ESP Pharma Acquires Late-Stage Development Products For Treating Hypertensive Crisis in Pregnant Women; Initiates New Phase of Growth Strategy with Acquisition of First Pipeline Drugs.

Business Editors & Health/Medical Writers

BIOWIRE2K

EDISON, N.J.--(BUSINESS WIRE)--Oct. 15, 2002

ESP Pharma, Inc., a specialty pharmaceutical company focused on the acute-care market, announced it has acquired from Barbeau Pharma, Inc. (Evanston, IL) exclusive rights to both a new formulation of hydralazine hydrochloride (Hydralazine) and a derivative compound in late-stage development for treating severe pre-eclampsia and eclampsia, potentially life-threatening hypertensive conditions.

Pregnancy induced hypertension complicates 7% to 10% of U.S. pregnancies annually and is a major cause of maternal and fetal morbidity and mortality. Severe pre-eclampsia involves blood pressures of 140/90 mm Hg or greater. It afflicts about 10% of patients, typically after 20 weeks gestation, and can evolve into eclampsia, a condition where patients experience convulsions and other symptoms.

Hydralazine, an approved anti-hypertensive agent, is not indicated for severe pre-eclampsia or eclampsia, albeit an injectable form of the medication is used "off-label" as the drug of choice in treating these conditions. Potential problems associated with the currently available formulation include instability and risks of contamination during procedures to dilute the medication.

Based on compelling evidence in the published clinical literature and meetings with the FDA, Barbeau is developing Hydralazine into a more stable and convenient formulation. Barbeau plans to complete the retrospective documentation study and the preparation of chemistry, manufacturing and control (CMC) data necessary to submit a 505(b)(2) New Drug Application (NDA) which is generally less time consuming, because the more complex human clinical trials required for submitting full NDAs for new chemical entities are not necessary.

Under the terms of today's announced agreement, ESP will provide an up-front equity investment in Barbeau to complete the work required for a 505(b)(2) filing, plus a milestone payment at NDA approval, and royalties on future sales. In turn, ESP will own the NDA and will receive 8% preferred Barbeau shares that are convertible into common stock under certain conditions including an initial public offering by Barbeau. Further terms of the transaction were not disclosed.

"Acquiring the rights to these compounds represents a significantly positive development for ESP," said Lou Berardi, ESP Pharma's CFO and Executive Vice President of Corporate Development. "In May we initiated the first phase of ESP's early-game growth plan. This involves the re-launch of Cardene(R) I.V. and a strategy of identifying, acquiring, and revitalizing the marketing of novel commercially available, but under promoted acute-care therapeutics." At that time ESP acquired four cardiovascular drugs from Wyeth (NYSE:WYE) including the calcium channel blocker Cardene(R) I.V. which is now being actively detailed by ESP's hospital sales force.

"Through the agreement with Barbeau, ESP has taken the next important step in our growth strategy by establishing the first of our product development programs," noted Berardi. "Also, the 505(b)(2) route for filing this NDA is highly cost effective, and the new formulation of Hydralazine for treating severe pre-eclampsia and eclampsia should receive seven-years marketing exclusivity under U.S. orphan drug regulations. Moreover, once launched, injectable Hydralazine would have excellent synergy with our existing focus on the acute-care market and the product is expected to be accretive to earnings in the first year of sales."

ESP Pharma noted that Barbeau Pharma is also developing and has filed a patent application for a follow up compound with additional advantages. Under the terms of its agreement with Barbeau, ESP said it has been granted an option to this compound for the treatment of expanded indications of hypertensive crises.

Alan Wasserstein, President of Barbeau Pharma, said "ESP, with its dedicated hospital sales force and focus on the acute-care market, is the perfect organization to promote and bring greater awareness to critical-care physicians on the best methods of treating severe pre-eclampsia and eclampsia. Barbeau pursues a unique strategy of identifying value-added opportunities for existing drugs and then reformulating and developing these products for new indications resulting in meaningful medical improvements. The combined strengths of Barbeau and ESP represent an opportunity to make important contributions in treating the life-threatening conditions of severe pre-eclampsia and eclampsia. We are looking forward to working with ESP and expect this collaboration to provide excellent growth prospects for both companies."

About ESP Pharma, Inc.

ESP Pharma is committed to Excellence in Specialty Pharmaceuticals and is dedicated to helping physicians improve patient outcomes in the acute care setting. Under the leadership of its Chairman and CEO, John Spitznagel, and a highly experienced and strong management team, the Company focuses on exploring and identifying opportunities to selectively acquire and enhance the market potential of novel, commercially available therapeutics and late-stage development drugs to fulfill unmet market needs. Opportunities for ESP Pharma to acquire product marketing, manufacturing, and development rights are the result of several factors, including industry consolidation and because many existing and developmental drugs cannot meet the revenue thresholds necessary for major pharmaceutical companies. ESP Pharma, a privately held company, has investment support from the leading healthcare venture capital and private equity firms of Domain Associates, LLC (http://www.domainvc.com), Apax Partners, Inc. (http://www.apax.com), and New Enterprise Associates (http://www.nea.com). Additional information about ESP Pharma is available on the internet at http://www.ESPPharma.com

About Barbeau Pharma, Inc.

Barbeau Pharma, Inc., located in Evanston, Illinois, develops, gains marketing approval and markets or out-licenses specialty ethical pharmaceuticals. The company pursues the development and regulatory approval of drugs currently on the market which no longer enjoy patent protection and which are experiencing substantial off-label use for patient treatments. With several drugs under development, Barbeau identifies new opportunities for existing, off-patent therapeutics through a strategy of development for new indications that will also have the advantage of marketing protection provided by patents on the reformulated chemical entity or its method of manufacture, the Waxman-Hatch Act, or Orphan Drug regulations. The company focuses on unmet or under-served clinical needs in the areas of migraine prophylaxis, epilepsy and bipolar disorder, acute hypertensive crisis, chemotherapy induced nausea and vomiting, nocturnal incontinence and gastrotintestional disorders. For additional information, visit the company's website at http://www.BarbeauPharma.com/