Enterologics to acquire BioBalance from NYHC

Enterologics, Inc. (ELGO.OB) announced today that it is acquiring all the shares of The BioBalance Corporation and its subsidiary BioBalance LLC from New York Health Care, Inc. ("NYHC"). With this purchase Enterologics will acquire E. coli M17, or Probactrix®, a probiotic product being developed as a biologic drug under an active Investigational New Drug (IND) application for a pouchitis-related indication. Probiotics are live microorganisms (in most cases, bacteria) that are similar to or derived from beneficial microorganisms found in the human gut. They are also called "friendly bacteria" or "good bacteria."

The acquisition also includes BioBalance's portfolio of intellectual property and regulatory filings. Terms of the acquisition include cash, stock and a 3-year promissory note. The sale is contingent upon receiving approval by NYHC's shareholders, with an expected closing date of no later than September 30, 2011.

"By providing us with our first pipeline product, E. coli M17, the acquisition of BioBalance fulfills a key milestone in Enterologics' business strategy," said Bob Hoerr, Enterologics' president. "E. coli M17 coupled with the new formulation technology we are developing with Universal Stabilization Technologies provides us with a solid platform for our first probiotic biologic drug product. The fact that BioBalance was able to establish an active IND for E. coli M17 made it very attractive for acquisition. This further demonstrates the validity of our planned commercialization of high value probiotics as biologic drugs for specific gastrointestinal (GI) conditions."

Dr. Hoerr stated that the formal development of E. coli M17 could begin quickly once the deal closes. He continued that the Company plans to reinitiate manufacturing with a partner as soon as feasible after closing. When cGMP production and the necessary financing are in place, the Company intends to begin clinical trials under the IND.

"The sale of BioBalance will enable New York Health Care to concentrate on its core business," said Murry Englard, CEO of NYHC. "We are also very pleased that Enterologics is committed to developing E. coli M17 as a therapeutic agent. We made significant progress on this course until the economic downturn made obtaining the required financing impossible. As a focused GI therapeutic company, Enterologics is ideally suited to be successful."