A 4-Week Therapy with Transition Therapeutics' E1-I.N.T.(TM) Leads to Sustained Reductions in Blood Glucose Levels for 6 Months Post-treatment in Type 2 Diabetes Patients

    Final Results from Exploratory Phase IIa Clinical Trial in Type 2
    Diabetes Patients Announced

    TORONTO, June 28 /CNW/ - Transition Therapeutics Inc. ("Transition")
(TSX: TTH), today announces the results from its exploratory Phase IIa
clinical trial indicating that 4-weeks of daily treatments with gastrin-based
therapy, E1-I.N.T.(TM), showed sustained reductions in blood glucose control
parameters, including haemoglobinA1C (HbA1c), for 6 months post-treatment. The
type 2 diabetes patients enrolled in this study were using metformin
with/without thiazolidinediones (TZD). Transition will host a conference call
to discuss these data at 5:00 pm EST on Thursday June 28th, 2007.
    "These data are very encouraging and show the potential of a regenerative
therapy in diabetes," said Sherwyn Schwartz, MD, a noted diabetes researcher
and the Director of the Diabetes & Glandular Disease Research Associates in
San Antonio, Texas who was the lead investigator of the study.
    "Achieving sustained improvements in glucose control for many months
post-treatment following a 4-week therapy is unprecedented in type 2 diabetes.
The improvements in HbA1c correlated with changes in multiple other clinical
parameters suggesting that gastrin-based therapies, and specifically
E1-I.N.T.(TM), have the potential to re-engage the body's natural mechanism to
regulate glucose," said Dr. Tony Cruz, Chairman and Chief Executive Officer of
Transition. "The immediate goal is to optimize the dosing regimen in a larger
phase II study".

    Key Efficacy Findings:

    As in Transition's press release on March 5th, 2007, analysis of efficacy
parameters was performed on type 2 diabetes patients with HbA1c levels of
equal to or greater than 7% prior to treatment.
    In the E1-I.N.T.(TM) treated group of patients, the mean HbA1c level was
reduced by 0.94% to 1.21% vs. baseline levels in months 2 to 6 post-treatment.
More specifically, the mean HbA1c level among treated patients was reduced
0.43%, 0.94% (p(less than)0.05), 1.09% (p(less than)0.05), 1.12% (p(less
than)0.05), 1.21% (p(less than)0.05), and 1.14% in months 1, 2, 3, 4, 5, and 6
post-treatment, respectively. In contrast, the mean HbA1c levels of the
placebo group ranged from a reduction of 0.1% to an increase of 1.0% over the
same period. In addition to the HbA1c reductions, the data demonstrated
decreases in fasting blood glucose levels as well as improvements in glucose
tolerance over a six month period following treatment with E1-I.N.T.(TM).
Trends in increased insulin levels as measured with an oral glucose tolerance
test were also observed, particularly in patients where the HbA1c levels
decreased over 1% with E1-I.N.T.(TM) therapy. These data are consistent with
the increased glucose control observed in diabetes animal models where a short
treatment with E1-I.N.T.(TM) resulted in a sustained increase in beta cell
mass and function. These clinical improvements, including HbA1c reductions
greater than 1% in patients six month post-treatment, highlight the potential
that E1-I.N.T.(TM) therapy could provide patients significant clinical benefit
in excess of 6 months.

    Safety and Tolerability Findings:

    There were no serious adverse events noted during the study. As described
in Transition's press release of March 5th, 2007, the most common adverse
events reported by patients receiving E1-I.N.T.(TM), were nausea, diarrhea,
headaches and vomiting which were generally mild to moderate in nature. The
majority of these adverse events were reported during the treatment period
with the occurrence of adverse events in the post-treatment phase being
similar in both the treated and placebo groups.

