Altus Pharmaceuticals Plans to Initiate ALTU-135 Phase III Trial in the Second Quarter of 2007.

Consistent Production And Processes Established To Support ALTU-135 Phase III Clinical Trial 

Essential ALTU-238 Equipment Fabrication Expected To Be Completed In December

CAMBRIDGE, Mass. -- Altus Pharmaceuticals Inc. (NASDAQ: ALTU), a biopharmaceutical company focused on oral and injectable protein therapeutics for patients with gastrointestinal and metabolic disorders, announced today that the Company plans to initiate a Phase III clinical trial of ALTU-135 in Cystic Fibrosis patients with pancreatic insufficiency in the second quarter of 2007.

"I am pleased that we have now established and demonstrated consistent production and processes to support our Phase III trial of ALTU-135. Our goal is to initiate this trial in the second quarter of 2007," stated Sheldon Berkle, President and CEO of Altus Pharmaceuticals.

ALTU-135, the Company's orally administered enzyme replacement therapy for patients with pancreatic insufficiency, is manufactured by blending three drug substance enzymes: lipase, protease and amylase. This consistent and pure enzyme combination is designed to improve fat, protein and carbohydrate absorption in pancreatic insufficient individuals.

In July of this year, the Company announced that one of three blended ALTU-135 lots showed an unexpected reduction in lipase activity. During the past three months, Altus initiated an investigation and conducted additional manufacturing development work to support its intended Phase III clinical trial. Work carried out during the investigation established that the observed lower potency was due to characteristics of the assay used to measure activity and not a result of a loss of enzyme activity. This assay, which is the standard for measuring lipase activity, is specified for porcine material and has been in existence for more than 50 years. Altus' proprietary technology produces a consistent and pure enzyme combination unrelated to porcine material. As a result of the investigation, Altus modified the assay to enable it to more accurately determine lipase activity for its cross-linked, microbially-derived lipase. Since August, the Company has produced, blended and tested additional lots to confirm that the manufacturing process for material to be used in the Phase III trial results in a consistent product that is intended to be representative of the commercial material.

Berkle continued, "As a result of our additional ALTU-135 process testing and investigations, we have increased our manufacturing and technical operations core competencies. In fact, we believe we have strengthened the overall ALTU-135 program through a greater understanding of activity measurements, process controls, drug blending and the effects of cross-linking on enzyme activity, stability and solubility. During the next few months we plan to finalize with regulators, investigational review boards and investigators the remaining few components that we expect will enable us to initiate the ALTU-135 Phase III clinical trial in the second quarter of next year."

Update on ALTU-238

ALTU-238 is a once-per-week formulation of human growth hormone that employs Altus' proprietary protein crystallization and formulation technology. ALTU-238 is designed to require fewer injections without the use of polymer encapsulation, chemical modification or fusion proteins, which the Company believes to be a significant advantage over other long-acting therapies in development.

In July of this year, the Company announced that delivery of certain production equipment for ALTU-238 was delayed. During the past several months, Altus continued to develop and qualify additional assays of ALTU-238 to ensure process reproducibility and product consistency. The completion of the equipment fabrication is expected to occur in December of this year. During the first several months of 2007, the equipment and the manufacturing processes will be qualified at Altus' contract manufacturer.

"We are very pleased to see the ALTU-238 program back on track," continued Berkle. "The equipment that was delayed was an essential component to the production of our ALTU-238 product. In fact, this equipment was developed and built exclusively for our unique crystallization technology. Following the qualification of this new equipment and processes, we will provide future guidance as to the anticipated ALTU-238 clinical program timeline."

Berkle concluded, "2007 is shaping up to be a very important and exciting year for Altus. I am very proud of the Altus team for its ability to take on the challenges of both development programs and deliver the needed solutions."

About Altus Pharmaceuticals Inc.

Altus Pharmaceuticals is a biopharmaceutical company focused on the development and commercialization of oral and injectable protein therapeutics for patients with gastrointestinal and metabolic disorders. The company has headquarters in Cambridge, Massachusetts, and is listed on the NASDAQ Stock Exchange under the symbol ALTU. For additional information about the company, please visit www.altus.com.

Safe Harbor Statement

Certain statements in this news release concerning Altus' business are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, those relating to the timing for completion of equipment fabrication and qualification of manufacturing processes for ALTU-238, and the timing for planned initiation of Phase III clinical trials for ALTU-135. Any or all of the forward-looking statements in this press release may turn out to be wrong. They can be affected by inaccurate assumptions Altus might make or by known or unknown risks and uncertainties, including, but not limited to uncertainties as to the future success of ongoing and planned clinical trials; and the unproven safety and efficacy of products under development. Consequently, no forward-looking statement can be guaranteed, and actual results may vary materially. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in Altus' reports to the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2005. However, Altus undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise.