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Neuro Discovery Closes $18.5 Million Allon Acquisition

Vancouver, BC, October 1, 2004--Neuro Discovery Inc. (TSX Venture: "NDI") announced today that it has closed the acquisition of Allon Therapeutics, Inc. for $10.5-millon in equity, as well as converting $8-million in special warrants held in escrow bringing the total deal to $18.5-millon.

Following TSX-V approval, the new company named Allon Therapeutics Inc. will resume trading under the symbol "NPC" (Neuro Protection Company).

"Allon will be a major new player on the biotech scene with the combination of tremendous technology, significant investor support, and strong management", said Gordon McCauley, President of the resulting company. "This is one of the largest biotech financings in BC and Canada this year, we're flattered by the market support and look forward to earning a reputation for delivering on the clinical development of this technology" McCauley added. Post-transaction, Allon has almost $11-million in cash available for commercial development of its product portfolio.

The new Allon is the latest venture of BC biotech pioneer Dr. Jim Miller, founding CEO of both QLT Inc., and Inex Pharmaceuticals Corp. and Allon's Executive Chairman. "Allon's lead drug candidate has all the elements for commercial development in a variety of significant markets of unmet medical need" said Miller, "and the scientific team starting with founder Dr. Illana Gozes is one of the best I've seen in 25 years."

Dr. Gozes founded Allon based on work that she did in collaboration with Dr. Douglas Brenneman at the National Institutes of Health in the United States and at her laboratory at Tel Aviv University.

Allon, a private Delaware registered San Diego-based company, has relocated to Vancouver. Allon is developing technology that has demonstrated potent neuroprotective capabilities in pre-clinical studies in a wide range of chronic and acute neurodegenerative diseases and conditions including Alzheimer's, multiple sclerosis, stroke, and traumatic brain injury. Allon expects to file an investigational new drug (IND) application with the United States Food and Drug Administration (FDA) for its lead compound, AL-108, in Q4 of this year and commence clinical trials early next year.

NDI shareholders voted 100% in favour of the proposed acquisition first announced on June 21st and for which Neuro Discovery raised $8-million through the sale of special warrants as announced August 12th. The special warrants were priced at $1.00 and consisted of one share and one half share purchase warrant priced at $1.25 exercisable for 18 months.

Under the terms of the Securities Exchange Agreement, NDI issued 9,503,457 shares to acquire all of the outstanding securities in Allon. At closing, NDI also assumed the administration of Allon's stock option plan and reserved a total of 1,097,250 shares for issuance upon the exercise of the Allon options outstanding under that plan at closing. The companies' audited, unaudited and pro forma financial statements are included in an Information Circular dated August 25, 2004 and SEDAR filed.

NDI invested in Allon in 2003 through its affiliate, Neuro Discovery Limited Partnership (NDLP). The NDLP will own approximately 21% of the public company's shares post closing and after giving effect to the deemed exercise of special warrants. Two representatives of NDLP and NDI, Dr. Miller and Dr. Anthony Phillips, are Directors of Allon.

Shareholders also endorsed selling the investment management subsidiaries of NDI to a privately held company controlled by Drs. Miller and Phillips and this sale has closed as well. This resolution, as well as those approving the acquisition, and adoption of a new stock option plan, was approved by a majority of disinterested shareholders. The shareholders also approved the deemed exercise of the special warrants on closing of the acquisition.

Completion of this transaction is subject to final Exchange approval, conditional approval has been received.

Desjardins Securities Inc. was paid a cash fee to act as Sponsor for this transaction and conducted satisfactory due diligence. An agreement to sponsor should not be construed as any assurance with respect to the merits of the transaction or the likelihood of completion.

In addition to NDI and NDLP, the Allon shareholders are:

Richard P. Burgoon, Jr. of San Diego, CA , Ephraim Gildor of Greenwich, CT, Professor Illana Gozes of Ramat, Israel, Dr. Avron D. Spier of San Diego, CA and RAMOT at Tel Aviv University Ltd. of Tel Aviv, Israel, an Israeli company that is the technology transfer agency of, and controlled by, Tel Aviv University.

In addition to NDLP, the Principals of the resulting issuer are the following Management and Directors: Dr. James J. Miller, Chairman, (Dr. Miller was founding CEO of both QLT Inc., and Inex Pharmaceticals Corp.), Professor Illana Gozes, Chief Scientific Officer, (Dr. Gozes is the founder of the company), Mr. Gordon McCauley, President, (Mr. McCauley is a biotechnology and health care executive with both investment and operating experience), and Mr. Matthew Carlyle, CFA, Director of Finance and Operations, (Mr. Carlyle is an experienced technology financial executive). In addition to Drs. Miller and Gozes, the Board will include Dr. Anthony G. Phillips (a co-founder of QLT Inc., Inex, and Neuro Discovery), C. Michael O'Brian (a successful investor in and advisor to numerous companies), Isaac Kohlberg, (CEO of RAMOT), and Frank Holler, (Former CEO of ID Biomedical and Xenon Pharmaceuticals).

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor reviewed the contents of this press release.

For further information: Gordon C. McCauley, President, Allon Therapeutics Inc., P: (604) 736-0634, C: (604) 218-4742, E: gmccauley@allontherapeutics.com

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