Enterologics Is Acquiring BioBalance Corp. and Probiotic Product from New York Health Care, Inc.

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Enterologics Will Establish Clinical Development Program for E. coli M17 (Probactrix®)

Enterologics, Inc. (ELGO.OB) announced today that it is acquiring all the shares of The BioBalance Corporation and its subsidiary BioBalance LLC from New York Health Care, Inc. (“NYHC”). With this purchase Enterologics will acquire E. coli M17, or Probactrix®, a probiotic product being developed as a biologic drug under an active Investigational New Drug (IND) application for a pouchitis-related indication. Probiotics are live microorganisms (in most cases, bacteria) that are similar to or derived from beneficial microorganisms found in the human gut. They are also called "friendly bacteria" or "good bacteria."

The acquisition also includes BioBalance’s portfolio of intellectual property and regulatory filings. Terms of the acquisition include cash, stock and a 3-year promissory note. The sale is contingent upon receiving approval by NYHC’s shareholders, with an expected closing date of no later than September 30, 2011.

“By providing us with our first pipeline product, E. coli M17, the acquisition of BioBalance fulfills a key milestone in Enterologics’ business strategy,” said Bob Hoerr, Enterologics’ president. “E. coli M17 coupled with the new formulation technology we are developing with Universal Stabilization Technologies provides us with a solid platform for our first probiotic biologic drug product. The fact that BioBalance was able to establish an active IND for E. coli M17 made it very attractive for acquisition. This further demonstrates the validity of our planned commercialization of high value probiotics as biologic drugs for specific gastrointestinal (GI) conditions.”

Dr. Hoerr stated that the formal development of E. coli M17 could begin quickly once the deal closes. He continued that the Company plans to reinitiate manufacturing with a partner as soon as feasible after closing. When cGMP production and the necessary financing are in place, the Company intends to begin clinical trials under the IND.

“The sale of BioBalance will enable New York Health Care to concentrate on its core business,” said Murry Englard, CEO of NYHC. “We are also very pleased that Enterologics is committed to developing E. coli M17 as a therapeutic agent. We made significant progress on this course until the economic downturn made obtaining the required financing impossible. As a focused GI therapeutic company, Enterologics is ideally suited to be successful.”
About Enterologics

Enterologics, Inc. (OTCBB: ELGO.OB) is a biotechnology company that is developing probiotics as biologic drugs for specific gastrointestinal disease indications. Probiotics are live microorganisms, in most cases, bacteria, that are similar to or derived from beneficial microorganisms that are found in the human gut (e.g. for more information see Introduction to Probiotics). They are also called "friendly bacteria" or "good bacteria." Enterologics intends to identify, in-license and develop unique probiotic strains for specific medical conditions, obtain regulatory approval and market these probiotics products as FDA-approved prescription drugs for specific label indications. More details are available at http://www.enterologics.com.

Contact Information
For further information, contact [email protected] or visit http://www.enterologics.com.

Key Words: probiotics, biologics, biotechnology, gastrointestinal diseases

Forward-Looking Statement
Matters discussed in this release may constitute forward-looking statements. The U.S. Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation.

Forward-looking statements reflect our current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The words "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "expect" and similar expressions identify forward-looking statements.

The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, the consummation of the acquisition described above, the ability to obtain regulatory approval and market its products, availability of capital, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that it will achieve or accomplish these expectations, beliefs or projections.

Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include our ability to identify and in-license and the ability to adequately fund such targeted acquisitions. Risks and uncertainties are further described in reports filed by Enterologics, Inc with the U.S. Securities and Exchange Commission.


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Beth Seidman
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