Arbios Systems, Inc. (OTC: ABOS) announced today that the U.S. Food & Drug Administration (FDA) has allowed expansion of the eligibility criteria for the ongoing clinical trial of its SEPET(TM) Liver Assist Device to include patients with hepatic encephalopathy due to combined liver and kidney (renal) failure. The FDA allowance should significantly widen the pool of patients eligible for enrollment in the trial and represents the Company's first step towards investigating use of the SEPET(TM) Liver Assist Device in multiple organ failure indications.

The Company also announced today that the University of California at San Diego (UCSD) Medical Center, the third clinical site to join the SEPET(TM) trial, has treated its first patient with the SEPET(TM) Liver Assist Device.

Santiago J. Munoz, M.D., a principal investigator and Head of the Division of Hepatology and Medical Director of the Liver Transplant Program at the Albert Einstein Medical Center in Philadelphia, which has treated the most patients to date with the SEPET(TM) Liver Assist Device, commented, "Many of the same blood toxins and inflammatory mediators involved in liver failure are thought to lead to failure of other organs, such as the kidney. So-called 'Hepato-Renal Syndrome' or HRS of the sub-acute Type 2 form is quite common in patients experiencing progressive liver failure, and the available therapeutic alternatives for such patients are limited in their effectiveness. Use of SEPET(TM) to filter the blood of such patients could lead to improved status of both the liver and kidney, and future inclusion of these patients in an indication for SEPET(TM) therapy could markedly expand the utility of the device."

"We are very pleased that the FDA has allowed expanded enrollment for our SEPET(TM) clinical trial," said Walter C. Ogier, President and Chief Executive Officer of Arbios. "We have been frustrated with a modest rate of enrollment in the trial, and we are confident that this allowance will not only facilitate more rapid completion of the trial but also result in a clinical patient database that is more relevant to the broader commercial market for a product with the capabilities of SEPET(TM). Having UCSD now actively enrolling patients, should accelerate the pace of the trial even further."

Early SEPET(TM) Clinical Results

In May 2006, Arbios announced favorable interim safety and patient outcome results of the feasibility clinical trial of the SEPET(TM) Liver Assist Device. The objectives of the trial are to assess the safety and tolerability of SEPET(TM), as well as its preliminary effectiveness in reversing liver failure and resultant encephalopathy. Up to 20 patients will take part in the trial. Encephalopathy associated with liver failure is a life-threatening condition involving brain dysfunction, which is caused by toxins that accumulate in the bloodstream. If liver failure is not reversed, it can lead to the shutdown of multiple organs and death. The trial's interim results showed that all patients treated in the trial had met the prospective clinical effectiveness endpoint of the trial, i.e., at least a 2-stage improvement in encephalopathy, and most of the treated patients had been released from the intensive care unit within 48 hours. Since commencing, the trial has been expanded to include all four clinical stages of encephalopathy and now, to include patients suffering from both liver and kidney failure who do not require dialysis therapy.

About SEPET(TM) Liver Assist Device

The SEPET(TM) Liver Assist Device is a sterile, disposable cartridge containing microporous hollow fibers with unique permeability characteristics. When a patient's blood is passed through these fibers, blood plasma components of specific molecular weights are expressed through the micropores, thereby cleansing the blood of harmful impurities (i.e., hepatic failure toxins as well as various mediators of inflammation and inhibitors of liver regeneration). These substances would otherwise progressively accumulate in the patient's bloodstream during liver failure, causing hypotension, increasing risk of sepsis development and accelerating damage to the liver, lungs and other organs, including the brain and kidneys, and suppressing the function and regeneration of the liver. SEPET(TM) is designed for use with standard blood dialysis systems available in hospital intensive care units.

About Liver Disease

According to the American Liver Foundation, chronic liver disease is the tenth leading cause of death in the U.S., resulting in approximately $10 billion in annual healthcare costs. The World Health Organization estimates that 20 million people worldwide have cirrhosis of the liver and/or liver cancer, arising predominantly among the estimated 500 million persons (nearly 10% of the world population) who are afflicted with persistent hepatitis B or hepatitis C viral infections. Liver failure may also result from excessive alcohol consumption, aggressive forms of fatty liver disease or other chronic liver disorders. It can also be caused by ingestion of common medications, such as acetaminophen, contaminated herbal medicines, or toxic mushrooms. An estimated one to two million persons worldwide die each year from liver failure, with more than 50,000 deaths per year in the United States. Liver failure typically develops slowly, and its progression usually goes unnoticed until it becomes life-threatening.

It occurs in persons of all ages but is most common (representing the fifth leading cause of death) among 25 to 65 year olds.

There is currently no satisfactory therapy available to treat patients in liver failure, other than maintenance and monitoring of vital functions and keeping patients stable through provision of intravenous fluids and blood products, administration of antibiotics and support of vital functions, such as respiration. While a patient's liver may regenerate on its own to varying degrees, a chronic liver failure patient often continues to lose more and more liver cell mass and function as the disease progresses and ultimately needs to undergo liver transplant surgery. A shortage of livers and other factors make such therapy unavailable to the large majority of liver failure patients worldwide.

Arbios Systems, Inc. is developing proprietary medical devices and cell-based therapies to enhance the survival of millions of patients each year who experience, or are at risk for, life-threatening episodes of liver failure. The Arbios product candidate portfolio includes the SEPET(TM) Liver Assist Device, a novel blood purification therapy that provides enhanced "liver dialysis," and the HepatAssist(TM) Cell-Based Liver Support System, a bioartificial liver that combines blood detoxification with liver cell therapy to replace whole liver function in patients with the most severe forms of liver failure. For more information on the Company, please visit arbios.

This press release contains forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the goals and results of clinical trials, compliance with regulatory requirements, labeling of the Company's products, the need for subsequent substantial additional financing to complete clinical development of its products, future markets and demand for the Company's products, and Arbios' ability to successfully market its products and technologies. These statements represent the judgment of Arbios' management as of this date and are subject to risks and uncertainties that could materially affect the Company. Arbios cautions investors that there can be no assurance that actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements. Please refer to our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2005 for a description of risks that may affect our results or business conditions. The Company does not undertake any obligation to publicly release the result of any revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events except as required by law. SEPET(TM) and HepatAssist(TM) are trademarks of Arbios Systems, Inc.

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