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Diobex Announces Successful Completion of Phase 2a Trial Of,DIO-902, a Novel Cortisol Synthesis Inhibitor for Type 2 Diabetes

for toxicity. DIO-902 has been proven to be both more effective and safer than the racemic mixture in preclinical studies.

"We are delighted with the preliminary data that we have generated to date, and at the prospect of taking the leading Cortisol Synthesis Inhibitor to the next level of clinical development. DIO-902 is clearly at the head of the pack in the advancement of this exciting new drug category," commented Daniel Green, DiObex President.

"DIO-902 offers the possibility of adding a new therapy to the armamentarium which may have an impact on the underlying cause of type 2 diabetes. The prospect of significantly reducing multiple cardiac risk factors with a single drug is an extremely attractive opportunity to enhance patient compliance and convenience while reducing the need for polypharmacy," said Bernice Welles, M.D., Vice President of Development at DiObex.

DiObex plans on initiating a 16-week phase 2b dose-ranging study with DIO- 902 in mid 2007.

About DiObex

DiObex, Inc. is a San Francisco-based biopharmaceutical company founded to develop novel products for the treatment of metabolic diseases. DiObex has two products preparing to enter Phase 2b clinical development. DIO-901 is a formulation of Very Low Dose Glucagon (VLD Glucagon) for reducing or preventing of insulin induced hypoglycemia. DIO-901 has received Fast Track status from the Food and Drug Administration. DIO-902 is a single enantiomer of ketoconazole and is a novel cortisol synthesis inhibitor. Abnormalities in cortisol activity may play an important role in the development of metabolic syndrome, a constellation of conditions that place people at high risk for type-2 diabetes and cardiovascular disease. For more information, visit www.diobex.com.

CONTACT: Daniel Green of DiObex, Inc., +1-415-551-4114, dgreen@diobex.com

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