APHT Aphton (MM)

Aphton Corporation (NASDAQ:APHT) announced today that the Company has closed its previously announced transaction related to the restructuring of the Company's $20 million Senior Convertible Notes, which were issued to the holders in March and June of 2003. Under the terms of the exchange agreement, the holders surrendered the entire principal balance of $20.0 million of Senior Convertible Notes for (1) $3.0 million in cash, (2) 10,000 shares of the Company's newly issued 0% Non-participating Series A-1 Convertible Preferred Stock with an original Stated Value of $10 million and a conversion price of $0.50 per share, and (3) 6,500,000 shares of the Company's common stock, of which 1,500,000 shares are subject to an escrow. About Aphton Aphton Corporation, headquartered in Philadelphia, Pennsylvania, is a clinical stage biopharmaceutical company focused on developing targeted immunotherapies for cancer. Aphton's products seek to empower the body's own immune system to fight disease. Through the acquisition of Igeneon AG in March 2005, Aphton acquired late-stage products, IGN101, a cancer vaccine designed to induce an immune response against EpCAM-positive tumor cells, as well as IGN311. Aphton has strategic alliances with Xoma for treating gastrointestinal and other gastrin-sensitive cancers using anti-gastrin monoclonal and other antibodies; and with Daiichi Pure Chemicals for the development, manufacturing and commercialization of gastrin-related diagnostic kits. Aphton's most advanced product, Insegia(TM), targets the hormone, gastrin 17, in an attempt to treat gastrointestinal cancers. Aphton is currently seeking partners that will support the further development of Insegia. For more information about Aphton or its programs please visit Aphton's website at: http://www.aphton.com. Safe Harbor This press release includes forward-looking statements, including statements about: (1) Aphton's expectation regarding the purpose and effectiveness of fully-humanized monoclonal antibodies, IGN101 and IGN311, and its cancer immunotherapy, Insegia; and (2) Aphton's intent to seek partners to further support the development of Insegia. These forward-looking statements may be affected by the risks and uncertainties inherent in the drug development process and in Aphton's business. This information is qualified in its entirety by cautionary statements and risk factor disclosure contained in Aphton's Securities and Exchange Commission filings, including Aphton's report on Form 10-K filed with the Commission on March 16, 2005. Aphton wishes to caution readers that certain important factors may have affected and could in the future affect Aphton's beliefs and expectations and could cause the actual results to differ materially from those expressed in any forward-looking statement made by or on behalf of Aphton. These risk factors include, but are not limited to: (1) Aphton's ability to find a partner who will support the further development of Insegia; (2) Aphton's ability to fund the further development of its research and development programs; (3) Aphton's ability to successfully identify and consummate opportunities to broaden and progress its research and development pipeline; (4) scientific developments regarding immunotherapy; and 5) the actual design, results and timing of preclinical and clinical studies for both companies' products and product candidates.