Tercica Launches Increlex in the U.S.; Only Drug Approved for the Long-Term Treatment of Growth Failure Caused by Severe Primary IGFD.

BRISBANE, Calif. -- Tercica, Inc. (Nasdaq:TRCA) today announced the U.S. commercial launch of Increlex(TM) (mecasermin (rDNA origin) injection), the only recombinant human insulin-like growth factor-1 (rhIGF-1) replacement therapy indicated for the long-term treatment of growth failure in children with severe Primary IGFD. Tercica also announced that following its December 2005 submission for marketing approval in the EU, the company is preparing for a potential January 2007 launch of Increlex in Europe. Increlex, which is now available to patients throughout the U.S., represents the first major innovation in treating children with short stature since recombinant human growth hormone was approved 20 years ago.

"With today's commercial launch of Increlex, physicians can now prescribe a safe and effective drug backed by 321 patient-years of clinical trial treatment experience in children affected by severe Primary IGFD," said John A. Scarlett, M.D., President and Chief Executive Officer of Tercica. "In addition to a label with safety and efficacy data representing up to 12.5 years of treatment in some children, Increlex is the most convenient rhIGF-1 replacement therapy product for parents and children to store, transport and administer." Increlex was generally well tolerated and no subjects withdrew from the clinical trials due to adverse events. The most common drug-related adverse events were hypoglycemia, lipohypertrophy, and tonsillar hypertrophy.

Tercica's salesforce, which has been active in the field in the U.S. since October, has been calling on the pediatric endocrine community and discussing this newly understood cause of short stature and Increlex as a treatment option for children afflicted with severe Primary IGFD. In addition, the company has fully implemented TerciCare, its reimbursement support program that will facilitate the exchange of information between patients, healthcare providers, and health insurance companies in order to assist patients in gaining appropriate reimbursement coverage for Increlex. TerciCare also serves as the portal to Tercica's Patient Assistance Program, which will support access to Increlex for patients who do not have adequate medical coverage.

Tercica estimates that approximately 6,000 children in the U.S., and approximately the same number in the EU, are affected by severe Primary IGFD. The company plans to broaden the indicated use for Increlex in the U.S. and the EU with supplemental applications, pending positive results of ongoing clinical trials evaluating Increlex in children with Primary IGFD. Primary IGFD is characterized by height and IGF-1 levels that are two standard deviations below the mean, in spite of normal or elevated growth hormone levels. Tercica estimates that approximately 30,000 children in the U.S. are affected by Primary IGFD, which is also similar to the estimated EU market size.

About IGF-1 and severe Primary IGFD

The active ingredient of Increlex is identical to the natural hormone IGF-1, which the body normally produces in response to stimulation by GH. IGF-1 is the direct mediator of growth hormone's effect on statural growth and must be present in order for children's bones, cartilage and organs to grow normally. Without adequate IGF-1, children cannot achieve a height within the normal range.

Children with severe Primary IGFD have a height that is three standard deviations or more below the mean, they are IGF-1 deficient but are not GH deficient and, because they are resistant to the effects of GH, they cannot be expected to respond adequately to approved doses of GH. Severe Primary IGFD can lead to a range of other metabolic disorders including lipid abnormalities, decreased bone density, obesity and insulin resistance.

About Tercica

Tercica, Inc. is a biopharmaceutical company focused on the development and commercialization of products to improve endocrine health. The company's first product, Increlex(TM) (mecasermin (rDNA origin) injection), or recombinant human insulin-like growth factor-1 (rhIGF-1), is approved by the FDA for the treatment of severe Primary IGFD. Increlex offers several convenience advantages, including a multi-dose vial good for 30 days after first use and simple refrigeration requirements, making it easy for children and parents to store, transport, and administer. For further information on Tercica, please visit www.tercica.com.

Safe Harbor Statement

Except for the historical statements contained herein, this press release contains forward-looking statements, including without limitation, the statements that Tercica: (1) is preparing for a potential January 2007 launch of Increlex in Europe; (2) believes that approximately 30,000 children in the U.S. and EU are affected by Primary IGFD and 6,000 children in the U.S. and EU are affected by severe Primary IGFD; and (3) plans to broaden the indicated use for Increlex in the U.S. and EU. Because Tercica's forward-looking statements are subject to risks and uncertainties, there are important factors that could cause actual results to differ materially from those in the forward-looking statements. These factors include without limitation those risks and uncertainties disclosed from time to time in reports filed by Tercica with the SEC, most recently Tercica's Form 10-Q filed on November 4, 2005, and Form 8-Ks filed on December 14 and December 15, 2005, and other factors regarding: (1), Increlex may not be approved by the EMEA; (2), there may be fewer children than Tercica estimates; and (3) results from the ongoing clinical trials may not be sufficient to obtain marketing approval for a broader indication. These statements are based on information as the date of this press release. Tercica assumes no obligation to update any forward-looking statements.