Oxygen Biotherapeutics Engages PPD to Execute Remainder of Phase IIb Clinical Trial to Evaluate the Safety and Tolerability of Oxycyte® in Severe Traumatic Brain Injury

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MORRISVILLE, N.C.--Oxygen Biotherapeutics, Inc. ("OBI") (NASDAQ: OXBT), announced today that it is partnering with Pharmaceutical Product Development, LLC (PPD), a global contract research organization, to resume and complete OBI's STOP-TBI (Safety and Tolerability of Oxycyte in Patients with Severe non-Penetrating Traumatic Brain Injury) Phase II-b clinical trial.

"The development of Oxycyte® as a potential breakthrough therapy for severe traumatic brain injury remains the top priority of this company, and for the past 12 months we have remained committed to resuming enrollment in our clinical trials. Engaging a qualified CRO is a critical step in getting trial sites back up and running and open for enrollment by year-end," said Michael Jebsen, President and Chief Financial Officer of OBI.

OBI completed the first cohort of a planned three cohort dose escalation study. Based on unblinded review of safety data from the 11 enrolled patients, the Data Safety Monitoring Board (DSMB) unanimously approved initiating Cohort 2. Cohorts 2 and 3 will enroll 18 subjects each with the DSMB reviewing safety data at the end of each cohort. An additional 50 patients with severe TBI will be treated at the highest dose approved by the DSMB. The company expects the trial to be completed in late 2015.

The primary objective of the trial is to evaluate the safety and tolerability of a single administration of Oxycyte in patients with severe non-penetrating traumatic brain injury. The secondary objective is to assess the potential of Oxycyte in ameliorating the severity of TBI and represents an opportunity for the collection of placebo-controlled efficacy data, specifically, clinical and functional improvement. Functional status will be measured by the Glasgow Outcome Scale (GOS-E), a validated tool that helps to assess progress in patient recovery from their injury.

Dr. Timothy Bradshaw, Executive Vice President of Drug Development at OBI, stated that, "We are pleased to be working with PPD as our CRO to oversee the completion of this critical trial. We selected PPD for their global reach and expertise conducting trials in which critically injured subjects are identified and managed in an emergency or trauma setting. They have presented a great operational plan for ensuring the successful completion of the study. In addition, PPD has medical staff with therapeutic expertise in neurotrauma. Our focus now is getting sites ready to enroll patients."

OBI believes this challenging goal is achievable because many of the clinical investigators who participated in the first cohort have expressed enthusiasm for beginning the second cohort. The company has already begun making the necessary regulatory submissions to Ethics Committees in Israel and plans on initiating the same process in Switzerland shortly. In an effort to expedite enrollment, the study will also be expanding into additional countries, adding sites as the need arises. The current budget allows for up to four countries and 18 sites to be included if necessary. Importantly, continuity from the first cohort will be provided for as Dr. Michael Reinert, a noted neurosurgeon in Switzerland will remain as the lead principal investigator.

About Oxycyte

Oxycyte is a sterile, milky white, sub-micron (median diameter of 200-250 nm) perfluorocarbon (PFC) emulsion intended for intravenous injection. It contains two key ingredients, perfluoro(t-butylcyclohexane) and egg yolk phospholipids (an emulsifier), along with several minor ingredients dispersed in water. Research has shown that PFCs can dissolve and release large amounts of gases, including oxygen and carbon dioxide. When formulated and delivered as an intravenous emulsion, PFCs have been shown to enhance the oxygenation of ischemic tissue.

About PPD

PPD is a leading global contract research organization providing drug discovery, development and lifecycle management services. Their clients and partners include pharmaceutical, biotechnology, medical device, academic, and government organizations. With offices in 44 countries and more than 11,000 professionals worldwide, PPD applies innovative technologies, therapeutic expertise and a commitment to quality to help clients and partners accelerate the delivery of safe and effective therapeutics and maximize the returns on their R&D investments.

About Oxygen Biotherapeutics, Inc.

Oxygen Biotherapeutics, Inc. is developing medical products that efficiently deliver oxygen to tissues in the body. The company has developed a proprietary perfluorocarbon (PFC) therapeutic oxygen carrier called Oxycyte® that is currently in clinical and preclinical studies for intravenous delivery for indications such as traumatic brain injury, decompression sickness and stroke. The company is also developing PFC-based creams and gels for topical delivery to the skin for dermatologic conditions and potentially wound care. In addition, the Company has commercialized its Dermacyte® line of skin care cosmetics for the anti-aging market.

Caution Regarding Forward-Looking Statements

This news release contains certain forward-looking statements by the company that involve risks and uncertainties and reflect the company's judgment as of the date of this release. The forward-looking statements are subject to a number of risks and uncertainties including matters beyond the company's control that could lead to delays in the clinical study, new product introductions and customer acceptance of these new products, and other risks and uncertainties as described in our filings with the Securities and Exchange Commission, including in the current Form 10-Q filed on September 19, 2012, and our annual report on Form 10-K filed on July 24, 2012, as well as other filings with the SEC. The company disclaims any intent or obligation to update these forward-looking statements beyond the date of this release. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.