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Hollis-Eden Announces Cancellation of Acute Radiation Syndrome RFP,by Department of Health and Human Services

SAN DIEGO--(BUSINESS WIRE)--Mar 8, 2007 - Hollis-Eden Pharmaceuticals, Inc. (NASDAQ:HEPH) today announced that it was informed late Wednesday, March 07, 2007, by the Department of Health & Human Services (HHS) that NEUMUNE(R), the Company's product candidate for the treatment of Acute Radiation Syndrome (ARS) was found technically unacceptable and was no longer in the competitive range for the Request for Proposal (RFP) No. DHHS-ORDC-DDA-05-12 entitled, "Medical Countermeasures to Mitigate or Treat Neutropenia Alone or in Combination with Co-Morbidities Associated with Acute Radiation Syndrome (ARS)." No other rationale was provided. Further, Hollis-Eden was notified that HHS had cancelled the solicitation in its entirety.

The Company was surprised by this decision by HHS. In June 2006, based on HHS' evaluation of the Company's technical and cost proposal, HHS informed the Company that its proposal for NEUMUNE was within the competitive range. HHS reaffirmed this decision in October 2006, and Hollis-Eden believes that as of that time its proposal was the only proposal still being considered by HHS. Since that time, HHS has not requested any additional safety or efficacy data on NEUMUNE that had not previously been provided in detailed or summary form. Therefore, the Company is unable to comprehend how NEUMUNE can no longer meet the technical requirements of the solicitation.

"Given the nature and stage of our communications with HHS regarding our original ARS proposal and subsequent revisions, this decision by HHS to exclude our proposal and cancel the RFP is shocking and difficult to understand," stated Richard B. Hollis, Chairman and Chief Executive Officer of Hollis-Eden. "While we will attempt to gain a better understanding from HHS why this determination was made, we clearly met all of the very detailed requirements of the solicitation. NEUMUNE is the only agent ever to have shown the ability to
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