RegeneRx Announces Letter to Stockholders Posted on Website

RegeneRx Biopharmaceuticals, Inc. (NYSE Amex:RGN) ("the Company” or "RegeneRx”) today announced that the following letter to stockholders will be posted today to the investor relations section of the Company’s web site at www.regenerx.com:

To Our Stockholders,

As we enter the final quarter of 2010, we would like to review our Company’s recent progress while providing a blueprint for the coming months. We are proud of the tremendous strides made by RegeneRx Biopharmaceuticals in advancing the development of Thymosin beta 4 (Tß4) in a number of clinical applications.

Tß4 is a novel therapeutic peptide for tissue and organ protection, repair and regeneration. RegeneRx is developing a synthetic copy of this conserved molecule for pharmaceutical use. In preclinical studies Tß4 was shown to promote progenitor cell differentiation and migration in the heart and central nervous system, promote angiogenesis in cardiac and dermal tissues, increase keratinocyte migration and collagen deposition and decrease inflammation by down-regulating inflammatory cytokines.

Each of our three products in clinical development – RGN-352, RGN-259 and RGN-137 – is a unique formulation of Tß4.

RGN-352

RGN-352 is an injectable formulation of Tß4 to treat cardiovascular and central nervous system diseases, as well as other medical conditions. Based on a large body of preclinical efficacy data, we initially are targeting RGN-352 for the treatment of acute myocardial infarction (AMI), or heart attack. We recently completed a Phase 1 trial, which showed RGN-352 to be safe and well-tolerated. Planning for the Phase 2 trial began in the second quarter of this year, a contract research organization (CRO) has been retained to manage the trial and the clinical protocol is expected to be submitted to the U.S. Food and Drug Administration (FDA) shortly. We anticipate enrolling the first of 100 patients during the first quarter of 2011 at approximately 25 clinical sites in the U.S., Israel and Russia with the goal of completing enrollment in the trial by the end of 2011. We will also have an interim evaluation at the midpoint of the trial. We recently received a $3 million, three-year development grant from the National Institutes of Health (NIH) to support our AMI program.

In addition, recent preclinical data suggest that RGN-352 may benefit patients with multiple sclerosis (MS) by remyelinating the damaged myelin nerve sheaths that wrap around and protect the nerve’s axons, as well as reducing inflammation associated with the disease. We are supporting a Phase 1/2 physician-sponsored clinical trial in MS patients that is expected to begin in 2011. Preclinical work has also suggested that RGN-352 may be of use in treating stroke and traumatic brain injury.

RGN-352 is intended to address large and growing markets. For example, based on our independent research and market analysis, we believe that the peak market value for RGN-352 in the AMI indication is between $800 million and $900 million, given a U.S. population of 650,000 treatable patients annually.

RGN-259

RGN-259 is a sterile, preservative-free topical eye drop formulation of Tß4 for ophthalmic indications. Based on recent human clinical data, we are supporting a physician-sponsored Phase 2 trial in dry eye associated with graft versus host disease (GvHD). Dry eye is a common complication of GvHD and significantly affects quality of life. Patients experience chronic conjunctivitis, blurry vision, foreign body sensation, burning or dry sensation and severe light sensitivity, and may ultimately experience corneal erosion and blindness. The treating physicians have received FDA and institutional review board (IRB) approval to begin this 20-patient study and the first patients are expected to be enrolled this quarter, with the trial to be completed by the end of 2011.

We have publicly reported results from previous human studies and recently submitted a report to the FDA. Under compassionate use INDs, seven patients with non-healing corneal ulcers were treated with RGN-259, five of whom had complete healing and two of whom had substantial healing of their ulcers. Treatment of three additional patients with corneal defects called punctate keratitis showed no evidence of healing, although they did report a reduction in eye inflammation and increased comfort. We believe that these observations are encouraging and support the commercial use of RGN-259 in an array of dry-eye indications.

Although the market for RGN-259 in dry eye associated with GvHD is limited, we believe that the small number of patients with this form of the disease would qualify it as an orphan drug. Orphan drugs often have a faster path to commercialization, orphan products are entitled to seven years of market exclusivity in the U.S. and 10 years in the E.U. and companies developing such products are eligible to receive tax benefits and other incentives, all of which make commercial development a compelling proposition. We also believe that if the ongoing Phase 2 trial generates positive patient outcomes, we and/or a partner would have a strong rationale to develop RGN-259 in other dry eye indications that offer much larger commercial potential. Further to that goal, we have commissioned additional non-clinical dry eye efficacy studies to support this effort, which are commonly used to evaluate potential products.

