Axys to Develop Inhaled Tryptase Inhibitor for Asthma; Axys and Bayer Amend Ongoing Collaboration.

Business Editors and Health/Medical Writers

SOUTH SAN FRANCISCO, Calif.--(BW HealthWire)--Jan. 10, 2001

Axys Pharmaceuticals, Inc. (Nasdaq:AXPH) today announced a newly amended agreement with Bayer AG of Leverkusen, Germany that provides Axys exclusive rights to develop a specific tryptase inhibitor, APC 2059, as a potential inhaled therapy for asthma and as an injectable treatment for ulcerative colitis. The collaborative partnership as it relates to the development of oral tryptase inhibitors for asthma remains unchanged, as Bayer is continuing to assess collaboration compounds in efficacy and toxicology studies.

Axys said that it is planning a clinical development program to study the safety and effectiveness of APC 2059 as an inhaled non-steroidal anti-inflammatory treatment for mild-to-moderate asthmatics in 2001. This is in addition to a separate announcement made today indicating that additional Phase IIb/III clinical trials of APC 2059 in ulcerative colitis patients would be planned, based on positive results obtained from an open-label trial just completed in that potential indication.

"Tryptase inhibition represents an important strategy for attenuating the underlying inflammation that causes asthma," said Paul J. Hastings, President and Chief Executive Officer of Axys. "We believe that we will be able to successfully develop a therapy that reduces inflammation without the serious side effects associated with steroids."

Hastings further indicated that he believes the tryptase inhibitor APC 2059 offers the potential for use either alone or in combination with other asthma therapies that treat the symptoms of the disease. Furthermore, according to Hastings, both potential indications -- asthma and ulcerative colitis -- represent diseases with unmet needs for new therapeutics.

Axys is paying Bayer undisclosed fees for the rights to develop non-oral tryptase inhibitor products for asthma and ulcerative colitis. In addition, Bayer is receiving a one-time right of first offer if Axys proposes to partner these programs in the future. If Bayer exercises its first offer right in either therapeutic area, Bayer will pay Axys undisclosed fees and be responsible for further development and commercialization.

Collaboration Background

APC 2059 is a second-generation tryptase inhibitor developed by Axys, which has an excellent pharmacokinetic and metabolic profile. Axys' first-generation tryptase inhibitor, APC 366, was evaluated in human clinical studies from 1994 -1998, and in a Phase IIa study was shown in a clinical model of asthma to produce a statistically significant benefit when administered by inhalation. Based on those results, Axys scientists developed two additional generations of tryptase inhibitors in collaboration with Bayer AG. One of the second generation compounds is APC 2059, a non-peptide small molecule that is approximately 1000 times more selective in its inhibition of tryptase and 10,000 times more selective than its predecessor compound, APC 366, but is not orally available.

The third generation tryptase inhibitor developed in collaboration with Bayer, BAY 44-3428, is orally bioavailable. Compared to APC 2059, it represents a distinctly different chemical family designed using a proprietary algorithm discovered by Axys and known as the Delta technology. This unique inhibitory technology was previously published in Nature in early 1998, and is covered by three patents issued to Axys: U.S. Patent Nos. 5,693,515; 5,900,371, and 5,925,553. Composition of matter patents for specific molecules now under study at Bayer are protected by patent applications filed jointly by Axys and Bayer. BAY 44-3428 was withdrawn from IND-track studies due to preclinical reproductive toxicity that appears to be unrelated to tryptase inhibition. Bayer is continuing to assess orally bioavailable compounds in efficacy and toxicology studies.

... Biology of Tryptase Inhibition

Tryptase is an enzyme found in mast cells, and is believed to function as a potent mediator of mast cell-related allergic inflammatory conditions. It plays an important role in the cascade of events that leads to inflammation. Its release from degranulated mast cells after presentation by an antigen triggers a variety of events, including the production of histamines as well as other biochemical substances that recruit inflammatory cells.

In so doing, tryptase is believed to play a role in the chronic inflammation and changes that occur in the airways of asthma patients. By inhibiting and thereby reducing the production of tryptase, Axys believes it may reduce both the symptomatic episodes associated with asthma, and more importantly the structural changes in, and gradual deterioration of, lung function in asthmatics.

The small molecule now under development at Axys is an enzyme inhibitor that acts one step later in the inflammation cascade than current anti-IGE antibodies in development. Tryptase inhibition, like the anti-IGE compound and steroids, seeks to reduce underlying inflammation associated with asthma rather than providing symptomatic relief.

Axys Pharmaceuticals, Inc., an integrated small molecule drug discovery and development company, has a broad pipeline of products for chronic therapeutic applications that are partnered with world-class pharmaceutical companies and a proprietary product portfolio in oncology. Axys is also building shareholder value through affiliated businesses that leverage the Axys technologies in order to provide capital for Axys' drug discovery and development programs, with minority investments in: Discovery Partners International, Inc. (Nasdaq:DPII), a chemistry services company; DNA Sciences, a genetics company; and Akkadix Corporation, an agricultural biotechnology company.

Except for the historical information contained herein, this press release contains forward-looking statements that involve risks and uncertainties which could cause Axys' actual results to differ materially from those discussed here, including the risk that clinical trials will not proceed as anticipated or may not be successful, the risks inherent in early stage development and the reliance on the efforts of collaborative partners, the risk that Axys collaborations will not be successful, the risk that Axys will not be successful in entering into new collaborations, market risk associated with Axys' substantial ownership interest in Discovery Partners International, Inc., competition and marketing risk, and general economic conditions that may affect Axys' actual results and developments. Additional factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled "What Factors Could Cause Our Results to Differ Significantly from Those You Might Expect?" and "What Other Matters Should Stockholders Consider with Respect to Axys?" in the Axys' SEC Reports, including Axys' report on Form 10-K for the fiscal year ended December 31, 1999.

For more information about Axys Pharmaceuticals, Inc., please visit the company's website at http://www.axyspharm.com.