CHIEF SCIENTIST GRANT TO XTLbio DEFERRED

    CHIEF SCIENTIST GRANT TO XTLbio DEFERRED

Rehovot, Israel, 21 May 2003 - XTL Biopharmaceuticals Ltd. (XTLbio) announced
today that it has received a letter from the Office of the Chief Scientist,
Ministry of Industry, Trade and Employment, State of Israel indicating that
certain grants that were due to be made available to the Company would be
withheld. XTLbio was to have received US$1.9 million this month and a further
US$1.5 million at a later date to support its product development

An English translation of the Hebrew text of the letter from the Office of the
Chief Scientist follows:

"From the news items published in the media, we are fearful that, as a result
of the purchase of shares of your company by Shore Capital, their intention,
among others, is to sell off the intellectual property of the Company.

As a long-standing supporter of the intellectual property, we are concerned
about this development and intend to withhold funds due to the Company until
the situation is clarified.

Regards,

Deputy Chief Scientist"

XTLbio President and Chief Executive Officer, Martin Becker, PhD, said, "This
is a serious development, showing that the uncertainty regarding the Company's
future direction is already starting to have an effect on our partner
relationships."

About XTLbio

XTL Biopharmaceuticals Ltd. (XTLbio) is the drug development company committed
to conquering hepatitis C in our time. XTLbio's HepeX(tm) product line - now in
clinical trials - has the potential to introduce revolutionary therapies for
viral hepatitis, including prevention of re-infection in transplanted livers,
the Company's primary focus, and a longer-term cocktail approach in treating
chronic illness. XTLbio believes its primary competitive advantage lies in its
patented Trimera(tm) technology, which enables the development of fully human
monoclonal antibodies and models of human disease for pre-clinical drug
validation. Established in 1993, XTLbio became a public company in 2000 with
shares traded on the London Stock Exchange under the symbol XTL.

About hepatitis C

Hepatitis C is a major public health concern. The World Health Organization
estimates that 170 million people worldwide are chronic carriers of the
hepatitis C virus (HCV) and that 3 to 4 million people are newly infected each
year. It is expected that 25 to 35% of these chronic patients will develop
progressive liver disease including cirrhosis and liver cancer. Hepatitis C is
the single leading cause of liver transplantation. The US Centers for Disease
Control and Prevention estimate that approximately 4 million people in the
United States (almost 2% of the population) have been infected with HCV, of
whom, approximately 3 million are chronically ill. Hepatitis C is the cause of
an estimated 8,000 to 10,000 deaths annually in the US.

About HCV-related liver transplant prophylaxis

Approximately 5% of chronic HCV patients will develop end-stage liver disease,
and ultimately may require liver transplantation. Today, there is a major
problem associated with HCV-related liver transplantation. Although the
infected liver - the major source of viral replication - has been removed,
free-floating virus in the patient's serum re-infects the healthy transplanted
liver in a matter of weeks. Disease progression in re-infected patients is
several times faster and, in many cases, a re-transplant becomes necessary. At
present, there is no available solution to this problem. The Company estimates
worldwide annual sales potential for HCV liver transplant prophylaxis at US$400
million.

About the treatment of chronic hepatitis C

The existing first-line chronic HCV therapy is often associated with a 50-60%
chance of success but is limited by severe side effects, including anaemia,
fatigue, hair loss and depression. Due to the relatively limited efficacy and
toxicity of this treatment, chronic HCV is still considered an unmet medical
need. Financial analysts estimate that worldwide annual sales for all products
treating chronic hepatitis C could reach US$4 billion in 2004.

HepeX(tm), Trimera(tm), XTL(tm) and XTLbio(tm) are trademarks of XTL Biopharmaceuticals
Ltd.

Contacts:

XTLbio

Dr. Martin Becker, President and CEO, Tel: [phone]

Financial Dynamics

David Yates, Sarah MacLeod, Tel: [phone]



END