Corautus announces collaboration and licensing agreement for treatment of diabetic neuropathy with VEGF-2.

Corautus Genetics, Inc. (Atlanta, GA) announced that it has entered into agreements with Caritas St. Elizabeth's Medical Center of Boston (CSEMC) that could lead to clinical trials by Corautus to evaluate the safety and efficacy of VEGF-2 for the treatment of diabetic neuropathy. Under the agreements, Corautus will provide its proprietary vascular endothelial growth factor, VEGF-2 for evaluation in the 64-patient, Phase I trial for treating diabetic neuropathy now underway at CSEMC that is funded by a grant from the National Institutes of Health ("NIH"). CSEMC expects enrollment to be completed within 24 months. If Phase I trial data are promising, Corautus has the exclusive right to develop and commercialize VEGF-2 for the treatment of diabetic neuropathy, and will receive the benefit of the data and research from the Phase I trial conducted by CSEMC.

In addition, Corautus is licensing certain intellectual property from CSEMC, including its pending patent applications covering the use of angiogenic growth factors for the treatment of peripheral neuropathy. Corautus has received from CSEMC a worldwide exclusive license to operate under such patents, if such patents are issued, for the use of VEGF-2 for the treatment of peripheral neuropathy, including diabetic neuropathy. Terms of the license agreement include signature and milestone payments and royalties based on commercial product sales of VEGF-2 for the treatment of diabetic neuropathy.

Richard Otto, president and chief executive officer of Corautus, stated, "We are pleased to continue and expand our collaboration with such a prestigious research institution as Caritas St. Elizabeth's Medical Center. This new agreement has the potential of expanding our therapeutic pipeline with an indication that addresses a very large medical need."

Dr. Douglas W. Losordo, program director of NIH Grant for Excellence in Gene Therapy and Chief, Cardiovascular Research CSEMC, said, "After significant research and pre-clinical testing, we concluded that VEGF-2 holds potential as a major new therapy for a very large patient population with few therapeutic alternatives."

VEGF-2 is a naturally occurring growth factor that is believed to promote the development of supplemental collateral blood vessels, a process known as therapeutic angiogenesis. Once administered the DNA plasmid appears to be taken up and expressed by tissue near the injection site. Inside the cell the DNA plasmid then enters the nucleus of the cell without a requirement of incorporation into the genomic DNA. Clinical trials underway expect to show the effect of the expression of DNA-encoded VEGF-2, which in turn stimulates the growth of new blood vessels by promoting the migration and proliferation of endothelial cells, thereby increasing blood flow to nerve cells in the area.

Corautus is currently conducting a Phase IIb trial with VEGF-2 for the treatment of coronary artery disease.

Diabetic neuropathy is a common form of peripheral neuropathy. The peripheral nerves are the nerves that go out from the brain and spinal cord to the muscles, skin, internal organs and glands. Peripheral neuropathy damages these sensory and motor nerves.

According to the American Diabetes Association, 18.2 million people have diabetes in the United States and more than 1.2 million Americans over the age of 20 years old are diagnosed with diabetes each year. An estimated 50 percent of those with diabetes have some form of neuropathy, but not all with neuropathy have symptoms.

Corautus is a biopharmaceutical company dedicated to the development of gene transfer therapy products for the treatment of cardiovascular (severe angina) and peripheral vascular disease. Corautus is currently developing and testing a gene transfer product using the Vascular Endothelial Growth Factor-2 (VEGF-2) gene to promote therapeutic angiogenesis in ischemic muscle.

Caritas St. Elizabeth's Medical Center is a major academic medical center affiliated with Tufts University School of Medicine. Areas of medical excellence include cardiology and cardiovascular research, neurosciences, women's health, high-risk obstetrics, bone and joint health, hematology/oncology, pulmonary medicine and gastroenterology. Caritas St. Elizabeth's is a member of Caritas Christi Health Care, the second largest health care system in New England.

Corautus Genetics, Inc.

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www.corautus.com