Phase 2 Discovery Receives Orphan Drug Designation from FDA for Synthetic Melatonin Analog PD-6735

Business Wire, May 26, 2004

Business Editors/Health/Medical Writers

CINCINNATI--(BUSINESS WIRE)--May 26, 2004

Phase 2 Discovery (www.phase2d.com) announced today that the U.S. Food and Drug Administration (FDA) has granted orphan drug designation to PD-6735, a proprietary melatonin analog, for the treatment of circadian sleep disorders in totally blind individuals.

Totally blind individuals are unable to differentiate day from night. As a result, their sleep/wake cycles are not synchronized with the day/night cycles most individuals follow. This results in a reduced quality of life for the affected individuals, as well as their caregivers. Melatonin analogs taken consistently at an appropriate time of day are known to help re-synchronize sleep/wake cycles.

"We believe the strength of PD-6735 resides in its ability to promote both circadian re-entrainment and sleep induction," said Frank Zemlan, Ph.D., CEO of Phase 2 Discovery. "Studies to date indicate that PD-6735 is effective in both disorders when used at doses up to 100 mg. Additionally, PD-6735 displayed an excellent safety profile at these doses. The FDA's orphan drug designation further strengthens our program for PD-6735 by offering important clinical development and commercial benefits."

The Orphan Drug Act is intended to encourage companies to develop therapies for the treatment of diseases that affect fewer than 200,000 individuals in the U.S. Orphan drug designation, granted by the FDA's Office of Orphan Products Development, provides Phase 2 Discovery with a number of potential benefits for PD-6735. Orphan drug designation results in seven years of market exclusivity in the U.S. upon FDA product approval.

For more information, contact Dr. Jeff Mulchahey, Vice President of Clinical Affairs, at (513) 475-6618, or via e-mail at jmulchahey@phase2d.com.

About PD-6735

PD-6735 is a proprietary melatonin analog, 6-chloro-(beta)-methyl melatonin. It is a high affinity agonist at melatonin-1 and melatonin-2 receptors, with high selectivity for these over non-melatonin receptors. PD-6735 is being developed as a treatment for sleep and circadian rhythm disorders. It has a mode of action different from that of benzodiazepine receptor ligands presently on the market or nearing launch. The compound's novel mode of action is expected to yield minimal side effects and risk of abuse, which may provide a competitive advantage in the marketplace.

About Phase 2 Discovery

Phase 2 Discovery (P2D) utilizes its clinical expertise in psychiatry and neurology to develop prescription pharmaceuticals, fulfilling unmet patient needs in these disciplines. P2D's business model is to acquire promising compounds for psychiatric and neurologic indications at an early stage of their development. P2D performs the appropriate preclinical studies, Phase 1, Phase 2 and initial Phase 3 clinical trials as necessary in order to establish proof of concept and clinical efficacy. During Phase 3, P2D partners with a major pharmaceutical company for subsequent Phase 3 development and commercialization. P2D currently has multiple compounds in preclinical and clinical development. P2D is a privately held company located in Cincinnati. Additional information about P2D is available at: www.phase2d.com .