XTLbio ACQUIRES BROAD RIGHTS TO SYNTHETIC COMPOUNDS FOR POTENTIAL TREATMENT OF
THE HEPATITIS C VIRUS (HCV)

Earlier agreement with Korea's B&C Biopharm advances to licensing stage

Rehovot, Israel, 27 February 2002 - XTL Biopharmaceuticals Ltd. (XTLbio)
announced today that it exercised an option to develop and commercialise a
series of compounds developed by Korea-based B&C Biopharm aimed at inhibiting
HCV replication. Based on preliminary efficacy studies using XTLbio's
proprietary HCV in vitro and in vivo pre-clinical validation systems, the
Company intends to pursue further pre-clinical development and toxicology
testing of these small molecule HCV polymerase inhibitors.

"With our proprietary validation systems, we have identified a series of
synthetic compounds showing strong anti-HCV activity that warrant further
development," stated Shlomo Dagan, PhD, Chief Scientific Officer of XTLbio.
"These compounds will form the core of our efforts to complement our human
monoclonal antibody therapeutics with small molecules, a long-standing ambition
of the Company."

The agreement, which commits XTLbio to certain future milestones and royalty
payments, grants XTLbio exclusive development and marketing rights in every
continent besides Asia, which is shared between the two companies. B&C Biopharm
retains exclusive rights in Korea itself. Financial terms of the agreement were
not disclosed.

About XTLbio

XTL Biopharmaceuticals Ltd. (XTLbio) is the drug development company committed
to conquering hepatitis C in our time. XTLbio's HepeX(tm) product line - now in
clinical trials - has the potential to introduce revolutionary therapies for
viral hepatitis, including prevention of re-infection in transplanted livers,
the Company's primary focus, and a longer-term cocktail approach in treating
chronic illness. XTLbio believes its primary competitive advantage lies in its
patented Trimera(tm) technology, which enables the development of fully human
monoclonal antibodies and models of human disease for pre-clinical drug
validation. Established in 1993, XTLbio became a public company in 2000 with
shares traded on the London Stock Exchange under the symbol XTL.

About hepatitis C

Hepatitis C is a major public health concern. The World Health Organization
estimates that 170 million people worldwide are chronic carriers of the
hepatitis C virus (HCV) and that 3 to 4 million people are newly infected each
year. It is expected that 25 to 35% of these chronic patients will develop
progressive liver disease including cirrhosis and liver cancer. Hepatitis C is
the single leading cause of liver transplantation. The US Centers for Disease
Control and Prevention estimate that approximately 4 million people in the
United States (almost 2% of the population) have been infected with HCV, of
whom, approximately 3 million are chronically ill. Hepatitis C is the cause of
an estimated 8,000 to 10,000 deaths annually in the US.

About HCV-related liver transplant prophylaxis

Approximately 5% of chronic HCV patients will develop end-stage liver disease,
and ultimately may require liver transplantation. Today, there is a major
problem associated with HCV-related liver transplantation. Although the
infected liver - the major source of viral replication - has been removed,
free-floating virus in the patient's serum re-infects the healthy transplanted
liver in a matter of weeks. Disease progression in re-infected patients is
several times faster and, in many cases, a re-transplant becomes necessary. At
present, there is no available solution to this problem. The Company estimates
worldwide annual sales potential for HCV liver transplant prophylaxis at US$400
million.

About the treatment of chronic hepatitis C

The existing first-line chronic HCV therapy is often associated with a 50-60%
chance of success but is limited by severe side effects, including anaemia,
fatigue, hair loss and depression. Due to the relatively limited efficacy and
toxicity of this treatment, chronic HCV is still considered an unmet medical
need. Financial analysts estimate that worldwide annual sales for all products
treating chronic hepatitis C could reach US$4 billion in 2004.

HepeX(tm), Trimera(tm), XTL(tm) and XTLbio(tm) are trademarks of XTL Biopharmaceuticals
Ltd.

XTL Contact

Dr. Martin Becker, President and CEO, Tel: +972-8-930-4440



END