Business Wire - September 26,2001

While other biotechnology firms are testing technologies that address the issue of contaminated blood products in a particular manner, there are currently no methodologies being marketed by any company designed to inactivate bacterial or viral pathogens in cellular or labile transfusion products. Bionex(TM) is expected to be effective in inactivating these pathogens in contaminated biological fluids such as whole blood. "The Bionex(TM) technology is based on the discovery of novel methods and compositions for treating pathogens that exist, or are transmitted in various human blood transfusion products and organs," explained Mr. Jackson.

The Canadian Veterinary Medical Association recently indicated that the lack of clinical research is leaving Canada defenseless against the mushrooming number of mysterious diseases that pose a threat to human health. Dr. Alex Livingston, dean of the University of Saskatchewan's Western College of Veterinary Medicine, reported that studies indicate that three out of four "emerging" diseases, in humans, come from animal hosts. Among the most devastating examples are AIDS, variant Creutzfeldt-Jakob Disease (vCJD), West Nile virus, Hantaviruses, and E.coli. to name only a few.

"The Bionex(TM) technology includes the introduction of one or more of its compounds into a blood bag, either before or after collecting whole blood, allowing the properties of the compound to decontaminate the blood," added Mr. Jackson. "As such, if this technology is successfully commercialized, it would be possible to provide whole blood suitable for transfusion without the fear of contamination from HIV, hepatitis B and hepatitis C, herpes and other bacteria."

The Bionex(TM) technology also includes methods for treating biological fluids such as plasma, packed red cells, bone marrow and sperm, and inactivating any pathogens in the biological fluid - vital in assuring a zero-risk blood product supply.

Mr. Jackson further explained the primary competitive advantages of Bionex(TM). "In addition to being effective against viruses and bacteria, we believe Bionex(TM) to be the first product of its kind that may prove to be safe for human consumption and/or contact. This is of vital importance in the use of blood products for transfusions."

To date, the Bionex(TM) compounds have shown to be viricidal and bacteriocidal in the initial stages of the experiments. Early experimental research has also indicated that the Bionex(TM) compounds in whole blood do not harm any of the constituents of the blood.

Altachem has acquired the world rights to Bionex(TM) from Bionel, a private biotechnology company in Maryland. These compounds were discovered by Dr. Rene-Guy Bushnel, an internationally-known scientist in the fields of Bio-Acoustics and Biochemistry. Dr. Bushnel is also the inventor of a patented product for surgical gloves and condoms that incorporates a viricide compound between two layers of rubber. These surgical gloves and condoms prevent the inadvertent transmission of an active pathogen through the rubber.

"The Bionex(TM) acquisition is another major milestone for Altachem Pharma and completes our strategy of providing a fully integrated approach to the treatment of HIV/AIDS (Kill the virus with ACP-HIP; stop spread of the virus by blood transfusion with Bionex(TM) and, thirdly, to enhance the quality of life for people with the disease via treatment with Anticort(TM)," explained Mr. Jackson. "The urgent need for this product was further highlighted by recent announcements by the FDA and HPB of blood-donation bans on anyone who has spent considerable time in Europe. The ban is expected to have a large impact on the national blood donor pool according to the FDA. USA TODAY reported, in a recent article, that the impact could be far greater regionally. In the New York Metro area, for example, where 25% of blood used is imported from Europe, the blood supply is expected to drop 35%.The successful commercialization of this technology is of significant importance to the intended recipients of blood products as well as the blood treatment industry world-wide," said Mr. Jackson.

Altachem Pharma Ltd. is a publicly traded (CDNX:AAF), Alberta-based pharmaceutical company committed to developing new and improved pharmaceutical products to globally enhance the quality of life. Altachem invests in, develops, manufactures and distributes pharmaceutical products in Canada and internationally. The Company is certified compliant with internationally recognized quality systems standards, ISO 9002:1994, ISO 13488 and EN 46002.

For additional information, contact: Roger Andrews, Don Bain, Vice-President

Manager-Investor Relations McManus Elliott Communications

Altachem Pharma Ltd. Tel. (416) 979-8300 (Ext. 237)

Tel. (780) 486-8331(Ext. 331) Fax. (416) 979-8638

Toll-free (877) 502-5939(Ext. 331) E-mail: don@mcmanuselliott.com

Fax (780) 448-1436

E-mail: roger@altachempharma.com

Web site: www.altachempharma.com

Certain information contained in this press release may be forward-looking and is subject to unknown risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove correct. This is neither an offer to buy or sell a security. For informational purposes only, from sources deemed to be reliable.

BACKGROUND SHEET TO ALTACHEM PHARMA/BIONEX NEWS RELEASE

The Buoyant Blood Treatment & Blood Transfusion Market

-- The market for blood products is over $ 10 billion and growing and with more than 90 million units of blood donated world-wide every year, the need for methods to improve the safety of blood products is truly significant. (5)

-- "Any new technology to make the blood supply safer has been very well received by the public and has been adopted quickly by blood banks," says Richard Davey, Chief Medical Officer for American Red Cross. (3)

-- Recent announcements by FDA and HPB banning blood donations by anyone who has spent considerable time in Europe is expected to have a large impact on the USA national donor pool according to the FDA. The impact could be far greater regionally. In New York Metro area, where 25% of blood used is imported from Europe, the blood supply is expected to drop 35%.(4)

The Importance of Zero-Risk Blood Supplies and Products

-- Number of people worldwide currently living with HIV/AIDS (at end 2000): 36.1 million(2)

-- Number of people worldwide newly infected with HIV virus (at end 2000): 5.3 million(2)

-- Number of people worldwide infected with Hepatitis B virus (at end 2000): 2.0 billion (7)

-- Number of people worldwide with chronic (lifelong) Hepatitis B (at end 2000): 350 million (7)

-- Number of people worldwide infected with Hepatitis C virus (at end 2000): 170 million (7)

Consumer Demands - Which Bionex(TM) May Possibly Meet

-- Contaminant-free biological fluids such as whole blood or blood products intended for transfusion. Technology that may be proven to provide zero-risk blood transfusion products.

-- The need to replace a Donor-Screening System that at best, only slightly increases the chance of blood safety.

-- The Canadian Veterinary Medical Association indicated, in a recent article, that lack of clinical research is leaving Canada defenseless against the mushrooming number of mysterious diseases that pose a threat to human health. Dr. Alex Livingston, dean of the University of Saskatchewan's Western College of Veterinary Medicine, reported that "Studies indicate that three out of four "emerging" diseases, in humans, come from animal hosts. Among the most devastating examples are AIDS, variant Creutzfeldt-Jakob Disease (vCJD), West Nile virus, Hantaviruses, and E.coli. to name only a few.(6)

Sources: (1) Bionel; (2) United Nations Joint Initiative on Aids(UNAIDS); (3) American Red Cross; (4) USA TODAY; (5) Cerus Corp; (6) Edmonton Journal (23-06-2001 A5); (7) World Heath Organization (WHO)

CONTACT: Altachem Pharma Ltd.

Roger Andrews, 780/486-8331, Ext. 331

Toll-free: 877/502-5939, Ext. 331

Fax: 780/448-1436

E-mail: roger@altachempharma.com

URL: www.altachempharma.com or

McManus Elliott Communications

Don Bain, 416/979-8300, Ext. 237

Fax: 416/979-8638

E-mail: don@mcmanuselliott.com

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