Oxygen Biotherapeutics Secures Long-Term Clinical Supply of Oxycyte(R)
Company on Track to Resume Phase IIb Traumatic Brain Injury Trial Later This Year

MORRISVILLE, N.C., May 3, 2012 (GLOBE NEWSWIRE) -- Oxygen Biotherapeutics, Inc. (Nasdaq:OXBT), a development stage biomedical company ("the Company") focused on developing perfluorocarbon-based intravenous and topical drug candidates, today announced it has achieved the critical milestone of securing an exclusive supply of cGMP-compliant Oxycyte®, the Company's proprietary perfluorocarbon based emulsion, that will take the Company through the current Phase II clinical trial for traumatic brain injury (TBI) and well into Phase III trials.

Key to this recent development was the signing of a contract with the manufacturer of cGMP-compliant FtBu, the proprietary, patent-protected active pharmaceutical ingredient in Oxycyte. Per the agreement, Oxygen Biotherapeutics has the exclusive rights to the supply of FtBu manufactured by this supplier.  In addition, the Company is now aligned with a California-based contract manufacturer that will produce Oxycyte based on the Company's new scaled-up process for making the emulsion. Results from recent engineering batches made by this new supplier demonstrate that Oxycyte continues to meet all required specifications for product release. 

"The ability to scale up the manufacture of Oxycyte in order to have quantities sufficient to bring us through our clinical trials is a significant milestone for our clinical development programs," said Michael B. Jebsen, President and Chief Financial Officer of Oxygen Biotherapeutics. "Over the past few months we have been working diligently with our manufacturer on the technology transfer process, installing the necessary cGMP equipment and developing the initial cGMP feasibility batches so that we may resume our clinical trials later this year."  

Added Timothy Bradshaw, Ph.D., Executive Vice President of Drug Development: "Stabilizing our source for clinical-grade Oxycyte is a significant achievement for our company.   Currently, we are evaluating the stability of Oxycyte in various storage conditions.  We previously determined that Oxycyte may be stored for at least 12 months when refrigerated, but we have gathered data suggesting that it is highly stable at room temperatures as well. We are continuing to test storage conditions at both ambient and even more elevated temperatures to allow medical professionals to extend the use of Oxycyte from the hospital to the field, including the battlefield."

Other steps that are underway and necessary to resume our trials include a review of our contract research organization, clinical sites and enrollment parameters for patients to participate in the trials. 

Oxycyte is the company's perfluorocarbon-based oil in water emulsion which is administered to the patient intravenously. It is designed to enhance oxygen delivery to damaged tissues. When used as an intravenous emulsion, Oxycyte can carry many times more oxygen than hemoglobin. Its small size compared to blood cells make it an effective means of transporting oxygen to tissues and carrying carbon dioxide to the lungs for disposal. Oxycyte requires no cross matching, so it is immediately available and compatible with all blood types. Because it contains no biological components, there is no risk of transmission of blood-borne viruses from human blood products. 

Currently the company is conducting a Phase IIb placebo-controlled double blind dose escalation clinical trial in Switzerland and Israel with Oxycyte for the treatment of traumatic brain injury. The company has completed the first of three cohorts of this trial and received approval by the Data and Safety Monitoring Board to proceed to the next cohort. The company expects to begin enrolling patients for the second cohort later this year. 

About Oxygen Biotherapeutics, Inc.

Oxygen Biotherapeutics, Inc. is developing medical and cosmetic 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 oxygen-carrying 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 products for the anti-aging market.

The Oxygen Biotherapeutics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7277

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. These statements include the expansion of development of the Oxycyte and Dermacyte product lines and the timing of the introduction of those new products. 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 new product introductions and customer acceptance of these new products, and other risks and uncertainties as described in Item 1A (Risk Factors) of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on July 15, 2011 and in our subsequent filings with the SEC. The company disclaims any intent or obligation to update these forward-looking statements beyond the date of this release, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

CONTACT: Ellen Corliss
         Senior Vice President
         Corporate Communications
         & Investor Relations
         (919) 855-2112
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