Clinical Trial of Treatment for Sleep Disorders Ends in Success; Phase 2 Discovery Announces Positive Results for PD-6735 in Primary Insomnia.

Business Editors/Health/Medical Writers

CINCINNATI--(BUSINESS WIRE)--May 20, 2004

Phase 2 Discovery (www.phase2d.com) today reported results from a phase 2 clinical trial that demonstrates that PD-6735, a melatonin analog, produced statistically significant improvements in sleep latency in patients with primary insomnia.

In the randomized, placebo-controlled cross-over study, 40 patients with moderate primary insomnia received placebo, and three doses of PD-6735--20 mg, 50 mg, and 100 mg. Patients experienced statistically significant improvements in sleep latency after each dose of PD-6735--a 31-percent improvement after 20 mg, a 32-percent improvement after 50 mg, and a 41-percent improvement after 100 mg PD-6735 (overall P = 0.0003). Sleep performance was measured using polysomnography.

"We are very excited by the positive results of this trial," said Frank Zemlan, Ph.D., CEO of Phase 2 Discovery. "PD-6735 produced highly significant improvements in sleep latency in this relatively small study. Other positive findings in the trial were improvements in perceived sleep latency and a lack of morning-after psychomotor impairment. Additionally, PD-6735 continues to demonstrate an excellent safety profile."

A significant outcome of this study is that patients with more severe insomnia showed greater improvements as compared to those with mild insomnia," said Dr. Zemlan. "These individuals showed larger improvements in sleep latency as well as improvements in time awake after sleep onset and time in stage 3 and 4 sleep. These patients also showed larger improvements in perceived sleep latency as compared to less severely affected individuals."

Dr. Zemlan continued, "Our phase 2 data suggest that PD-6735 is a safe and effective treatment for primary insomnia. The compound may be an important new option for the treatment of sleep disorders, which negatively impact the lives of millions of Americans. PD-6735 has an entirely novel mechanism of action, which we believe could have substantial benefits over existing therapies."

Based on the positive results from this and two prior phase 2 clinical trials, Phase 2 Discovery plans to initiate phase 3 development of PD-6735 by the end of the year.

For more information, contact Dr. Jeff Mulchahey, Vice President of Clinical Affairs, at [phone], or via e-mail at [e-mail].

About PD-6735

PD-6735 is a proprietary melatonin analog, 6-chloro-(beta)-methyl melatonin. It is a high affinity agonist at melatonin-1 and melatonin-2 receptors, with high selectivity for these over non-melatonin receptors. PD-6735 is being developed as a treatment for sleep and circadian rhythm disorders. It has a mode of action different from that of benzodiazepine receptor ligands presently on the market or nearing launch. The compound's novel mode of action is expected to yield minimal side effects and risk of abuse, which may provide a competitive advantage in the marketplace.

About Phase 2 Discovery

Phase 2 Discovery (P2D) utilizes its clinical expertise in psychiatry and neurology to develop prescription pharmaceuticals, fulfilling unmet patient needs in these disciplines. P2D's business model is to acquire promising compounds for psychiatric and neurologic indications at an early stage of their development. P2D performs the appropriate preclinical studies, Phase 1, Phase 2 and initial Phase 3 clinical trials as necessary in order to establish proof of concept and clinical efficacy. During Phase 3, P2D partners with a major pharmaceutical company for subsequent Phase 3 development and commercialization. P2D currently has multiple compounds in preclinical and clinical development. P2D is a privately held company located in Cincinnati. Additional information about P2D is available at: www.phase2d.com .