Aradigm Reports Positive Phase 2 Results with Inhaled Liposomal Ciprofloxacin Hydrochloride in Patients with Bronchiectasis.

Study demonstrates significant reduction in bacterial infection following four weeks of once daily inhaled treatment

HAYWARD, Calif. -- Aradigm Corporation (OTCBB: ARDM) ("The Company") today announced positive top-line results from an open-label, four week treatment study of efficacy, safety and tolerability with its once daily inhaled liposomal ciprofloxacin hydrochloride (ILCH) in patients with non-cystic fibrosis bronchiectasis. This orphan drug condition is a chronic severe respiratory disease and there is currently no drug specifically approved for its treatment in the US.

The study was conducted at eight leading centers in the United Kingdom and enrolled a total of 36 patients. The patients were randomized into two equal size groups, one receiving 3 mL of ILCH and the other receiving 6 mL of ILCH, once-a-day for the four-week treatment period.

The primary efficacy endpoint was the change from baseline in the sputum Pseudomonas Aeruginosa colony forming units (CFU), the standard objective measure of the reduction in pulmonary bacterial load. The 3 mL and 6 mL doses of ILCH in the evaluable patient population demonstrated significant mean decreases against baseline in the Pseudomonas Aeruginosa CFU over the 28-day treatment period of 3.5 log (p<0.001) and 4.0 log (p<0.001) units, respectively.

With regard to safety, there were no statistically significant changes in lung function at the end of treatment as measured by the normalized forced expiratory volume in one second (FEV1 % predicted). Inhaled liposomal ciprofloxacin hydrochloride was well tolerated; no bronchodilator use was mandated or needed before administration of the study drug. In the 3 mL group, respiratory drug-related adverse reactions were only mild. Three serious adverse events (SAEs) were observed in each dose group, with only one of the six classified as possibly drug-related in the 6 mL group. One of the SAEs in the 3 mL group occurred after randomization but before the first dose was administered.

"Respiratory infections are the major cause of morbidity in patients with bronchiectasis. There is a need to develop a safe and effective anti-infective medication for these patients. The magnitude of the efficacy response seen as a reduction in Pseudomonas Aeruginosa CFU is impressive in this study" said Dr. Diana Bilton of Royal Brompton Hospital, London, UK, a respiratory physician and lead investigator in the study. "Together with the good tolerability of this new treatment, the results compare very favorably with trials using other inhaled antibiotics in similar patient populations with this severely debilitating condition."

"We are very pleased with these data with our once-a-day inhaled liposomal ciprofloxacin hydrochloride in non-cystic fibrosis bronchiectasis patients. These latest results complement our previously reported successful Phase 2 study with ILCH in cystic fibrosis patients," said Dr. Igor Gonda, CEO and President, Aradigm Corporation. "We are making significant clinical advances in the development of valuable medicines for the prevention and treatment of severe respiratory diseases. We will continue to work with the regulatory authorities to complete the plans for the remaining development of ILCH."

The Company will provide more details on the data from this Phase 2 study at leading scientific meetings and conferences.

About bronchiectasis

Bronchiectasis is a chronic condition characterized by abnormal dilatation of the bronchi and bronchioles associated with chronic infection. It is frequently observed in patients with cystic fibrosis. However, it is a condition that affects about 110,000 people without cystic fibrosis in the United States and many more in other countries, and results from a cycle of inflammation, recurrent infection, and bronchial wall damage. The Company was granted orphan-drug designation in the US for the management of non-cystic fibrosis bronchiectasis with inhaled liposomal ciprofloxacin.

About cystic fibrosis (CF)

CF is a genetic disease that causes thick, sticky mucus to form in the lungs, pancreas and other organs. In the lungs, the mucus tends to block the airways, causing lung damage and making these patients highly susceptible to lung infections. According to the Cystic Fibrosis Foundation, CF affects roughly 30,000 children and adults in the United States and roughly 70,000 children and adults worldwide. According to the American Lung Association, the direct medical care costs for an individual with CF are currently estimated to be in excess of $40,000 per year. The Company was granted orphan drug designation in the US and EU for the management of CF with inhaled liposomal ciprofloxacin.

About liposomal ciprofloxacin

Ciprofloxacin is a widely prescribed antibiotic to treat infections of the lung frequently experienced by cystic fibrosis patients. It is often preferred because of its broad-spectrum anti-bacterial action. The available oral and intravenous formulations of the drug are used to treat episodes of acute exacerbations of lung infections in CF. The Company's once-a-day novel inhaled formulation of ciprofloxacin delivered in liposomes is to be used for chronic maintenance therapy as it is expected to achieve higher antibiotic concentration at the site of infection and relatively low systemic antibiotic concentrations to minimize side-effects. The Company previously reported the results of a Phase 2a study in 22 patients with cystic fibrosis who received ILCH once a day for 2 weeks. The treatment resulted in a significant reduction of respiratory infections as measured by CFU in the patients' sputum and improvement of lung function (forced expiratory volume in one second, FEV1) and it was well tolerated. The Company is also developing ILCH as a potential treatment for prevention and treatment of bioterrorism infections such as inhaled anthrax.

About Aradigm ("The Company")

The Company is an emerging specialty pharmaceutical company focused on the development and commercialization of a portfolio of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. Current activities include partnered activities on inhaled treprostinil for the treatment of pulmonary arterial hypertension with Lung Rx, Inc (a wholly owned subsidiary of United Therapeutics Corporation) and other self-initiated development and partnered programs addressing the treatment of cystic fibrosis, bronchiectasis, pulmonary hypertension, asthma and COPD, inhalation anthrax infections and smoking cessation.

More information about the Company can be found at www.aradigm.com.

Forward-Looking Statements

Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including the advancement of product development, as well as the other risks detailed from time to time in Aradigm Corporation's Securities and Exchange Commission (SEC) Filings, including the Company's Annual Report on Form 10-K, and quarterly reports on Form 10-Q.

Aradigm and the Aradigm Logo are registered trademarks of Aradigm Corporation.