Xenetic Biosciences, Inc. (NASDAQ: XBIO) Announces Agreement to Acquire Innovative CAR T Technology Platform - Innovative XCART platform with demonstrated proof of mechanism and preclinical evidence of target specificity

Biosciences, Inc. (NASDAQ: XBIO) Announces Agreement to Acquire Innovative CAR T Technology Platform

Innovative XCART platform with demonstrated proof of mechanism and preclinical evidence of target specificity positions Xenetic

to address high value oncology market with differentiated CAR T technology

XCART technology platform designed to target personalized, patient-specific tumor neoantigens

XCART expected to initially target B-cell lymphomas and has the potential to address multiple tumor types with an initial global

market opportunity in Non-Hodgkin Lymphoma of over $5 billion annually

MA - (March 4, 2019) - Xenetic Biosciences, Inc. (NASDAQ: XBIO) ("Xenetic"

or the "Company"), a clinical-stage biopharmaceutical company focused on the discovery, research and development of

next-generation biologic drugs and novel orphan oncology therapeutics, announced today its agreement to acquire the novel CAR T

("Chimeric Antigen Receptor T Cell") platform technology, called "XCART," a proximity-based screening platform

capable of identifying CAR constructs that can target patient-specific tumor neoantigens, with a demonstrated proof of mechanism

in B-cell Non-Hodgkin lymphomas. The XCART technology, developed by The Scripps Research Institute ("Scripps") in collaboration

with the Shemyakin-Ovchinnikov Institute of Bioorganic Chemistry, is believed to have the potential to significantly enhance the

safety and efficacy of cell therapy for B-cell lymphomas by generating patient- and tumor-specific CAR T cells. The acquisition

is subject to conditions typical for a transaction of this kind, including appropriate stockholder approvals, and is expected to

close in the first half of 2019.

"This acquisition is a transformative

step in the strategic evolution of Xenetic," commented Jeffrey Eisenberg, Chief Executive Officer of Xenetic. "With

this novel and differentiated CAR T technology, we are now positioned in a field that is at the forefront in the development of

new oncology therapeutics, which we believe will drive significant value for shareholders. The XCART platform was designed to

target personalized, patient-specific tumor neoantigens and has demonstrated promising preclinical data in an area of significant

unmet medical need. Our R&D efforts will focus initially on leveraging the XCART platform to develop cell-based therapeutics

for the treatment of B-cell Non-Hodgkin lymphomas, an initial global market opportunity estimated to exceed $5 billion per year1."

The XCART technology

platform was designed by its originators to utilize an established screening technique to identify peptide ligands that bind specifically

to the unique B-cell receptor ("BCR") on the surface of an individual patient's malignant tumor cells. The peptide

is then inserted into the antigen-binding domain of a CAR, and a subsequent transduction/transfection process is used to engineer

the patient's T cells into a CAR T format which redirects the patient's T cells to attack the tumor. Essentially, the

XCART screening platform is the inverse of a typical CAR T screening protocol wherein libraries of highly specific antibody domains

are screened against a given target. In the case of XCART screening, the target is itself an antibody domain, and hence highly

specific by its nature. The XCART technology creates the possibility of personalized treatment of lymphomas utilizing a CAR with

an antigen-binding domain that should only recognize, and only be recognized by, the unique BCR of a particular patient's

Market Reports World GLOBAL NON-HODGKIN LYMPHOMA THERAPEUTICS MARKET - SEGMENTED BY TYPE OF TREATMENT - GROWTH, TRENDS

AND FORECASTS (2018 - 2023); BioPharm Insight Surveillance, Epidemiology, and End Results (SEER) 9 registries, National Cancer

Matthew John Frigault, M.D., a member of Xenetic's Scientific Advisory Board and medical oncologist in the Hematologic Malignancy

Program at the Massachusetts General Hospital Cancer Center, Assistant Director of the Cellular Therapy Service, and Instructor

at Harvard Medical School commented, "Adoptive cell therapy, and CAR T in particular, has been an area of great interest

in recent years, and an area that I have built my career around. There are a number of CAR T products in development and the existing

therapies can be highly efficacious, but not all patients respond, and the side effects can be frequent and serious, even life

for XCART is limited off-tumor toxicities, such as B-cell aplasia. Xenetic's clinical development program will seek to confirm

the early preclinical results, and to demonstrate a more attractive safety profile than existing therapies.

of the transaction, Xenetic will acquire all outstanding shares of Hesperix S.A., a newly-formed Swiss entity to which all XCART

owners and inventors other than Scripps have assigned their rights to XCART, and will exclusively license Scripps' rights

in the technology, in exchange for an aggregate 7,500,000 shares of Xenetic common stock.

