Neal G. Koller
President & Chief Executive Officer

    3724a Thomas Point Road
    Annapolis, Maryland  21403
    USA
    Tel:  +1 443 994 0101
    Fax:  +1 410 990 9817
    nkoller@plurogen.com
PluroGen Therapeutics, Inc.
503 Broadleaf Way
Charlottesville, Virginia  22911
USA
Tel:  +1 443 994 0101
Fax:  +1 410 990 9817
www.plurogen.com
August 4, 2008

RE:        PluroGen Therapeutics, Inc. Investor Update:  Q2 2008

Dear Investor

Once again, PluroGen made important progress in plan achievement in this latest quarter, Q2 2008.  The Company
achieved a number of important and strategic milestones, which are summarized as follows:

  • We considerably improved our sales, marketing and distribution capabilities in the US and EU
  • We enhanced our fund raising position through the release of our Series A preferred stock offering
  • A number of our convertible note investors have already invested in the Series A
  • We took a major step towards commercialization with the receipt of our 1st medical device customer order
  • We made significant progress towards submission of our US and EU medical device regulatory marketing
    approvals
  • We made further progress in our intellectual property portfolio

This past quarter has achieved the most significant strategic accomplishments to date.  Your support has enabled us to
do so.

We hope this update is informative.  We are happy to answer any of your questions.  Thank you for your interest and
your investment.


Q2 2008 Investor Update

PluroGen Milestones and Accomplishment

Commercial Partner Activities and Product Development
  • PluroGen signed a Letter of Intent with PNG Gerolymatos SA
  • In the US, provides PluroGen access to 25,000 drug stores
                        - For example Wal Mart, Rite Aid, Walgreens, Pathmark, Harmon Drugs and others
                        - Internet outlets such as Drugstore.com
  • Provides PluroGen access in key EU countries to the drug store, hospital, animal health and cosmetic
    markets
  • Initial scope of the agreement targeted to distribution, joint new product development and regulatory
    collaboration
  • Initial products of interest include:
    - Medical device wound barrier products based on PluroGel™ Silver Sulfadiazine (topical gels and
    dressings)
                             - Medical device wound & skin cleansing products based on PluroGel™
                             - Regulatory exempt wound covers based on PluroGel™ (topical gels and dressings)
                             - OTC products based on both company’s technologies
                             - Cosmetic products based on PluroGel™
                             - Animal health products derived from above
  • PNG Gerolymatos has 4 business segments:  Pharmaceutical, OTC, Consumer and Animal Health
  • PNG Gerolymatos has operations and does business in the US, major countries in Europe and the far East
  •  Welcare placed its 1st commercial order for PluroGel™ concentrate
  • Welcare introduced 2 medical devices with PluroGel™ at the prestigious European Wound Management
    Congress
  • Welcare is a European medical device manufacturer and marketer
  • Welcare is providing Plurogen entry into a new market:  the medical wound and skin cleansing market
  • Derma Sciences delivered the 2nd set of dressing samples for PluroGen review
  • PluroGen continues discussion with other potential commercial partners as well

Sales and Marketing
  • Raised end-user pricing on our 1st product, PluroGel™ Silver Sulfadiazine to USD 75.00 per unit for the 400g jar
  • As part of our ongoing pricing and product reviews, our most recent survey of new product pricing, burn
    doctor field interviews and our own new product features support this increase in price
  • The increase in price has considerable upside impact on our financial projections:
  • 1st 5 years total revenue increases by $ 185 million
  • 1st 5 years total operating profit increases by $ 154 million
  • Gross margins increase from the high 60%’s to the high 80%’s
  • Desirability of PluroGen and our products, and therefore our exit value, is increased

Regulatory
  • Aggressively pursuing medical device regulatory approval for PluroGel™ Silver Sulfadiazine
  • Completed draft of the US FDA 510(k) for medical device approval
  • PNG Gerolymatos began EU regulatory work
  • Identified final testing required for 510(k), in negotiation with contract labs
  • Welcare performing testing to support their EU medical device approval for our PluroGel™ ingredient
  • 1st test complete with positive results; results will be used to support new sales & marketing claims
  • 2nd set of tests targeted to complete in Q3 08
  • Registered with FDA to sell FDA-exempt OTC PluroGel™ wound cover  products (gels and dressings)
  • PluroGen is cleared by FDA to sell
  • Adds the OTC market for Plurogen technology and products
  • Opened talks for additional products with current partners and new potential partners
  • Continue to maintain low expense, forward activity for drug approval for PluroGel™ Silver Sulfadiazine
  • Advance preparation for any future drug claims we determine to pursue

Intellectual Property
  • Converted and filed the provisional patent to a patent application for our gel’s activity to enhance blood flow
  • Continue to explore licensing IP/technology rights to Dr. Katz’s adipose (fat derived) stem cells for wound
    healing

Manufacturing
  • PluroGel™ Silver Sulfadiazine production equipment received and in setup
  • Series A funding required to progress build of 1st production run
  • Initiated search for manufacturing capacity to make PluroGel™ concentrate for Welcare
  • Passed month 3 testing of long term accelerated stability test of our PluroGel™ Silver Sulfadiazine

Funding
  • Series A Offering released in this quarter
  • Received signed subscription agreements for $275, 000 of the $2.0 million to be raised
  • Currently pursuing both institutional and private capital investors
  • Contracted Landmark Capital Corporation to help in the Series A fundraising


Neal Koller

NGK/sa