Valentis, Inc. has entered an asset sale agreement with Cobra Biologics Ltd for certain bio manufacturing rights and intellectual property. Financial terms of the sale were not disclosed but the transaction includes a one-time cash payment to Valentis.

Valentis also announced that it would reduce its staff by approximately 60 per cent effective August 18, 2006. The remaining staff will continue to pursue strategic opportunities for the company including the sale or merger of the business, the sale of certain assets or other actions. Further, step-wise reductions in staff are anticipated.

Further, Alan C Mendelson tendered his resignation from the Board of Directors in light of announced plans that the company is assessing strategic opportunities including the sale or merger of the business and the sale of certain assets. Mendelson's law firm, Latham and Watkins LLP continues to advise Valentis with respect to such efforts, and the company and Mr Mendelson felt that he could be more helpful as counsel as we move forward.

Valentis is a biotechnology company that was engaged in the development of innovative products for peripheral arterial disease (PAD), a large and unsatisfied market.