Altus Pharmaceuticals Reports Third Quarter 2007 Financial Results.

CAMBRIDGE, Mass. -- Altus Pharmaceuticals Inc. (NASDAQ: ALTU), a biopharmaceutical company focused on oral and injectable protein therapeutics for gastrointestinal and metabolic disorders, today reported financial results for the quarter ended September 30, 2007.

For the third quarter of 2007, the Company reported a net loss attributable to common stockholders of $22.6 million, or $0.73 per share, compared to a net loss attributable to common stockholders of $16.0 million, or $0.71 per share, in the third quarter of 2006. Cash, cash equivalents and marketable securities at September 30, 2007 totaled $152.2 million.

In the third quarter of 2007, the Company reported negative revenue of $0.6 million compared to negative revenue of $2.0 million in the third quarter of 2006. The Company's third quarter revenue in 2007 and 2006 was impacted by an increase in the total estimated development program costs related to Trizytek(TM) [porcine free enzymes] (formerly ALTU-135). With respect to Trizytek, the Company recognizes revenue earned under collaboration agreements using the proportional performance method of revenue recognition. During the three months ended September 30, 2007, the Company reviewed the planned development program for Trizytek and increased the total estimated development costs from $137.5 million to $157.5 million. The impact of the increase in total estimated development costs, under the proportional performance method of revenue recognition, resulted in a cumulative negative revenue adjustment through September 30, 2007 of $2.0 million, which resulted in the Company reporting net negative revenue of $0.6 million in the third quarter of 2007.

Research and development expenses totaled $18.7 million in the third quarter of 2007 compared to $10.9 million in the third quarter of 2006. Third quarter 2007 R&D spending reflects continued clinical and manufacturing costs associated with Trizytek, investments in ALTU-238 clinical manufacturing capacity, outsourced third-party and internal costs related to the ALTU-237 Phase I clinical trial and development spending on Altus' early stage pre-clinical projects. General, sales and administrative expenses were $4.4 million in the third quarter of 2007 compared to $4.2 million in the third quarter of 2006. The third quarter 2007 general, sales and administrative expenses primarily consisted of salaries and other related costs for personnel, including stock-based compensation expenses, legal, consulting and professional service fees to support the requirements of being a public company.

2007 Financial Guidance

Based on current operating plans and the expected timing of product development programs, Altus reiterates its previous guidance that net cash used in operating activities will be between $45 million and $55 million in 2007.

"The Altus team is focused on advancing the Company and its lead programs," stated Sheldon Berkle, President and Chief Executive Officer of Altus Pharmaceuticals. "By utilizing Altus' crystallization technology, we have created three clinical development programs that range from Phase I to Phase III trials and we have two pre-clinical programs. In addition, our research team has crystallized more than 70 proteins, which could further strengthen our robust pipeline or provide new strategic opportunities for the Company."

During the second quarter of 2007, the Company announced the start of its Phase III clinical trials to evaluate the efficacy and safety of Trizytek, an oral enzyme replacement therapy for cystic fibrosis patients with pancreatic insufficiency. Altus' consistent and pure enzyme combination, Trizytek, is designed to improve fat, protein and carbohydrate absorption in pancreatic insufficient individuals. The DIGEST trials (Determining the efficacy and safety of an Innovative GastrointESTinal enzyme complex) consist of a Phase III Trizytek efficacy trial and a Phase III Trizytek safety trial.

Altus plans to recruit approximately 300 patients from more than 50 sites worldwide for the two trials, making this Phase III program the largest ever conducted to evaluate the efficacy and safety of pancreatic enzyme replacement therapy in cystic fibrosis patients. The DIGEST efficacy trial, which is testing a one capsule per meal dosing regimen, is studying the fat absorption in cystic fibrosis patients with exocrine pancreatic insufficiency through the measurement of the coefficient of fat absorption (CFA). In parallel, Altus is conducting a long-term safety study that will evaluate Trizytek over one year of open-label treatment.

Regarding the Trizytek DIGEST trials, Berkle said, "The DIGEST trials continue to enroll clinical sites and patients. To date, we have 24 sites in the efficacy trial and 36 sites in the safety trial that are initiated in this worldwide Phase III program. Our goal is to report top-line efficacy data from the trial in the second quarter of 2008 and we expect to file a new drug application with the FDA for Trizytek in the first half of 2009."

During the third quarter of this year, Altus started a Phase I clinical trial for ALTU-237, an orally-delivered crystalline formulation of an oxalate-degrading enzyme that is being developed for the treatment of hyperoxalurias and the possible prevention of recurrent kidney stones in individuals with a high risk or history of kidney stones. ALTU-237 has the potential to address these conditions, for which there are limited effective pharmacological treatments.

The ALTU-237 Phase I clinical trial is a single-center, double-blind, placebo-controlled, dose escalating study evaluating the safety and tolerability of ALTU-237 in normal, healthy adults. A secondary objective of the trial is to determine the clinical activity of escalating dose levels of ALTU-237, as measured by changes in urinary oxalate levels in normal healthy adults on a controlled, high oxalate diet and to identify a dose of ALTU-237 for future studies.

Berkle concluded, "The ALTU-237 Phase I trial continues to move forward. This Phase I trial is comprised of 64 subjects randomized into four cohorts. I am pleased to report that the first cohort is completed; we expect the second cohort to be completed this month; and we anticipate enrolling subjects in the third and fourth cohorts in the first quarter of next year."

Conference Call Access Information

The Company will host a conference call to discuss the third quarter results at 11:00 a.m. ET on November 7. The call may be joined via telephone by dialing [phone] or [phone] (for international participants) at least 5 minutes prior to the start of the call. The conference confirmation code is: 3384864. For 72 hours following the call, an audio replay can be accessed by dialing [phone] or [phone] and using the conference confirmation code 3384864. A live audio webcast of the call will also be available on the "Investor Relations" section of the company's website, www.altus.com. An archived audio webcast will be available on the Altus website approximately two hours after the event and will be archived for 30 days.

About Altus Pharmaceuticals Inc.

Altus Pharmaceuticals (NASDAQ: ALTU) 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's website is http://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 anticipated net cash requirements to be used to fund on-going development programs and operations, the expected enrollment of our Trizytek and ALTU-237 clinical trials, the expected time for completion and reporting of results in our Trizytek and ALTU-237 clinical trials, the ultimate scientific robustness of our clinical development programs and the potential strengthening of our product pipeline and possibilities for new strategic opportunities. 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 cost, timing, enrollment and success of ongoing and planned clinical trials; the continuing risks associated with the development and manufacture of products to supply the 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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2007. However, Altus undertakes no obligation to publicly update forward-looking statements, whether because of new information, future events or otherwise.

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