PHARMASSET TO DEVELOP CLEVUDINE FOR HEPATITIS B.

Pharmasset, Inc. and Bukwang Pharm. Co., Ltd. have entered into an exclusive license agreement under which Pharmasset will develop and commercialize Clevudine, also known as L-FMAU, for the treatment of chronic hepatitis B virus (HBV) infections in the Americas, Europe, and other select territories. Clevudine is a potent HBV antiviral currently in Phase 3 clinical trials in Korea and has been the subject of earlier stage clinical trials under an Investigational New Drug application filed with the US FDA. The financial terms of the agreement were not disclosed.

Clevudine is an oral, once-daily nucleoside analog drug candidate for the treatment of HBV that was shown to be well tolerated and potent in previously completed clinical studies. Clevudine also demonstrated a unique sustained therapeutic effect, observed as a prolonged rebound of virus to pretreatment levels, after the cessation of 24 weeks of treatment in clinical trials. Several advanced-stage clinical trials of Clevudine are ongoing, including a 48-week, Phase 3 clinical trial that is being conducted in Korea in over 200 patients. These individuals are receiving 24 weeks of treatment with 30 mg of Clevudine, followed by 24 weeks of treatment with 10 mg Clevudine. Two other 24-week Phase 3 clinical trials are being concluded in both HBeAg(+) and HBeAg(-) patients in Korea. Preliminary results of these trials have indicated that Clevudine reduced the HBV viral load to undetectable levels after 24 weeks in 59% and 92% of trial participants, respectively.

Schaefer Price, Pharmasset's president & CEO, stated, "As new, better therapies are introduced into the HBV market, we believe the market will grow and the standard of care for the treatment of chronic Hepatitis B will evolve into a combination therapy similar to HAART therapy used to combat HIV. Based on the current clinical findings, we believe Clevudine has the potential to be a key component of future combination therapy for chronic HBV. With their different mechanisms of action against the hepatitis B virus, Clevudine and Racivir(R), Pharmasset's Phase 2 drug candidate, have the potential to address this anticipated need for HBV combination therapy."

Under the terms of the agreement, Pharmasset gained development and commercialization rights to Clevudine, and Bukwang received an option to Racivir for the treatment of chronic Hepatitis B in Korea. Bukwang granted Pharmasset commercialization rights to Clevudine for North, Central and South America, Europe, the Caribbean, and Israel, but has retained rights to certain other countries, excluding those Asian territories that were licensed by Bukwang to Eisai Pharmaceuticals in November 2004.

"We are confident in Pharmasset's ability to successfully develop Clevudine," noted Sung-Koo Lee, Bukwang's president and representative director of the board. "Bukwang and Pharmasset possess the combined expertise required to accelerate the development of Clevudine into a viable, once-daily treatment option for patients chronically-infected with HBV."

About Hepatitis B

Hepatitis B is a serious disease caused by the hepatitis B virus (HBV). According to the World Health Organization (WHO), more than 350 million people worldwide are chronically infected with the hepatitis B virus, including approximately 1.25 million the United States. Chronic Hepatitis B infection can lead to cirrhosis of the liver, liver failure, and liver cancer, which collectively cause over 1 million deaths worldwide each year.

Pharmasset, Inc. is an emerging pharmaceutical company committed to the discovery, development, and commercialization of novel antiviral drugs. The company leverages its expertise in nucleoside chemistry to develop therapeutics to combat infections caused by drug-resistant human immunodeficiency virus (HIV) and hepatitis viruses. Pharmasset has two drugs in Phase 2 clinical trials for the treatment of HIV, Reverset(TM) and Racivir(R), and several other antiviral compounds in advanced preclinical studies. In 2003, Pharmasset entered into a collaborative licensing agreement with Incyte Corporation for the development and commercialization of Reverset in certain territories. In 2004, Pharmasset entered into a collaboration agreement with Hoffmann-La Roche for the development and commercialization of PSI-6130 in certain territories for the treatment of Hepatitis C. Pharmasset retains proprietary development and commercialization rights to the balance of its clinical and preclinical pipeline.

Pharmasset's expanding portfolio of antiviral therapeutics aims to improve the lives of individuals around the world.

Bukwang Pharm. Co., Ltd. is a leading Korean pharmaceutical company listed on the Korean Stock Exchange [KRX:003000]. The company has been in business for over 40 years, and anticipates achieving US$130 million in net sales in 2005. Sales are primarily derived from products licensed from Europe, the United States, and Japan. The company is currently investing significant resources in R&D to create a robust pipeline of preclinical and clinical agents for the treatment of antiviral diseases, diabetic neuropathy and cancer.

With a vision of delivering better human healthcare products, Bukwang has expanded its R&D activities through a subsidiary (Anterogen Co., Ltd.) focusing on adult stem cell research for heart tissue regeneration from bone marrow derived stem cells.

For more information, visit http://www.pharmasset.com or call 678/395-0035.