Medgenics, Inc. (NYSE MKT: MDGN) (the Company) today announced second quarter 2016 financial results and provided a business update.

"We are very pleased with the Company's accomplishments during the first half of 2016," stated Mike Cola, CEO of Medgenics. "We have advanced NFC-1 (MDGN-001) into the clinic in mGluR+ ADHD with data expected in 2016, and we will soon initiate a trial in patients with 22q11.2 Deletion Syndrome. The announcement of our collaboration with Kyowa Hakko Kirin demonstrated the Company's ability to advance our growing pipeline of opportunities, and the successful fundraising we recently completed will further enable us to accelerate the development of these programs. We remain steadfast in our focus on developing innovative, genomically-based, best-in-class therapies focused on improving the lives of children and adults with rare and difficult-to-treat diseases."

Recent Milestones and Upcoming Events

• Initiated Phase 2/3 study of NFC-1 (MDGN-001) in mGluR+ ADHD: In June, the Company initiated enrollment in the SAGA (Study of Adolescent Glutamate Receptor Network Copy Number Variant ADHD) trial, a Phase 2/3 clinical trial to evaluate adolescent patients with mGluR mutation positive (mGluR+) attention deficit hyperactivity disorder (ADHD) to confirm the results from the previously completed Phase 1b GREAT study. Initial top-line data from the study are expected in the second half of this year.

• Announced the Second Clinical Development Program from our Collaboration with CHOP:In June, the Company entered into a collaboration with Kyowa Hakko Kirin Co., Ltd. (Kyowa Hakko Kirin) for the development and commercialization of Kyowa Hakko Kirin's first-in-class anti-LIGHT monoclonal antibody (MDGN-002). The Company plans to initiate a signal finding study this year, testing the drug in Severe Pediatric Onset Inflammatory Bowel Disease (IBD) in collaboration with Dr. Robert Baldassano, Director of the Center for Pediatric IBD at The Children's Hospital of Philadelphia (CHOP).

• Strengthened Balance Sheet: In June, Medgenics successfully completed a registered public offering, raising approximately $20 million in net proceeds. The proceeds will be used to fund development activities, including development of companion diagnostics for existing programs, license and research collaborations and for general corporate purposes which could include maintenance of intellectual property, and other business development activities including acquisitions or licensing of complementary products or businesses. The financing extends the Company's cash runway through at least Q1 2018.

• Anticipate initiation of Phase 1/2 study of NFC-1 (MDGN-001) in 22q11.2 Deletion Syndrome during Q3 2016: The Company will conduct a Phase 1/2 study of psychiatric symptoms in children with 22q11.2 Deletion Syndrome to explore symptoms from three major neuropsychiatric disorders: ADHD, Anxiety and Autism Spectrum Disorders (ASD). Enrollment is expected to begin shortly, pending final CHOP approval.

Second Quarter Financial Results

The Company reported financial results for the three and six months ended June 30, 2016 and the filing with the U.S. Securities and Exchange Commission (SEC) of the Company's Quarterly Report on Form 10-Q. The Form 10-Q includes unaudited interim consolidated financial statements containing the information presented below, as well as additional information regarding the Company. The Form 10-Q is available at www.sec.govand at www.medgenics.com.

Research and development expenses, both gross and net, for the three months ended June 30, 2016 were $8.74 million, increasing from $4.46 million gross and $3.03 million net for the same period in 2015 mainly due to increased sub-contractor costs to advance our clinical activities related to the NFC-1 (MDGN-001) program and the CHOP collaboration.

General and administrative expenses for the three months ended June 30, 2016 were $2.95 million, decreasing from $3.89 million for the same period in 2015 primarily due to a decrease in stock-based compensation expenses related to options granted to directors.

Financial expenses for the three months ended June 30, 2016 and 2015 were de minimis.

Financial income for the three months ended June 30, 2016 was nil, decreasing from $0.84 million in 2015. The $0.84 million financial income in 2015 was mainly due to a change in valuation of a warrant liability. All such warrants were exercised in 2015, thus eliminating the need for such valuation in 2016.

The Company reported cash and cash equivalents of $53.69 million as of June 30, 2016.

For the quarter ended June 30, 2016 the Company reported a loss of $11.7 million or $0.35 per share, compared with a loss of $6.09 million or $0.24 per share for the comparative quarter in 2015.

Six Months Financial Results

Research and development expenses, both gross and net, for the six months ended June 30, 2016 were $15.69 million, increasing from $8.36 million gross and $6.93 million net for the same period in 2015 mainly due to increased sub-contractor costs to advance our clinical activities related to the NFC-1 (MDGN-001) program and the CHOP collaboration.

General and administrative expenses for the six months ended June 30, 2016 were $7.14 million, decreasing from $7.84 million for the same period in 2015 primarily due to a decrease in stock-based compensation expenses related to options granted to directors offset in part by severance benefits recorded upon the termination of an officer of the Company.

Financial expenses for the six months ended June 30, 2016 were $0.02 million, decreasing from $0.26 million for the same period in 2015. The $0.26 million financial expense in 2015 was mainly due to the change in valuation of the warrant liability. All such warrants were exercised in 2015, thus eliminating the need for such valuation in 2016.

About Medgenics

Medgenics is dedicated to unlocking the potential of genomic medicine to identify and treat patients with life-altering conditions. Its efforts, including its internal research and development and ongoing sponsored research and licensing agreements with a well-respected pediatric academic medical center, give Medgenics the ability to focus on the underlying genetic pathway of pediatric diseases with the goal of finding therapeutic solutions for subpopulations of both children and adults living with rare and other difficult-to-treat diseases. Medgenics is also the developer of TARGT™ (Transduced Autologous Restorative Gene Therapy), a proprietary gene therapy platform.