Newsletter

January 7, 2005

Volume VI, Issue 44

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There's a bunch of new commentary in the BLOG on HDY, AMW, and one important comment on VTSI. Please review the comments and questions if you have an interest in any or all of these stocks.

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Xenomics (OTC BB: XNOM); Partners Up on Clinical Trials

Outside of the energy sector, which in and of itself has been going through a corrective phase, the one glimmer of performance in the tech arena has been the biotech sector. I have a theories as to why biotech appears to be the group that will lead us out of the current stock market morass.

For one, the biotech sector is not "commoditized" as most other sectors. A breakthrough biotech product is patented protected for many years. Hence, the high cost of new drugs and huge margins.

The margins are enormous on biotech products. New drugs are isolated from inflation and a slowing economy. The baby boomer demographic suggests increasing demand for new medical therapies for the next 20 years.

Other tech sectors are not as fortunate. Anything computer related has heavy competition. Lower pricing power erodes margins.

Shown here are three charts of biotech ideas the OTC Journal has suggested in the last month. PDLI, FHRX, and ARIA were all trading ideas that worked to the tune of 10% to 20% returns over the course of a week or two.

In short, I believe the biotech sector looks relatively strong, especially as compared to the rest of technology, because it is isolated from economic concerns. These three ideas that all worked in a miserable market serve as proof of concept.

Biotech companies do not need to have major commercial breakthroughs to get strong market valuations. Generally, the market follows the company's achievements as new therapies work their way through the clinical trial process.

For example, take the recent action in the price of Renovis (NASDAQ: RNVS). RNVS closed at $6.79 on May 3rd, and reopend for trading on May 4th at $14.46. The company announced some positive results in a trial for a new drug designed to treat stokes.

Obviously, the positive clinical data came as a complete surprise to market participants, and served as welcome relief for shareholders who have watched the value erode from the $16 level in December.

Which brings us to the subject of today's edition on XNOM. Xenomics owns the rights to applications for the use of Transrenal DNA. The technology, which came out of the Soviet Union in the late 80's, uses DNA which has passed through the kidneys and into the urine as a platform for a variety of tests.

Today, after the market closed, XNOM announced it has entered into an agreement with with North Shore-Long Island Jewish (LIJ) Health System to commence a clinical trial for its first commercial product.

XNOM's first commercial application for Transrenal DNA will be a urine test to eliminate the need for the amniocentesis test. If you have been involved in a high risk pregnancy, you know the amniocentesis test is generally recommended. A long needle is inserted into the womb of the fetus and amniotic fluid is withdrawn. Many DNA tests can be performed on the amniotic fluid.

Using XNOM's technology, you don't need the amniotic fluid. You can get the same result testing urine.

North Shore Long Island Jewish Health system specializes in caring for high risk pregnancies. North Shore will be sponsoring XNOM's test for Downs Syndrome.

As clinical results become available, shares of XNOM could respond by trading up with greater volume levels.

Shares of XNOM continue to be thinly traded and steady at about the $2.60 level. I still believe this is one for long term investors only. However, the technology offers a myriad of potentially profitable opportunities, and XNOM is embarking on the commercialization journey now. This one could catch fire as the biotech arena leads us out of the current market doldrums.

Here is the complete text of the news release for your review:

Press Release Source: Xenomics, Inc.

XNOM Executes Research Contract with North Shore-LIJ Health Sys. to Begin Human Clinical Studies of Non-Invasive Prenatal DNA Tests

Monday May 9, 5:10 pm ET

Studies Represent Major Step in Development of Xenomics' Proprietary Transrenal-DNA Tests for Down Syndrome

NEW YORK--(BUSINESS WIRE)--May 9, 2005--Xenomics, Inc. (OTCBB:XNOM - News), a developer of next-generation medical DNA technologies, has executed a contract with North Shore-Long Island Jewish (LIJ) Health System, one of the nation's largest healthcare institutions, to begin conducting human clinical studies in the next development phase of the Company's revolutionary Transrenal-DNA (Tr-DNA) technology. The study will test the technology's ability to non-invasively detect Down syndrome in unborn babies using a safe and simple urine collection from the mother.

Under the research agreement, which is subject to institutional review board approval, Xenomics and North Shore-LIJ will collaborate to begin human clinical studies of the Company's safe, inexpensive and non-invasive medical tests to detect Down syndrome, a serious genetic abnormality, in unborn children. North Shore-LIJ, a 14-hospital network serving Long Island, Queens and Staten Island that treats a large population of high-risk pregnancy patients, will provide Xenomics scientists with anonymous urine samples from expectant mothers carrying children identified with Down syndrome. This will enable Xenomics to conduct the next phase of clinical studies as it develops its technology for the diagnostic marketplace.

"The agreement with North Shore-LIJ will give us access to human clinical samples and outcome data, which are required by the FDA in the development of any new commercial diagnostic product. As such, it represents a critical turning point in our timeline to develop commercially available prenatal genetic tests for Down syndrome using our Tr-DNA technology," said Dr. Randy White, CEO of Xenomics. "When developed, the great advantage of our test will be that it poses no risk to mother or child, can be performed significantly earlier in the pregnancy than current procedures, and requires only a simple urine collection from the mother. North Shore's commitment to help us develop the test is a significant validation for Xenomics and we are honored to be working with them."

