Saegis Pharmaceuticals, Inc. Completes $30 Million Private Financing; Funding Supports Ongoing Clinical Development of Novel Therapies for Alzheimer's Disease and Schizophrenia.

Business Editors/Health/Medical Writers

HALF MOON BAY, Calif.--(BUSINESS WIRE)--Nov. 17, 2003

Saegis Pharmaceuticals, Inc., a privately held biopharmaceutical company focused on developing medicines that protect and enhance the function of the human mind, today announced that it has raised $30 million in a Series B private equity financing led by Versant Ventures.

Joining Versant in the round as a new investor is Technology Partners. Also participating are Series A investors Sofinnova Ventures (San Francisco), their sister-partnership Sofinnova Partners (Paris), Polaris Venture Partners, and NeuroVentures. Saegis raised $14 million in the Series A round completed in 2001.

"We are very pleased to expand our list of venture partners as we move into the next important stage of development for our lead compounds," said Rodney Pearlman, Ph.D., President and CEO of Saegis Pharmaceuticals. "This financing will allow us to complete a Phase II clinical trial with SGS742 in mild to moderate Alzheimer's disease and initiate clinical evaluation of SGS518 in cognitive impairment associated with schizophrenia (CIAS)."

"Saegis has already compiled an impressive track record of efficient clinical development, making them a leader in the race to cure memory loss," said Brian Atwood, a co-founder and managing director of Versant Ventures. "With a promising portfolio of compounds with demonstrated preclinical and clinical activity in mental function and a broad, mechanism-independent discovery platform to identify and validate new targets, we believe Saegis is uniquely positioned to meet currently unsatisfied medical needs in this attractive field."

In conjunction with the financing, Mr. Atwood and Roger Quy, Ph.D., a partner at Technology Partners, will join the Saegis Board of Directors.

Alzheimer's Disease (AD), a form of age-related dementia in which the progressive destruction of brain cells leads to an increasingly severe loss of cognitive function, affects more than 4.5 million people in the United States, a number expected to grow to 5.7 million by 2020. Although several medications are currently used to treat AD, none are disease modifying and most have side-effects that become dose limiting, particularly in milder forms of the disease. Saegis currently has two compounds under investigation as treatments for mild to moderate AD, including its lead compound, SGS742, which will be entering a Phase II clinical trial in this indication.

Cognitive impairment associated with schizophrenia (CIAS) is recognized as a driver of disability in schizophrenia and remains a significant unmet medical need within the overall management of the disease. Schizophrenia is thought to affect 1-2 percent of the population, with approximately 2 million people diagnosed with the disease in the United States. It represents the second fastest growing therapeutic area in the central nervous system category, generating $7.7 billion in sales in 2001. Saegis has begun investigating the potential of SGS518, in partnership with Eli Lilly and Company, as a cognition enhancer in schizophrenia.

Founded in 1999, Saegis Pharmaceuticals is a pioneer in the development of medicines that protect and enhance the function of the human mind. Through licensing activity, development partnerships, and internal discovery programs, Saegis Pharmaceuticals is building a portfolio of compounds with activity against a range of disorders of the brain and central nervous system, including Alzheimer's disease, mild cognitive impairment, and cognitive impairment associated with schizophrenia. Currently the Company has three orally available small molecule compounds in clinical development, two of which have already demonstrated efficacy and safety in humans. For more information, visit www.saegispharma.com.