingen, Germany with operations in Rehovot, Israel. For more information on DeveloGen, please visit www.develogen.com.

Clal Biotechnology Industries

www.develogen.com. Clal Biotechnology Industries Ltd. (www.cbi.co.il) ("CBI") is an 81% owned subsidiary of Clal Industries and Investments Ltd., the remaining 19% is owned by Teva Pharmaceutical Industries. Founded in 1993, CBI is the leading Israeli investor in the area of life science and is focused on identifying and building biotechnology companies with proprietary biopharmaceutical solutions for unmet clinical needs, a clinical proof of concept and large potential markets. Portfolio companies include: D-Pharm, Mediwound, CureTech, Compugen (Nasdaq:CGEN), NST, Polyheal, Immuno-Designed Molecules (France), and Biokine Therapeutics.