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Sepragen Announces Agreement With Carbery Food Ingredients

Union City, CA, October 15, 1998 - Sepragen Corporation (OTC BB: SPGNU, SPGNA, SPGNW) announced today the signing of a definitive licensing agreement for its Sepralac® Process with Carbery Food Ingredients, of Ballineen, Ireland, a leading European manufacturer of "high-end" dairy based food ingredients.

Under the agreement, Carbery will have manufacturing and marketing rights to certain products produced from the Sepralac® Process. In return Sepragen will receive nearly $500,000 in license and initial equipment purchase. In addition, the Company will receive on-going royalties for its technology.

Sepragen's patented Sepralac® Process extracts added value ingredients from whey, a by-product of cheese manufacturing currently used to make low-value commodity products. According to Sepragen's Senior Scientist Zahid Mozaffar, Ph.D., the Company's process technology "could play a particularly key role as a significant step toward the development of an infant formula that most closely approximates mother's milk."

The Sepralac®-extracted high-value ingredients are also expected to find increased use in health-enhancing nutraceuticals, sports and performance foods and fat-free specialty diets.

John Holland, Operations Director, Carbery Food Ingredients, commented, "Based on experience to date with Sepralac®'s respective manufacturing and customer benefits, we believe our alliance with Sepragen will make measurable contributions to Carbery's ingredients business."

"Carbery's strategy is one of leadership and profitability through technology innovation," he continued. "Our history has been one of 'technology push.' Sepragen's technology will allow us to explore and develop emerging high value markets not only in infant nutrition but also in nutritional supplements related to muscle development, weight loss and health enhancement."

"As the market for these high-value ingredients grows, Carbery will be strategically positioned to further develop the application of whey fractions like alpha-lactalbumin, beta-lactoglobulin, and lactoferrin in such sectors."

Carbery has tested the Sepralac® Process for more than a year and produced various products from whey, in particular alpha-lactalbumin, which has been supplied to certain leading infant formula companies for clinical testing. Published results have shown that the amino acid serum profile of infants fed with alpha-lactalbumin enriched formula is closer to that of breast-fed babies as compared with that of formula-fed babies. Carbery is an established supplier to some of the world's leading infant formula companies.

Sepragen President and CEO Vinit Saxena said, "The agreement with Carbery marks another important step in commercializing Sepragen's technology in the dairy business. It also illustrates our commitment to create long-term value for our licensees and share in that value creation along with traditional sales of equipment and consumables."

"We expect to work closely with Carbery as they move through the phase of market development into large scale manufacture," Saxena added. "We look forward to a long, mutually profitable relationship."

Carbery's portfolio includes a variety of cheeses, food ingredients including protein isolates and infant formula ingredients, as well as lactose derived food grade alcohol. Carbery is viewed as a pioneer in the dairy business and operates at the frontiers of technology development. It was the first company in Europe to commercialize WPC production using membrane separations and also the first to produce food grade alcohol from lactose, both of which represent a significant share of Carbery's revenues.

Sepragen develops and sells processes and products using its proprietary radial flow chromatography systems for the dairy, citrus juice and biopharmaceutical markets. It recently announced a licensing agreement with another leading dairy ingredient producer. Evaluation of its processes with leading customers in the juice industry are currently in progress. In addition, Sepragen continues to market its line of Superflo® Columns, QuantaSep® automation systems, and SepraSorb® media to the biotechnology customer base.

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The statements in this release that relate to future events or performance, statements about growth, future regulatory clearances, levels of sales and market size and future manufacturing capacity and efficiencies are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties related to the development of markets for and commercial acceptance of the company's products and services, the availability of components, competitors' product introductions and other risks identified in the company's SEC filings. Actual results may differ from those described in these forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

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