July 24, 2002

News Release: Approval To Initiate Phase I Clinical Trial With Interferon Enhancing Therapy

Transition Therapeutics Inc. ("Transition") (TSXV: TTH) today announced that it has received approval of its Clinical Trial Application ("CTA") from Health Canada to begin Phase I human trials of its interferon enhancing therapy, a therapy that has been demonstrated in pre-clinical studies to be significantly more effective than interferon alone in the treatment of Multiple Sclerosis ("MS"). "The approval of the CTA allows Transition to progress this therapy to the next stage of development and demonstrates a significant milestone for the Company." said Tony Cruz, Chairman and CEO of Transition Therapeutics Inc.

Transition expects to begin dosing patients for this Phase I trial by the end of August and the trial should be complete by the end of 2002.

Interferon is the current gold standard in the treatment of MS and is also used for the treatment of Hepatitis C, Hepatitis B and Cancer. Worldwide sales of interferon are approximately US $5.3 billion. Transition previously reported that its interferon enhancing therapy significantly reduced the symptoms and pathologies associated with MS in several different animal models for MS. Transition has new data showing that this therapy also has more potent anti-viral and anti-proliferative effects than interferon alone and therefore may have applications in Hepatitis C, Hepatitis B and Cancer. Transition plans to perform additional pre-clinical studies in these areas.

About Transition Therapeutics

Transition Therapeutics Inc. is a publicly listed biopharmaceutical company developing innovative therapeutics focusing on the treatment of multiple sclerosis, diabetes and restenosis. Transition offers a deep product portfolio and a strong management team with expertise in product development. Transition's management intends to continue to build shareholder value by rapidly and cost effectively advancing products from discovery to the clinic and licensing to corporate partners.

Notice to Readers: Information contained in our press releases should be considered accurate only as of the date of the release and may be superseded by more recent information we have disclosed in later press releases, filings with the OSC or otherwise. Press releases may contain forward-looking statements based on the expectations of our management as of the date of the release. Actual results may materially differ based on many factors, including those described in the press releases.

Transition Therapeutics Inc.
415 Yonge Street, Ste. 1103
Toronto, Ontario M5B 2E7

Transition Therapeutics Inc.
Dr. Tony Cruz
Chief Executive Officer
(416) 260-7770, x.223
(416) 260-2886 (FAX)
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or
Transition Therapeutics Inc.
Catherine Auld
Chief Financial Officer
(416) 260-7770, x.224
(416) 260-2886 (FAX)
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www.transitiontherapeutics.com

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