Dr. Thomas Sodeman, Chairman of Laboratory Medicine at North Shore-LIJ, will be principal investigator on the Xenomics study. "A non-invasive test to detect genetic abnormalities would greatly reduce risks to patients. We recognize how important this is, especially during a time like pregnancy when patients are already at enough risk," said Dr. Sodeman.

The executed research contract is subject to approval by the Institutional Review Board (IRB) of the Biomedical Research Alliance of New York, which oversees hundreds of clinical trials being conducted at North Shore-LIJ. Institutional review boards are administrative offices at medical and scientific research institutions that oversee the conduct of all studies involving human subjects.

Xenomics is developing a new generation of unique tests based on its technology to detect Transrenal-DNA - that is, genetic material released through normal cell death that has passed through the kidneys and is eliminated in the urine. Among the medical tests Xenomics is developing with this proprietary technology are prenatal screening methods that can detect a range of fetal conditions and abnormalities, such as Down syndrome. Current practices to detect Down syndrome require amniocentesis, a delicate and potentially risky procedure that extracts amniotic fluid from the uterus through insertion of a 9-inch needle.

By contrast, Xenomics tests present no risk to mother or child. They require only a safe, non-invasive urine sample. Preliminary work showed an ability to detect fetal DNA as early as seven weeks into pregnancy, instead of the 15- to 22-week window commonly used in amniocentesis. Because it is a molecular test, it is easier for the laboratory to perform and the turnaround time is significantly faster than current methods. When developed, the test is expected to be a fraction of the price of existing test procedures. The project Xenomics is slated to conduct with North Shore-LIJ is entitled, "Development of a Non-Invasive First Trimester Screening Test for Down Syndrome."

About North Shore-Long Island Jewish Health System

The nation's third largest, non-profit, secular healthcare system, the North Shore-Long Island Jewish (LIJ) Health System provides care for people at all stages of illness throughout Long Island, Queens and Staten Island -- a service area encompassing more than five million people. The health system includes 14 hospitals, four long-term care facilities, a medical research institute, three trauma centers, five home health agencies and dozens of outpatient centers. North Shore-LIJ facilities house more than 5,576 beds, and are staffed by over 7,000 physicians, 7,000 nurses and a total workforce of more than 35,000 -- the largest employer on Long Island and the ninth largest in New York City. For more information, visit www.northshorelij.com.

About Xenomics, Inc.

Xenomics is a molecular diagnostic company that focuses on the development of DNA-based tests using Transrenal DNA (Tr-DNA). Xenomics' patented technology uses safe and simple urine collection and can be applied to a broad range of applications, including prenatal genetic testing, tumor detection and monitoring, tissue transplantation, infectious disease detection, genetic testing for forensic identity determination, drug development, and research to counter bioterrorism. Scientists from Xenomics were the first to report that fragments of DNA from normal cell death cross the kidney barrier and can be detected in urine. The Company believes that its technology will open significant new markets in the molecular diagnostics field. Xenomics has three issued U.S. patents covering different applications of the technology for molecular diagnostics and genetic testing and a pending European patent for the same applications. The Company has organized a joint venture to conduct research on infectious disease detection with the National Institute for Infectious Diseases (Instituto Nazionale per le Malattie Infettive "Lazarus Spallanzani") in Rome, in the form of a new R&D company called SpaXen Italia, S.R.L. For more information, please visit http://www.trilogy-capital.com/tcp/xenomics/website.html. For more investor-specific information, including daily and historical Company stock quote data and recent news releases, please visit http://www.trilogy-capital.com/tcp/xenomics. To read or download the Company's Investor Fact Sheet visit http://www.trilogy-capital.com/tcp/xenomics/factsheet.html. To view an online video about Xenomics technology and products, visit http://www.trilogy-capital.com/tcp/xenomics/video.html. A TV news report about the Company's next-generation prenatal tests can be viewed at http://www.trilogy-capital.com/tcp/xenomics/ny1_video.html.

Forward-Looking Statements

Certain statements made in this press release are forward looking. Such statements are indicated by words such as "expect," "might," "should," "anticipate" and similar words indicating uncertainty in facts and figures. Although Xenomics believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations reflected in such forward-looking statements will prove to be correct. As discussed in the periodic reports of Xenomics, as filed with the Securities and Exchange Commission, actual results could differ materially from those projected in the forward-looking statements as a result of the following factors, among others: uncertainties associated with product development, the risk that Xenomics will not obtain approval to market its products, the risk that Xenomics' technology will not gain market acceptance, the risks associated with dependence upon key personnel, and the need for additional financing.
Contact:

     Xenomics, Inc.
     Randy White, 212-297-0808
     or
     Trilogy Capital Partners, Inc. (Investor Relations)
     Paul Karon, 800-342-1467
     paul@trilogy-capital.com

Source: Xenomics, Inc.

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