Oxygen Biotherapeutics and the U.S. Army Institute of Surgical Research Sign a Cooperative Research and Development Agreement to Study the Effects of Oxycyte® on Ex Vivo Platelet Function

Oxygen Biotherapeutics, Inc. (“OBI”) (NASDAQ: OXBT), announced today that it has signed a Cooperative Research and Development Agreement (CRADA) with the U.S. Army Institute of Surgical Research (USAISR) at Fort Sam Houston Texas to explore the potential effects of OBI’s proprietary perfluorocarbon-based emulsion, Oxycyte, on platelet function and blood hemostasis. This CRADA has been initiated to complement ongoing research and development work funded previously by a Department of Defense grant to broaden the safety profile of the use of perfluorocarbon-based emulsions to treat patients with traumatic brain injury – an indication for which OBI is conducting Phase II clinical trials overseas.

Although a known response to perfluorocarbon-based emulsion products is the transient decline in circulating platelet counts, the mechanism by which this phenomenon occurs is poorly understood and its impact on overall coagulation pathways and clinical outcomes remains the subject of debate. Recently completed in vitro studies using blood from normal healthy human volunteers at the Children’s Hospital in Boston have demonstrated that Oxycyte has little effect on the activation and function of platelets. The research being conducted under the present CRADA will investigate whether Oxycyte alters platelet activation, aggregation or adhesion in a model of systemic inflammation. Researchers will conduct ex vivo evaluations of platelet activity and whole blood clotting functions. Changes in the structural and functional properties of platelets will be evaluated including receptor expression and distribution, and aggregation in response to agonists. This work will be part of a larger study to determine the biodistribution of platelets following Oxycyte administration in this model. The company has undertaken this extensive preclinical program to address concerns that the U.S. FDA has expressed regarding perfluorocarbon-based emulsions.

“This work is important in terms of helping us better understand the mechanism surrounding platelet count declines in response to Oxycyte administration and we believe it will go a long way towards allaying the concerns the FDA has around the use of perfluorocarbon-based drugs and treatments, in general,” said Michael Jebsen, President and Chief Financial Officer of OBI. “We are pleased to be working with the highly respected Institute of Surgical Research at Fort Sam Houston. Their scientists have a strong working relationship with the Texas Biomedical Research Institute where other critical Oxycyte preclinical studies are currently underway. Based on the preliminary findings of a number of our ongoing studies in platelet function and immunocompetence, we believe we are compiling the data necessary to move Oxycyte back into clinical trials in the U.S. in the future.”

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 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 has also developed PFC-based cosmetic creams and gels for topical delivery to the skin for anti-aging, and potentially for wound care and dermatologic conditions.

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 development and commercialization of Oxycyte, our 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 December 14, 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.