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Inflazyme Announces Outcome of Review of Phase 2b Asthma Study:,Potential Mitigating Factors Identified which Prevent Clear,Interpretation of Results

RICHMOND, British Columbia, March 12, 2007--Inflazyme Pharmaceuticals Ltd. (TSX: IZP). As announced on January 29, 2007, the preliminary results of the Phase 2b CAPSICS study with IPL512,602 showed no statistical or clinical difference between patients who received drug or placebo. However, the placebo response was surprisingly large and consistent across a number of the end-points, which prompted an examination by Inflazyme and its external experts to determine if anything untoward had occurred during the study.

To put the placebo response in perspective, we compared the results of our study to publications of other asthma clinical studies where Asthma Quality of Life was used as an endpoint. Our placebo response was two to three times greater than generally observed. Dr. William Busse and Dr. Mark FitzGerald, two leading clinical asthma experts who reviewed the data, agreed that "the large magnitude of the placebo response is surprising and could potentially obscure any apparent benefits of IPL512,602".

Our medical advisors have offered three possible factors contributing to the high placebo response. First, as is not uncommon, the study did not include placebo treatment during the run-in period at the start of the trial when patients were to be stabilized on their existing therapy. Observing a large placebo effect during this run-in period could have excluded those patients from the study.

Second, subjects were on a background therapy of inhaled corticosteroids and it is not possible to determine if there may have been compliance issues whereby patients were not taking their medications on a consistent basis as prescribed in the run-up to the study. A part of the placebo response might indeed be attributable to patients, once enrolled into the study, paying more attention to their symptoms and becoming more compliant with their background medications.This may have resulted in an improvem ent in their asthma independent of treatment with IPL512,602.

Finally, a large proportion of the patients were recruited during the summer allergy season, and the patients’ allergies might have diminished during the treatment phase of the trial as the allergy season waned. Resolution of allergic rhinitis could improve asthma symptoms and other measures of asthma control in all patients independent of treatment.

Our Phase 2b study was of a standard design generally used in this setting, such that these issues were not anticipated. However, taken together, we believe these issues nullify interpretation of the Phase 2b study.

Inflazyme believes that IPL512,602 would benefit from additional clinical investigation to confirm its potential as an oral treatment for asthma. The Company has significant clinical data from the earlier Phase 2a study in mild to moderate asthmatics completed by Aventis pharma (now sanofi-aventis) in June 2004, and substantial preclinical evidence indicating that the drug has efficacy in asthma. Today, Inflazyme has insufficient cash resources to conduct additional clinical trials with this product. Inflazyme plans to share these findings with other parties in an attempt to realize commercial value for this program.

About Inflazyme

Inflazyme Pharmaceuticals is a biopharmaceutical company pioneering medical breakthroughs to transform the lives of patients with respiratory and inflammatory diseases worldwide.Further information on the Company may be obtained from its website at www.inflazyme.com.

This news release contains certain “forward-looking statements” and “forward-looking information” which may include but is not limited to statements in respect of our future financial position or operations. Words like "believe", "intend", "may", "expect", “anticipate”, “plan”, “should” and oth er similar expressions are forward-looking statements that involve a number of risks and uncertainties. By their nature, forward-looking statements involve numerous factors, assumptions and estimates, some but not all of the factors that could cause actual results to differ materially from those projected in our forward-looking statements include among others: risks associated with the completion of clinical trials and obtaining regulatory approval to market our products, market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; and other risk factors identified from time to time in the Company's regulatory filings. For a further description of the principal risks affecting the Company, see our regulatory filings. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements.

Contact:
Inflazyme Pharmaceuticals Ltd.
Julie Rezler, Sr. Director, Corporate Development
Tel: 1.800.315.3660/604.279.8511
Fax: 604.279.8711
E-mail: ir@inflazyme.com
Website: www.inflazyme.com


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