June 30, 2003

Contact:
Dr. Mervyn Jacobson, XY Inc., USA, 970-310-3857
Laura Sandell, ISIS Public Relations, 970-484-7500

"FIRST LADY" IS TRIPLE 'CROWN' IN THE EQUINE REPRODUCTION WORLD: FIRST SEXED OFFSPRING OF THE WORLD'S FIRST SEXED MARE AND STALLION

FORT COLLINS--She may not be in horse racing, but "First Lady" is definitely triple crown in the world of equine reproduction. This eight-week-old filly carries three "firsts" on her back: She is the first sex-selected offspring of the world's first sex-selected mare and first sex-selected stallion.
      Born April 20, First Lady is the daughter of "Call Me Madam," the horse that captured global attention in 1998 as the first horse in the world to have her sex selected prior to conception via a cutting-edge cell-sorting technology developed by researchers led by XY Inc., a global biotech company headquartered in Fort Collins, Colo.
      The sperm-sorting technology, one of the world's most promising biotech industries, separates sperm that carry the X chromosome and produce females from sperm that carry the Y chromosome and produce males.
      First Lady's sire is "Augustus Primus," born Aug. 1, 1999 at XY. "Gus" is the first sexed male horse ever produced, using artificial insemination and low-dose sexed sperm. Typically 500 million sperm are needed to impregnate a mare. Gus was conceived using sperm dosages of just 25 million sperm, which is 5 percent of the dosage regarded, until his conception, as necessary for AI impregnation of horses.
      First Lady even beat those odds. An extremely low dose of fresh (non-frozen), sexed sperm--17 million-from Gus was combined with AI to impregnate Call Me Madam and conceive First Lady. The dose is 3 percent of the recognized "standard" dosage used with AI in horses.
      As a maiden mare, Call Me Madam was artificially inseminated by XY Inc. scientists on May 21, 2002, at the Animal Reproduction Biotechnology Laboratory, Colorado State University. She was "settled" (pregnant) by June 4 and had a normal 11-month pregnancy and standard delivery. Gus was collected for the first time-without flushing--to impregnate Call Me Madam.
     " First Lady's birth is solid evidence that the technology XY Inc., is offering does not adversely affect the reproductive capabilities of the horses we're producing," says Dr. Mervyn Jacobson, XY Inc. chief executive officer and president.
      XY Inc. researchers have made rapid progress since 1998 when they successfully combined surgical techniques and sexed semen to produce Call Me Madam.
     " Our research breakthroughs since 1998 indicate equine sperm can survive the sperm-sorting procedure and be successfully combined with AI to produce beautiful foals," Jacobson explained. XY Inc. anticipates signing its first equine commercial license in the United States this year. XY Inc. issued its first equine license to a leading horse breeder in Argentina in 2002.
      Following Gus's 1999 birth, and that of three other foals conceived using low-dose sexed sperm and AI, XY Inc., Inc. produced a series of breakthroughs in equine reproduction.
      In 2000, XY Inc. produced Nadine, the first foal ever produced with sorted sperm which had been frozen and thawed before being inseminated using AI.
      In 2001, Star Man, a dark chestnut colt, was born at XY Inc.'s equine breeding facility, Moondrift Farm. His birth signaled a major victory in moving specialty equine breeding from the research lab into the commercial arena--where sperm sexing in horses is a potential multimillion-dollar industry. Star Man also was the first live foal produced from "fresh-shipped," sorted, low-dose, sperm via artificial insemination. The breakthrough: Even 18-hours after collection and shipment without cooling, delicate equine sperm can be sorted and artificially inseminated to produce a live foal of the desired sex.
      In 2002, XY Inc. working with Australian researchers combined sexed equine sperm with embryo transfer to successfully produce offspring from high quality polo mares.
      Applications of AI using advanced sperm sorting could be in excess of $300 million a year for the U.S. horse industry alone, said Jacobson. The market outside the U.S. could more than double those projections, he added.
      XY Inc., which holds exclusive global rights to sperm sorting in all non-human mammals, was formed in 1996 as a joint venture of the Colorado State University Research Foundation and Cytomation Inc., of Fort Collins, Colo.
     " The birth of this lovely filly is justification to go forward with additional development work to bring to market these sex-selection breeding techniques for horses," Jacobson noted.