California's drug therapy firm Viral Genetics launches subsidiary, VG Energy, to market its algae-enhancing biofuels technology that company says can increase oil yields by as much as 300%

SAN MARINO, California , December 7, 2010 (press release) – Viral Genetics, Inc., (Pinksheets: VRAL.PK) has launched a subsidiary called “VG Energy, Inc.” The new entity is majority-owned by Viral Genetics and its current shareholders, and was formed to market the company’s biofuel technology.

“The new brand will help open doors with energy companies,” said Viral Genetics’ CEO Haig Keledjian, who will serve as CEO of the new subsidiary. “We also believe it will help us attract investors interested in cost-effective, green energy solutions.”

VG Energy is marketing an algae-enhancing technology, which has shown to increase the yield of oil production from algae by as much as 300%. That oil can be harvested for use as a cost-effective alternative to fossil fuels.

Some of the studies were undertaken at the Texas Life Sciences Collaboration Center, with current studies being funded by the Texas Emerging Technology Fund, a $200 million initiative created by the Texas Legislature in 2005. VG Energy lead researcher, Dr. M. Karen Newell-Rogers, recently obtained a $750,000 grant from the fund to study and develop the yield-enhancing technology in her academic research laboratories at the Texas AgriLife Research Blacklands campus.

”We believe our approach to biofuels can change the economics of green energy by simply increasing the oil yield in certain plants,” said Keledjian. “Many competitive technologies focus on genetically-modifying algae strains, and developing expensive new growing methods.”

John Sheehan noted biofuel expert and advisor to Viral Genetics who was introduced to the company via Richard Branson and his Carbon War Room to assist with this effort, said, “They are in the right place at the right time with this technology. Identifying and controlling the trigger for lipid production in algae has long been the holy grail of algal biofuels technology. Many big players are working in this field, and whoever is first to translate such a discovery into an economic process will leapfrog to the front of the pack.”

According to Sheehan, “The VG Energy brand makes the organization more approachable to all players, big and small, and we are excited to enter into the testing, partnering and negotiating stage this early in the company’s development.”

Dr. M. Karen Newell-Rogers is an inventor on a patent and several patent applications under exclusive license to VG Energy directed to methods for dramatically increasing the volume of oil, also called lipids, naturally produced by algae and other plants. Until Newell’s discoveries, developing a means of increasing the oil production of plants was one of the chief barriers to bringing cost-effective biofuels to the market.

Newell-Rogers’ discoveries have the benefit of leveraging a plant source that is not a food crop and that does not require food resources such as arable land and water, well-referenced problems for corn-based ethanol biofuels.

“Our research seems to indicate that we can trigger plant cells to increase their fat stores,” said Newell-Rogers. “We can manipulate plant cells so that they store oil and eventually release those reserves instead of burning the fat for fuel when glucose stores are low. The end result is more oil is available for processing into a biofuel.”

Dr Newell-Rogers recently presented her findings at an energy conference attended by T. Boone Pickens, Ted Turner, James Cameron, New York Times columnist Thomas Friedman and Under Secretary of Energy at the U.S. Department of Energy Dr. Kristina Johnson, among others.

About Viral Genetics, Inc.

San Marino, California-based Viral Genetics discovers drug therapies. Founded in 1994, the biotech company is researching treatments for HIV/AIDS, Lyme Disease, Strep, Staph and drug resistant tumors. A wholly owned subsidiary called VG Energy is dedicated to exploring biofuel and agricultural applications for one of the technologies in its licensed portfolio. Online at www.viralgenetics.com.

About VG Energy, Inc.

VG Energy Inc. is an alternative energy and agricultural biotech company that is a majority-owned subsidiary of Viral Genetics Inc., a biotechnology company researching new treatments and methods of detection for diseases including cancer, HIV/AIDS and others. Using its Metabolic Disruption technology (“MDT”), Viral Genetics’ cancer research led to discoveries with major consequences in a wide variety of other industries, including bio-fuel and vegetable oils. VG Energy Inc. holds the exclusive worldwide rights to the licensed MDT patents for us in the increase of production of various plant-derived oils from algae and seeds. Importantly, these pivotal discoveries promise to allow the biofuel industry to overcome its major obstacle in the area of production efficiency: namely an increase in production yields leading to feasible economic returns on investment allowing renewable biodiesel to be competitive with fossil fuels. Online at www.vgenergy.org.

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