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Hollis-Eden Pharmaceuticals Presents Additional Positive Data with Drug Candidate HE3286 in Model of Rheumatoid Arthritis

Novel Steroid's Anti-Inflammatory Activity Linked to Regulation of NF-kappaB and Increase of Treg Cells

SAN DIEGO--(BUSINESS WIRE)--Nov. 30, 2006--Hollis-Eden Pharmaceuticals, Inc. (NASDAQ:HEPH) is presenting new data this week on an experimental drug candidate, HE3286, an orally active novel synthetic steroid hormone. Highlights from the presentation include findings demonstrating HE3286 had a dramatic benefit in a rodent model of rheumatoid arthritis. In a collagen-induced arthritis model (CIA), HE3286, when compared to placebo, significantly reduced the severity of disease and decreased disease over the course of the study. Moreover, histological analysis of joint tissue conducted at the end of the study indicated a marked reduction of tissue damage in the HE3286-treated animals compared to placebo. The findings are being presented this week in a series of oral presentations at the Fifth International Congress on Autoimmune Diseases being held in Sorrento, Italy.

The Company also is presenting further in vivo and in vitro data elucidating potential mechanisms of action for HE3286 that include regulation of NF-kappaB and increasing the production of regulatory T cells (Treg cells). NF-kappaB is a well-known transcription regulator that controls the production of inflammatory cytokines such as TNF-alpha and Interferon-gamma. Treg cells are referred to in the scientific literature as the peacekeepers of the body. Their role is to keep the immune system from attacking the body itself. Recent studies of Treg cells indicate that they may play a broader role than simply preventing autoimmune conditions. The medical literature is now suggesting that the manipulations of these cells could offer new treatments for conditions ranging from diabetes to organ rejection. At a previous scientific meeting the Company presented preclinical data demonstrating HE3286 improved glucose tolerance in a model of early insulin resistant type-II diabetes. The benefits in this model of diabetes were also believed to be attributable to the regulation of the NF-kappaB pathway and the increase in Treg cells.

Additional preclinical data presented at the conference demonstrate that HE3286 avoided unwanted side effects of immune suppression when compared to dexamethasone in well-established animal models. In a separate presentation, the Company also showed data suggesting that a newly identified subclass of compounds may potentially provide benefit to patients with various other autoimmune diseases, including multiple sclerosis. Preliminary studies suggest these compounds provided benefit in the SJL female mouse model of EAE, a widely used animal model of multiple sclerosis. Moreover, these compounds are highly potent at reducing inflammation in mouse models of LPS induced shock, regulating both NF-kappaB activation and levels of pro-inflammatory cytokines such as TNF-alpha.

"What was striking about these findings in the CIA animal model," said Dr. Halina Offner, Professor of Neurology at Oregon Health Science University, who conducted the work, "is that HE3286 not only limited the severity of disease, but based on histology it also appeared to help repair the tissue damage in the joints of the mice. This is a remarkable and extremely intriguing observation."

"This scientific meeting on autoimmune diseases represents a great opportunity for our scientists to take center stage at a major international conference to present data on our hormonal signaling technology platform drug candidates," said Richard B. Hollis, Chairman and Chief Executive Officer of Hollis-Eden Pharmaceuticals. "Specifically, our drug candidate HE3286 has now been identified in several animal models as an exciting compound which could provide a new, clinically relevant breakthrough treatment in several indications, including rheumatoid arthritis, diabetes and inflammatory conditions of the lung. The observation that HE3286 treatment appeared to facilitate restoration of a damaged joint in the CIA model is particularly important as it is yet another piece of experimental evidence suggesting the potential usefulness of this class of compounds in regenerative medicine. The observed ability, in these preclinical models, of immune regulating hormones to have potent anti-inflammatory properties without side effects such as immune suppression and bone loss commonly associated with corticosteroids, provides the potential opportunity to use these compounds in a broad array of inflammatory conditions."

About Hollis-Eden

Hollis-Eden Pharmaceuticals, Inc. is developing a proprietary new class of small molecule compounds that are metabolites or synthetic analogs of adrenal steroid hormones. These compounds, designed to restore the biological activity of cellular signaling pathways disrupted by disease and aging, have been demonstrated in humans to possess several properties with potential therapeutic benefit - they regulate innate and adaptive immunity, reduce nonproductive inflammation and stimulate cell proliferation. The Company's lead product candidate, NEUMUNE(R) (HE2100), is entering late-stage development for the treatment of Acute Radiation Syndrome (ARS), a life-threatening condition resulting from exposure to high levels of radiation following a nuclear or radiological incident, and is being explored for use in combating healthcare-associated infections. Hollis-Eden also is profiling optimized second-generation compounds for potential clinical development in a broad spectrum of therapeutic categories including hematology, metabolic disorders, autoimmune disorders, pulmonary diseases, oncology and infectious diseases. For more information on Hollis-Eden, visit the Company's website at www.holliseden.com.

This press release contains forward-looking statements within the meaning of the federal securities laws concerning, among other things, the potential and prospects of the Company's drug discovery program and its drug candidates. Any statements included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause the Company's actual results to differ materially from historical results or those expressed or implied by such forward-looking statements. Such statements are subject to certain risks and uncertainties inherent in the Company's business, including, but not limited to: the ability to complete preclinical and clinical trials successfully and within specified timelines, if at all; the ability to obtain regulatory approval for NEUMUNE under the U.S. Food and Drug Administration Animal Efficacy Rule, even if shown to be effective in preclinical studies; the ability to receive any stockpiling orders for NEUMUNE from the U.S. federal, state and foreign governments or agencies, even if approved by regulatory authorities; the Company's future capital needs; the Company's ability to obtain additional funding; the ability of the Company to protect its intellectual property rights and to not infringe the intellectual property rights of others; the development of competitive products by other companies; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company undertakes no obligation to update or revise the information contained in this press release as a result of new information, future events or circumstances arising after the date of this press release.

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CONTACT: Hollis-Eden Pharmaceuticals
Dan Burgess or Scott Rieger, 858-587-9333

SOURCE: Hollis-Eden Pharmaceuticals

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Hollis-Eden Pharmaceuticals's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.