May 28, 1999

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

CALL ME MADAM'S BIRTH SPURS INTEREST THROUGHOUT HORSE INDUSTRY

FORT COLLINS, COLO--Call Me Madam's revolutionary birth 10 months ago has spurred intense interest throughout the horse industry and brought international attention to XY Inc.--the Colorado company that produced the world's first horse to have her sex selected prior to conception.
     " We continue to receive calls from horse and scientific journals, veterinarians, breeders and others from around the world, all wanting to know when the technology will be available," said Dr. Mervyn Jacobson, chief executive officer of XY. "Everyone in the horse business who has heard about Call Me Madam recognizes the significance of her birth and the importance of being able to select whether a horse will be male or female before it's even conceived."
      Call Me Madam's pre-assigned gender Aug. 6, 998, was a first in the horse industry and a major breakthrough in one of the world's most promising biotech industries--sperm sorting, which separates sperm that carry the X chromosome and produce females from sperm that carry the Y chromosome and produce males.
     " Sex selection is perhaps the most sought-after reproductive technology of all time," said George Seidel, XY Inc.'s director of science and a world-renowned Colorado State University reproductive psysiologist.
      Call Me Madam, born on a ranch outside Fort Collins, Colo., was carried by a mare named Feisty, impregnated via oviductal insemination, using sorted semen that was ntroduced by flank incision.
     " Her birth truly was historic," Jacobson said. "For 5,000 years people throughout the world have yearned to determine the sex of their animal herds. The birth of Call Me Madam certainly is a dream come true for many horse lovers."
      After her summertime birth, more than 500 newspaper, television and radio stories about the one-of-a-kind filly appeared in media including the New York Times and Equus horse magazine. Major media in the U.S., Japan and Europe carried stories.
      Today, the frisky chestnut-colored filly, which Jacobson describes as a "A healthy, growing horse with plenty of personality," spends her days at a Rocky Mountain ranch. "She's absolutely beautiful," Jacobson added.
      Mirroring the filly's steady growth is XY Inc., the company credited with the breakthrough that led to Call Me Madam's birth.
     " XY Inc.'s equine-research program is advancing much faster than expected," Jacobson said. "We originally thought it would take 5-10 years to bring a product to the horse market. We're now revamping our projections. I expect that in perhaps three years, horse breeders will be able--for the first time--to select the sex of a horse before its conceived."
      XY Inc.'s success with Call Me Madam and the company's parallel breakthroughs in sperm-sorting research for cattle have drawn the attention of companies around the world vying to serve as XY Inc. licensees. When XY Inc. commercializes its sperm-sorting procedure in the coming years, selected licensees will offer the technology to a broad market of breeders and other equine interests.
      "I've heard from more than 100 leading research institutes, companies and cooperatives not only in the U.S. but also in Japan, Russia, Argentina, Denmark, Germany and so on. All are competing for our attention," Jacobson said.
      Already, several contacts have resulted in substantial funding support for XY Inc., which has allowed the Colorado biotechnology firm to hire additional research staff and build strong research collaborations with universities in the U.S., Europe and Australia.
      For example, Cogent, a British membership-based breeding program launched in 1995 by the Duke of Westminster to genetically improve the United Kingdom's dairy herds, recently invested $1.5 million in XY Inc. to support cutting-edge research into sperm-sorting techniques.
      Jacobson noted applications of advanced sperm-sorting for artificial insemination in the U.S. horse industry alone could be in excess of $300 million a year. An equivalent potential market exists in the U.S. cattle and pig industries. The market outside the U.S. could more than double those projections, he added.
      "From a horse breeder's perspective, time is money," said Brigitte Von Rechenberg, head of the muscular-surgical unit of the University of Zurich, Switzerland, and owner of top-class Arabian horses.
     " A horse's gestation cycle typically is almost a year long. That's a long and expensive wait for a foal that's the wrong sex. If breeders can select a foal's sex, they can plan and build their business based on what clients are interested in buying, breeding or raising for show."