XTL Biopharmaceuticals Ltd. is a biopharmaceutical company engaged in the acquisition and development of pharmaceutical products for the treatment of unmet medical needs, particularly the treatment of diabetic neuropathic pain and hepatitis C.

Our lead compound is Bicifadine. We are developing Bicifadine for the treatment of diabetic neuropathic pain, a chronic condition resulting from damage to peripheral nerves. In September 2007, we initiated a Phase 2b trial that is aimed at demonstrating the efficacy of Bicifadine in diabetic neuropathic pain. Bicifadine is a serotonin and norepinephrine reuptake inhibitor, or SNRI. Compared to the currently approved SNRI's, Bicifadine has a unique ratio of serotonin versus norepinephrine reuptake inhibition, which is weighted toward norepinephrine reuptake inhibition, thereby providing a strong scientific rationale for testing Bicifadine for the treatment neuropathic pain indications. Prior to it being in-licensed, Bicifadine was extensively tested in more than 15 clinical trials involving over 3,000 patients, and has been shown to be safe and generally well tolerated. Bicifadine was evaluated in various acute pain indications, including two large, randomized clinical trials (n=750 and n=540) in patients suffering from acute post dental surgery pain, where Bicifadine demonstrated statistically significant efficacy. Bicifadine was also studied in chronic lower back pain studies, where it did not demonstrate statistically meaningful improvement in pain scores. Given the heterogeneity of the patient population, the diversity of sources of pain, and the significant psychological component, chronic lower back pain is considered a highly challenging pain model. XTL believes that a positive statistical and clinical benefit can be shown by assessing the drug's effect in a more homogenous and well-studied model such as diabetic neuropathic pain in which other SNRIs have been shown to be effective.

Our second program is the Diversity Oriented Synthesis, or DOS, program, which is focused on the development of novel pre-clinical hepatitis C small molecule inhibitors. Compounds developed to date inhibit HCV replication in a pre-clinical cell-based assay with potencies comparable to clinical stage drugs. In March 2008, we signed an agreement to out-license our DOS program to Presidio. Under the terms of the license agreement, Presidio becomes responsible for all further development and commercialization activities and costs relating to the DOS program. In accordance with the terms of the license agreement, we received a $4 million, non-refundable, upfront payment in cash from Presidio and will receive up to an additional $104 million upon reaching certain development and commercialization milestones. In addition, we will receive a royalty on direct product sales by Presidio, and a percentage of Presidio's income if the DOS program is sublicensed by Presidio to a third party.

Our Strategy

Under our current strategy, we plan to:

• complete our Phase 2b program for Bicifadine for the treatment of diabetic neuropathic pain;
• advance the development of Bicifadine towards approval in diabetic neuropathic pain and possibly in other related indications either alone or with a corporate partner; and
• seek to in-license or acquire additional candidates.