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2015-09-09

Xenetic Biosciences, Inc.: Xenetic Biosciences (XBIO) Contracts With Baxter International Inc Have Been Assigned to Baxalta Incorporated Following the Company

LEXINGTON, Mass., Sept. 09, 2015 (GLOBE NEWSWIRE) -- Xenetic Biosciences, Inc.
(OTCQB:XBIO), a biopharmaceutical company focused on developing
next-generation biologic drugs and novel oncology therapeutics, announces
that its contracts and arrangements with Baxter Healthcare SA ("Baxter SA")
and Baxter Healthcare Corporation (together referred to as "Baxter")
(NYSE:BAX) have now been assigned to Baxalta Incorporated (NYSE:BXLT)
("Baxalta") as part of the spin out of the company's biopharmaceutical
business.

Xenetic has an exclusive research, development, license and supply agreement
with Baxalta (formerly Baxter Healthcare SA and Baxter Healthcare
Corporation) to develop products with an extended half-life of certain
proteins and molecules using the Company's patent protected PolyXen®
technology whereby polysialic acid ("PSA" - a chain of polysialic acids) is
conjugated with Baxter's proprietary molecule(s). The resulting drug
candidate is designed to create a longer-acting haemophilia drug, a
polysialylated recombinant Factor VIII ("rFVIII") protein, than what is
currently available on the market. Baxter also has rights that extend to
treatments of the failure of blood to coagulate. Baxalta expects to begin
Clinical Trial Authorization (CTA, EU) and Investigational New Drug (IND, US)
submissions on this novel drug candidate in the coming months.

As a result of a revised license deal in January 2014, the Company is entitled
to up to $100 million in potential development, regulatory, sales and
deadline extension receipts, which are contingent on the performance of
Baxalta achieving certain milestones. The Company is also entitled to
royalties on potential net sales. In connection with this deal, Baxalta also
made a $10 million equity investment at a price of $0.935 per share, which is
a post money market cap of approximately $140 million.

Baxalta Incorporated is a newly established global biopharmaceutical leader
developing, manufacturing and commercializing therapies for orphan diseases
and underserved conditions in hematology, oncology and immunology.

Baxalta is a related party of Xenetic, with a share ownership of approximately
8.7%.

About PolyXen

®

PolyXen® is an enabling platform technology for protein drug delivery. It uses
the natural polymer polysialic acid (PSA) to prolong the drug's half-life and
potentially improve the stability of therapeutic peptides and proteins. Both
the site of attachment and the length of the PSA chain can enhance the
properties of the therapeutic by changing the apparent hydrodynamic radius of
the molecule which, in turn, changes a number of the biological
characteristics of the therapeutic. It can also be used for small molecule
drugs.

About Xenetic Biosciences

Xenetic Biosciences is a biopharmaceutical company developing next-generation
biologic drugs and novel oncology therapeutics. Xenetic's proprietary drug
technology platforms include PolyXen®, designed to develop next generation
biologic drugs by extending the efficacy, safety and half-life of biologic
drugs, and OncoHist(TM) for the development of novel oncology drugs focused
on orphan indications.

Xenetic's lead product candidates include ErepoXen®, a polysialylated form of
erythropoietin (EPO) for the treatment of anemia in pre-dialysis patients
with chronic kidney disease, and OncoHist(TM), a novel recombinant human
histone H1.3 molecule for the treatment of refractory Acute Myeloid Leukemia
(AML) with potential to treat numerous other cancer indications. Xenetic is
collaborating with Russian-based OJSC Pharmsynthez (who is an affiliate of a
significant shareholder in Xenetic) and the Serum Institute of India to test
additional drug and vaccine candidates and to de-risk the development process
with clinical data generated in Russia and India before Xenetic takes these
candidates into the clinic in the Western markets.

Xenetic is also developing a broad pipeline of clinical candidates for next
generation biologics and novel oncology therapeutics in a number of orphan
disease indications. For more information, please visit the company's website
at www.xeneticbio.com.

Baxter Healthcare:

Xenetic is working together with Baxter International Inc. to develop a novel
series of polysialylated blood coagulation factors, including a next
generation Factor VIII. This collaboration relies on the PolyXen technology
to conjugate PSA to therapeutic blood-clotting factors, with the goal of
improving the pharmacokinetic profile and extending the active life of these
biologic molecules. Baxter is one of the Company's largest shareholders
having invested in a number of rounds with the most recent investment of $10M
last year. The agreement is exclusive research, development and license
agreement grants Baxter a worldwide, exclusive, royalty-bearing license to
Xenetic's PSA patented and proprietary technology in combination with
Baxter's proprietary molecules designed for the treatment of blood and
bleeding disorders. Under the agreement, Xenetic may receive regulatory and
sales target receipts for total potential milestones of up to $100 million
plus royalties on sales.

Forward-Looking Statements

This release contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995, including but not limited
to, the potential safety, tolerability and efficacy of our product candidates
and the advancement of our clinical trials. Forward-looking statements can be
identified by terminology such as "anticipate," "believe," "could," "could
increase the likelihood," "estimate," "expect," "intend," "is planned,"
"may," "should," "will," "will enable," "would be expected," "designed to,"
"look forward," "may provide," "would" or similar terms, variations of such
terms or the negative of those terms. Any forward-looking statements in this
press release are based on management's current expectations of future events
and are subject to a number of risks and uncertainties that could cause
actual results to differ materially and adversely from those set forth in or
implied by such forward-looking statements. These risks and uncertainties
include, but are not limited to, the risk of cessation or delay of any of the
ongoing or planned clinical trials and/or our development of our product
candidates, the risk that the results of previously conducted studies
involving similar product candidates will not be repeated or observed in
ongoing or future studies involving current product candidates, the risk that
our collaboration with Baxter will not continue or will not be successful,
and the risk that any one or more of our product candidates will not be
successfully developed and commercialized. For a discussion of other risks
and uncertainties, and other important factors, any of which could cause our
actual results to differ from those contained in the forward-looking
statements, see the section entitled "Risk Factors" in our Annual Report on
Form 10-K, as well as discussions of potential risks, uncertainties, and
other important factors in our subsequent filings with the Securities and
Exchange Commission. All information in this press release is as of the date
of the release, and Xenetic undertakes no duty to update this information
unless required by law.
Contact:

Xenetic Biosciences Inc.

www.xeneticbio.com
M. Scott Maguire, Chief Executive Officer
781 778 7720
j.mccusker@xeneticbio.com

UK/European contact:

Arlington Group Asset Management Limited
Ross Ainger
+44 (0)207 389 5012
rainger@agam.co.uk

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Xenetic Biosciences, Inc. via Globenewswire

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