RGN-137

We are evaluating RGN-137, a topical gel formulation of Tß4, in a Phase 2 trial for the treatment of epidermolysis bullosa (EB). EB is an inherited group of skin conditions whose hallmark is blistering and dermal sloughing in response to minor injury, heat, or friction from rubbing or scratching. Depending on disease severity, EB may be debilitating and ultimately fatal. We have received orphan drug designation from the FDA for RGN-137 for the treatment of EB. We estimate the prevalence of EB in the U.S. to be between 20,000 and 30,000 patients, with only approximately 5,000 patients eligible for inclusion in our Phase 2 clinical trial. As a result, recruiting patients into the trial has been slow. We need six more patients to complete the trial and are bringing in patients from the U.K. to help complete enrollment. However, because EB can be so debilitating and patient numbers so small, in the event that the Phase 2 trial shows robust efficacy, we have scheduled a meeting with the FDA to ask the agency to consider converting the trial to a pivotal trial, which could allow us to file for regulatory approval of RGN-137 without the need for additional clinical trials. RegeneRx previously received $675,000 in grants from the FDA Office of Orphan Products to support this trial.

Based on other non-clinical data and observations from patients whose wounds were treated with RGN-137, we are evaluating additional potential clinical applications for RGN-137, including the reduction of scar tissue resulting from surgery, trauma or disease. In that regard, we intend to submit an application for a Small Business Innovation Research grant to the NIH to fund additional research.

Research & Development, Intellectual Property

RegeneRx currently has more than 20 active research collaborations under Material Transfer Agreements. These collaborations generate data that provide the basis for our clinical programs and are an effective way to leverage our available resources for important research and development projects. Our collaborators include 16 U.S. universities, medical schools and hospitals; four European universities, research centers and hospitals; the U.S. military, the NIH, a pharmaceutical company, a cosmetics company and a Canadian university. The collaborations have multiple areas of clinical focus, including neurology and stroke, cardiovascular and cardiac repair, ophthalmology, dermatology, pulmonology, tropical diseases, thrombosis and cosmeceuticals.

We have 75 issued patents and 261 patent applications submitted throughout the world. These patents and applications are critical for protection of our intellectual property and necessary for future strategic partnerships. We have also submitted patents in countries such as China and India where we believe our products may be marketed in the future.

The Coming Months

We are excited about the potential to improve the lives of patients while creating value for our stockholders, and we face multiple milestones in the coming months. As you know, in July we submitted an application for a federal grant of up to $5 million under the Patient Protection and Affordable Care Act, a $1 billion program for small biotechnology companies with less than 250 employees. Awards are expected to be announced by October 31^st and would provide an excellent source of non-dilutive financing. It is not known how many applicants have applied for such grants, which means it is uncertain how much, if any, capital each company will receive under the program.

Also, as we have previously indicated, we are in various stages of discussion with several potential pharmaceutical partners for a number of clinical indications. Each negotiation is unique with different objectives required to obtain mutually satisfactory terms. We realize the value of a pharmaceutical strategic partner and will continue to work diligently to reach a successful conclusion.

With respect to our listing on the NYSE Amex, (the Exchange) as you know we have been operating under a plan of compliance intended to meet certain of the Exchange’s continued listing standards by October 25, 2010. We believe that we may not have achieved sufficient progress against our compliance plan as of this date and, therefore, expect that we will receive notification from the Exchange. If we receive such notice, we intend to request a hearing with the Exchange. Until the hearing, our stock will continue to be traded on the NYSE Amex. In the event we are not able to maintain our continued listing, we expect our stock would be traded on an "over the counter” market such as the OTC Bulletin Board or the OTCQB market.

We look forward to keeping you apprised of our progress.

Forward-Looking Statements

Any statements in this press release that are not historical facts are forward-looking statements made under the provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are urged to consider statements that include the words "project,” "believe,” "anticipate,” "plan,” "expect,” "estimate,” "intend,” "should,” "would,” "could,” "will,” ”may,” "potential” or the negative of those words or other similar expressions words to be uncertain and forward-looking. Factors that may cause actual results to differ materially from any future results expressed or implied by any forward-looking statements include the risks and uncertainties inherent in our business, including, without limitation the risk that our product candidates do not demonstrate safety and/or efficacy in future clinical trials; risks related to our ability to obtain financing to support our operations on commercially reasonable terms; the progress, timing or success of our clinical trials; difficulties or delays in development, testing, obtaining regulatory approval for producing and marketing our product candidates; regulatory developments; the size and growth potential of the markets for our product candidates and our ability to serve those markets; the scope and validity of patent protection for our product candidates; competition from other pharmaceutical or biotechnology companies; and other risks described in the Company’s filings with the Securities and Exchange Commission ("SEC”), including those identified in the "Risk Factors” sections of the annual report on Form 10-K for the year ended December 31, 2009, and the quarterly report on Form 10-Q for the quarter ended June 30, 2010, as well as other filings it makes with the SEC. Any forward-looking statements in this press release represent the Company’s views only as of the date of this release and should not be relied upon as representing its views as of any subsequent date. The Company anticipates that subsequent events and developments may cause its views to change, and the Company specifically disclaims any obligation to update this information, as a result of future events or otherwise, except as required by applicable law.