MISGAV, Israel & SAN FRANCISCO–(BUSINESS WIRE)–Medgenics, Inc., the developer of a novel technology for the
sustained production and delivery of therapeutic proteins in patients using
their own tissue, today announced that the Company received notice of
‘Intention to Grant from the European Patent Office for the patent application
entitled “USE OF DERMAL MICRO ORGANS,” with allowed claims covering a core
element of its Biopump™ protein therapy technology.

A counterpart patent in the United States was issued in
December 2008, with rights extending to November 2023. The patent estate
covering the Biopump includes compositions, methods of use and methods of
manufacture, and includes issued patents in the United
States, as well as pending applications in the United States
and various foreign jurisdictions.

Commenting on the European patent allowance, Andrew L.
Pearlman, Ph.D., President and Chief Executive Officer of Medgenics, said: “We
will be delighted to add this European patent to our growing intellectual
property portfolio. This patent is important as it protects key elements of our
protein production technology. These claims provide significant protection for
our proprietary technology and create significant barriers of entry to any
would-be competitors.”

“Medgenics has pioneered the development of sustained
production and delivery of therapeutic proteins using the patient’s own intact
tissue, which is a key differentiating factor of our technology. This patent,
like its counterpart U.S.
patent, is critical to protecting this unique tissue technology and its
resulting protein production capabilities,” added Dr. Pearlman.

About Medgenics

Medgenics is developing and commercializing Biopump™, a proprietary
tissue-based platform technology for the sustained production and delivery of
therapeutic proteins using the patient’s own skin biopsy for the treatment of a
range of chronic diseases including anemia, hepatitis C and hemophilia.
Medgenics believes this approach has multiple benefits compared with current
treatments, which include regular and costly injections of therapeutic
proteins.

Medgenics has three long-acting protein therapy products in
development based on this technology:

• EPODURE (now completing a Phase I/II dose-ranging trial) to
  produce and deliver erythropoietin for many months from a single
  administration, has demonstrated elevation and stabilization of hemoglobin
  levels in anemic patients for six to more than 36 months;
• INFRADURE (planning to commence a Phase I/II trial in Israel in 1H12
  in hepatitis C) to produce a sustained therapeutic dose of interferon-alpha for
  use in the treatment of hepatitis;
• HEMODURE is a sustained Factor VIII therapy for the
  prophylactic treatment of hemophilia, now in development.

Medgenics intends to develop its innovative products and
bring them to market via strategic partnerships with major pharmaceutical
and/or medical device companies.

In addition to treatments for anemia, hepatitis and
hemophilia, Medgenics plans to develop and/or out-license a pipeline of future
Biopump™ products targeting the large and rapidly growing global protein
therapy market, which is forecast to reach $132 billion in 2013. Other
potential applications for Biopumps™ include multiple sclerosis, arthritis,
pediatric growth hormone deficiency, obesity and diabetes.