August 11, 2000

Contact:
Dr. Mervyn Jacobson
CEO/President, XY Inc.
970-491-4764

A WORLD FIRST: COLORADO FIRM MAKES SEXED SPERM FOR CATTLE AVAILABLE FOR UK FARMERS TO BUY

     FORT COLLINS, COLO.--It's a world first: Sexed sperm for cattle breeding is commercially available in the United Kingdom--thanks to XY Inc., a Colorado firm and world leader in the research, development and commercialization of techniques to pre-select the sex of non-human mammals.
      The Fort Collins-based biotechnology company has made it possible for UK farmers to be the first in the world to purchase cattle sperm that allows them to pre-select the sex of dairy calves before the animals are conceived.
      XY Inc. joined Cogent-a cattle-breeding cooperative in England and XY Inc.'s United Kingdom licensee-to announce sexed sperm now is commercially available in the UK. The break-through announcement was made at the British Royal Agricultural Show, Stoneleigh, UK.
     " Commercialization of sperm sexing will revolutionize herd management by improving breeding efficiency and herd quality and provide strong animal-welfare benefits," said Dr. Mervyn Jacobson, XY Inc.'s chief executive officer and president. "This truly is a world breakthrough."
      Using a high-speed cell-sorting machine called a MoFlo, XY Inc. and Cogent researchers separate dairy-cattle sperm that carry the X chromosome and produce females from sperm that carry the Y chromosome and produce males. Sperm with the preferred chromosome then are artificially inseminated into heifer cows (cows under age three that have not calved before). The sorting technique is 90 percent accurate.
      Jacobson noted: "Using XY Inc.'s method to select for female calves makes the calving process much easier for cows, especially those calving for the first time since female calves usually are smaller and easier to deliver."
      Cogent, which was created in 1995 by the Duke of Westminster in Chester, England, to improve the quality of the UK's dairy herds, reported 93 percent of calves born during field trials were female - as desired.
      Traditionally, dairy-industry breeders want three outcomes from a pregnancy: Female calves for herd replacements, milk production and trouble-free heifer calvings.
     " Using artificial insemination and sexed sperm together, every pregnancy can be a valuable pregnancy," Jacobson said.
      Prior to the availability of sexed sperm, an average of 600,000 newly born male dairy calves are slaughtered and incinerated each year in the UK.
     " Using our method, every calf will be a wanted calf," Jacobson said.
      Jacobson noted that XY Inc. chose to first commercialize sexed sperm in the UK for two reasons: To help alleviate the dairy crisis the country is experiencing and because of Cogent's strong research collaboration with XY.
      Last summer, the British government ended subsidies of more than £28 million ($42 million U.S.) that compensated dairy farmers for unwanted male calves. Stories quickly appeared throughout the British media about desperate farmers slaughtering or abandoning their male dairy calves.
      In the coming years, XY Inc. plans to offer its technology worldwide and already has been negotiating with potential licensees in various countries. XY Inc. officials recently signed research agreements with Goyaike S.A., a leading cattle-breeding company in Argentina, and two leading cattle-breeding companies in Japan. Each company has entered into research collaborations with XY Inc. and secured future rights to commercialize XY Inc.'s technology in their respective countries.
      In addition, organizations worldwide continue to seek research collaborations, potential partnerships or possible licensing agreements with XY Inc., including: Russian Agricultural University in Moscow; Swiss Embryo Transfer, Switzerland; FAL, Germany; University of Sydney, Australia; Henry Doorley Zoo, Nebraska; and the Thoroughbred Breeders Association, Britain.
     " XY Inc. continues to talk to several American companies and hopes soon to announce its first U.S. licensees," Jacobson said.

XY Inc.
      Formed in mid-1996, XY Inc.'s initial mission was to offer gender selection to the United States dairy industry by way of sorting sperm with a flow cytometer into "X" and "Y" bearing populations, as an enhancement to artificial insemination.
      Today, XY Inc. has expanded its mission and now is the global leader in the research, development and commercialization of sex selection for all relevant non-human mammals, including cows, horses, pigs, endangered species and more.
      XY Inc. is the master licensee in control of all sperm sorting in non-human mammals worldwide using technologies developed by U.S. Department of Agriculture, Colorado State University and Cytomation, a Colorado-based company that develops advanced flow cytometers.
      XY Inc.'s successes are many: XY Inc. scientists produced "Call Me Madam," the world's first sex-selected foal in 1998, the world's first sex-selected calf using frozen sexed semen and artificial insemination in 1999 and the world's first sex-selected foals using sexed semen and artificial insemination in 1999.
      For more information on XY Inc., call 970-491-4764.