Xenetic Biosciences,

Inc. is a clinical-stage biopharmaceutical company focused on the discovery, research and development of next-generation biologic

drugs and novel orphan oncology therapeutics. The Company recently announced its plans to acquire the XCART platform, a novel CAR

T technology engineered to target personalized, patient-specific tumor neoantigens. The transaction is expected to close in the

first half of 2019, and the Company plans to initially apply the XCART technology to develop cell-based therapeutics for the treatment

of B-cell lymphomas.

2 oncology asset, XBIO-101 (sodium cridanimod), is a small-molecule investigational immunomodulator and interferon inducer which,

in exploratory clinical studies, has also been shown to increase progesterone receptor (PrR) and estrogen receptor (ER) expression

in certain tumor tissues. The Company plans to pursue collaborations with immuno-oncology (I-O) companies in which it would seek

to use XBIO-101 in combination with approved or developmental I-O compounds such as checkpoint inhibitors. Additionally, Xenetic's

proprietary drug development platform, PolyXen , enables next-generation biologic drugs by improving their half-life and

other pharmacological properties. The Company has ongoing business development activities to explore partnerships utilizing its

PolyXen delivery platform.

For more information, please visit the company's website at www.xeneticbio.com

and connect on Twitter, LinkedIn, and Facebook.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

In connection with the acquisition, the Company will file with the Securities and Exchange Commission (the "SEC"),

a registration statement on Form S-4 that will include a combined proxy statement/prospectus. This communication is not a substitute

for any proxy statement, registration statement, proxy statement/prospectus or other documents the Company may file with the SEC

in connection with the acquisition. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THESE DOCUMENTS

WHEN THEY BECOME AVAILABLE, ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, AND OTHER DOCUMENTS FILED BY THE COMPANY WITH THE

SEC IN CONNECTION WITH THE ACQUISITION, BECAUSE THESE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders

will be able to obtain free copies of these materials and other documents filed with the SEC by the Company through the website

maintained by the SEC at www.sec.gov. Investors and security holders will also be able to obtain free copies of the documents

filed by the Company with the SEC by directing a written request to Xenetic Biosciences, Inc., 40 Speen Street, Suite 102, Framingham,

MA 01701 or by calling 781-778-7720.

PARTICIPANTS IN THE SOLICITATION

This communication is not a solicitation of a proxy from any investor or security holder. The Company, its respective directors,

executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies

from shareholders of the Company in connection with the acquisition. Information regarding the persons who may, under the rules

of the SEC, be deemed participants in the solicitation of proxies in connection with the acquisition, including a description of

their direct or indirect interests, by security holdings or otherwise, will be set forth in the relevant materials when filed with

the SEC. Information regarding the directors and executive officers of the Company is contained in its proxy statement for its

2018 annual meeting of stockholders, filed with the SEC on November 13, 2018, its Annual Report on Form 10-K for the year ended

December 31, 2017, which was filed with the SEC on March 30, 2018, its Quarterly Reports on Form 10-Q for the quarters ended March

31, 2018, June 30, 2018, and September 30, 2018 which were filed with the SEC on May 15, 2018, August 10, 2018, and November 9,

2018, respectively, and certain of its Current Reports filed on Form 8-K. These documents can be obtained free of charge from the

sources indicated above.

This press release contains forward-looking

statements for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements contained

in this press release other than statements of historical facts may constitute forward-looking statements within the meaning of

the federal securities laws. These statements can be identified by words such as "expects," "plans," "projects,"

"will," "may," "anticipates," "believes," "should," "intends," "estimates,"

and other words of similar meaning. Any forward-looking statements contained herein are based on current expectations, and are

subject to a number of risks and uncertainties. These forward-looking statements include, but are not limited to, statements regarding

the acquisition and development of the CAR T technology. Many factors could cause our actual activities or results to differ materially

from the activities and results anticipated in forward-looking statements. Important factors that could cause actual results to

differ materially from such plans, estimates or expectations include, among others, (1) that one or more closing conditions to

the acquisition, including certain regulatory approvals, may not be satisfied or waived, on a timely basis or otherwise, or that

the required approval by the stockholders of the Company may not be obtained; (2) the condition that the Company have adequate

financing to fund its future working capital obligations may not be met; (3) the risk that the acquisition may not be completed

on the terms or in the time frame expected by the Company, or at all; (4) unexpected costs, charges or expenses resulting from

the acquisition; (5) uncertainty of the expected financial performance of the Company following completion of the acquisition;

(6) failure to realize the anticipated benefits of the acquisition; (7) the ability of the Company to implement its business strategy;

(8) the occurrence of any event that could give rise to termination of the acquisition; and (9) other risk factors as detailed

from time to time in the Company's reports filed with the SEC, including its annual report on Form 10-K, periodic quarterly