XTLbio's HepeX-B Receives Orphan Drug Designation from the FDA

Rehovot, Israel, 4 August 2003 - XTL Biopharmaceuticals Ltd. (XTLbio) reported
today that the U.S. Food and Drug Administration (FDA) has granted its
investigational therapeutic product, HepeX-B(tm), Orphan Drug Designation (see
Notes to Editors) for prevention of hepatitis B infection in liver transplant
patients.

Hepatitis B is the most common form of hepatitis and one of the world's leading
causes of death. About 5% of chronic hepatitis B patients will develop
end-stage liver disease, a condition which necessitates liver transplantation.
During the liver transplantation procedure the diseased liver is removed and a
healthy liver from a donor is transplanted. Without proper treatment, the newly
transplanted liver can become re-infected by residual virus in the patient's
serum , leading to rapid disease progression and graft failure in many cases.
The current market for prevention of hepatitis B infection following liver
transplant is estimated to be worth $100 million.

HepeX-B is a combination of two fully human monoclonal antibodies acting on the
hepatitis B virus surface antigen, which were selected based on their strong
activity against the virus in XTLbio's pre-clinical Trimera(tm) model. In a
recently reported study, HepeX-B maintained serum levels similar to or higher
than the current first-line treatment (polyclonal preparation of hepatitis B
immunoglobulin) , while using 1,000 times less drug.

Dr. Norah Terrault, assistant professor of medicine, Gastroenterology Division,
University of California, San Francisco, said, "HepeX-B potentially holds
several significant advantages over other products - to patients, clinicians
and healthcare payers. It is an important addition to the armamentarium of
treatments for liver transplant patients."

Dr. Martin Becker, XTLbio's Chief Executive Officer, commented, "XTL bio is
pursuing a vigorous commercialization program for HepeX-B, with Phase 2b
studies scheduled to commence later this year. The receipt of Orphan Drug
Designation from the FDA is a significant step in our effort to introduce this
novel therapy as rapidly as possible for liver transplant patients."

Contacts:

XTLbio

Dr. Martin Becker, President and CEO, Tel: +972-8-930-4440

Financial Dynamics

David Yates, Sarah MacLeod, Tel: +44 (0) 20 7831 3113

Notes to Editors

Orphan Drug Designation

The grant of Orphan Drug Designation Status for HepeX-B entitles XTLbio to
exclusive marketing rights in the United States for seven years following
marketing approval. Other benefits include the Company being eligible to apply
for certain grants from the FDA to provide funding for development. There is
also a fee waiver when XTLbio submits its Biological Licence Application (BLA)
to the FDA for approval to market the product.

About XTLbio

XTL Biopharmaceuticals Ltd. (XTLbio) is a biopharmaceutical company developing
drugs against hepatitis. XTLbio's HepeX(tm) product line - now in clinical trials
- has the potential to introduce revolutionary therapies for viral hepatitis,
including prevention of re-infection in transplanted livers, the Company's
primary focus, and a longer-term cocktail approach in treating chronic illness.
XTLbio believes its primary competitive advantage lies in its patented Trimera(tm)
technology, which enables the development of fully human monoclonal antibodies
and models of human disease for pre-clinical drug validation. Established in
1993, XTLbio became a public company in 2000 with shares traded on the London
Stock Exchange under the symbol XTL.



END