Bringing antibacterial drug advances to the community

Our business is focused on the development of antibiotics that can be utilized to successfully treat community-acquired bacterial infections. Our lead candidate, Amoxicillin PULSYS,is based on a drug that continues to play a critical role in the treatment of several upper respiratory tract infections and is the number-one prescribed type of antibiotic in the United States. Our Keflex brand of cephalexin is the flagship brand of that antibiotic, the third most prescribed antibiotic in the United States, and the number-one prescribed antibiotic for treatment of uncomplicated skin infections. We believe our efforts to develop PULSYS versions of these off-patent compounds could result in their utility as front-line antibiotics continuing for another generation as our patented technology addresses a fundamental weakness both drugs share: inconvenience. Inconvenience can lead to missed doses, which may result in treatment failures and the development of antibiotic resistance. We believe addressing inconvenience could markedly improve these drugs? utility going forward by leading to better compliance and more successful treatment outcomes.

We intend to build over time a pharmaceutical company which may include discovery, development, manufacturing, distribution, sales, and marketing capabilities. We believe that this commercialization strategy will allow us to fully maximize the value of our PULSYS product assets and retain significant control over our development and commercial activities. We acquired Keflex in 2004 to establish our commercial infrastructure. We continued to build our commercial infrastructure and capabilities for selling, marketing and distributing the Keflex brand of cephalexin by expanding our Keflex line of antibiotic products through the addition of a . These efforts with Keflex have enabled us to take important steps toward developing our in-house commercial capabilities which have the potential to be expanded with the possible launch of our Amoxicillin PULSYS products.

We believe that a significant proportion of prescriptions for first-line, broad-spectrum antibiotics is written by a relatively small number of high-volume prescribers who can be reached by a community-based sales force. Over time, we intend to expand our sales and marketing capabilities to provide even greater support of our target audiences. We deployed a community-based contract sales force in 2006 detailing physicians, including family practitioners and internists in support of the Keflex750mg strength. We also may enter into agreements with other pharmaceutical companies to exploit our partners? sales and marketing capabilities in order to optimally market our products.