    Next Steps:

    In this study, the tolerable dosing levels of E1-I.N.T.(TM) and the
efficacy parameters to be employed in future clinical studies were
established. Building upon these sustained efficacy findings, the next steps
in clinical development will be to pursue a larger Phase II study to optimize
dosing regimens. Novo Nordisk A/S holds an exclusive license to the
E1-I.N.T.(TM) product and can further develop and commercialize this product
in accordance with the terms of the companies' amended license agreement as
previously announced July 17, 2006.
    In addition, these clinical data further support and validate the
potential of Transition's other gastrin based therapies to provide type 2
diabetes patients with sustained improvement in glucose control. Transition
holds the exclusive rights to a series of proprietary gastrin based
combination therapies including GLP1-I.N.T.(TM) (a combination of gastrin
analogue, G1, and a GLP-1 analogue) and combination therapies of gastrin and
DPP-IV inhibitors. Based on these encouraging findings, Transition is
accelerating the development of these combination gastrin-based therapies into
clinical trials.

    Conference Call Details:

    Transition will host a conference call to be held at 5:00pm EST on
Thursday, June 28th, 2007. Dr. Sherwyn Schwartz from San Antonio Texas who was
the lead investigator in this study will be available to answer any questions.
The conference call can be accessed by dialing 1 (800) 633-8548. International
callers are advised to dial (212) 676-5241. To participate, please dial the
conference number 15 minutes prior to the beginning of the call. A replay of
the conference call will be available until July 6, 2007 by visiting
Transition's website www.transitiontherapeutics.com.

    About the Study Design

    This exploratory Phase IIa clinical study for E1-I.N.T.(TM) was a
randomized, double-blind, placebo-controlled trial to evaluate the safety,
tolerability and efficacy of daily E1-I.N.T.(TM) treatments for 4 weeks with a
6-month follow-up in type 2 diabetes patients. The E1-I.N.T.(TM) treatment
consisted of a combination of two agents, G1 and E1. All patients received G1
doses of 30ug/kg/day, while E1 doses started at 0.3ug/kg/day for most patients
with some patients escalating to E1 doses of 0.5ug/kg/day or reducing to
0.2ug/kg/day. In the trial, 30 type 2 diabetes patients on oral anti-diabetic
agents (metformin with/without TZD) were enrolled. These patients continued on
their oral anti-diabetic medication for the duration of the trial. Upon entry
into the trial, the patients' HbA1c levels ranged between 6.8% and 10.9%, with
a mean HbA1c level of 8.1%. Transition reported interim unblinded data from
this study in a press release dated March 5th, 2007.

    About Transition

    Transition is a biopharmaceutical company, developing novel therapeutics
for disease indications with large markets. Transition's lead products include
regenerative therapies E1-I.N.T.(TM) and GLP1-I.N.T.(TM) for the treatment of
diabetes and AZD-103/ELND-005 for the treatment of Alzheimer's disease.
Transition has an emerging pipeline of preclinical drug candidates developed
using its proprietary drug discovery engine. Transition's shares are listed on
the Toronto Stock Exchange under the symbol "TTH". For additional information
about the company, please visit www.transitiontherapeutics.com.

    Notice to Readers: Information contained in our press releases should be
considered accurate only as of the date of the release and may be superseded
by more recent information we have disclosed in later press releases, filings
with the OSC or otherwise. Except for historical information, this press
release may contain forward-looking statements, relating to expectations,
plans or prospects for Transition, including funding and conducting clinical
trials. These statements are based upon the current expectations and beliefs
of Transition's management and are subject to certain risks and uncertainties
that could cause actual results to differ materially from those described in
the forward-looking statements. These risks and uncertainties include market
conditions and other factors beyond Transition's control, adverse events that
would require clinical trials to be prematurely terminated, clinical results
that indicate continuing clinical and commercial pursuit of E1-I.N.T.(TM) is
not advisable, the fact that the results from completed exploratory Phase IIa
clinical trials are not always indicative of those seen in future clinical
trials, and the risk factors and other cautionary statements discussed in
Transition's quarterly and annual filings with the Canadian commissions.

    %SEDAR: 00015806E

For further information:

For further information: on Transition, visit
www.transitiontherapeutics.com or contact: Dr. Tony Cruz, Chief Executive
Officer, Transition Therapeutics Inc., Phone: (416) 260-7770, x.223,
tcruz@transitiontherapeutics.com; Mr. Elie Farah, CFO and VP, Corporate
Development, Transition Therapeutics Inc., Phone: (416) 260-7770, x.203,

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