UNITED STATES
` SECURITIES AND EXCHANGE COMMISSION
` Washington, D.C. 20549
`
`
`
` FORM 10-K
`(Mark One)
` [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
` Exchange Act of 1934
` For the Fiscal Year Ended December 31, 1998
`
` or
`
`
`
`
`
` [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
` Exchange Act of 1934
` Commission File Number: 0-19171
`
`
`
` ICOS CORPORATION
` (Exact name of registrant as specified in its charter)
`
`
`
` Delaware 91-1463450
` (State of incorporation) (I.R.S. Employer
` Identification No.)
` 22021 - 20th Avenue S.E.
` Bothell, Washington 98021
` (425) 485-1900
` (Address, including zip code, and telephone number, including area code, of
` principal executive offices)
` Securities registered pursuant to Section 12(b) of the Act: None
` Securities registered pursuant to Section 12(g) of the Act:
` Common Stock, $.01 par value
`
`
`
` Indicate by check mark whether the registrant (1) has filed all reports
`required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
`1934 during the preceding 12 months (or for such shorter period that the
`registrant was required to file such reports) and (2) has been subject to such
`filing requirements for the past 90 days.
`
`
`
` Yes X No
` ------ ------
` Indicate by check mark if disclosure of delinquent filers pursuant to Item
`405 of Regulation S-K is not contained herein, and will not be contained, to the
`best of registrant's knowledge, in definitive proxy or information statements
`incorporated by reference in Part III of this Form 10-K or any amendment to this
`Form 10-K. [X]
`
`State the aggregate market value of voting and non-voting stock held by non-
`affiliates of the registrant as of March 26, 1999.
`
` $1,489,109,168
`
`
`
`
`Indicate the number of shares outstanding of each of the registrant's classes of
` Common Stock as of March 26, 1999.
`
`
`
` Title of Class Number of Shares
` -------------- ----------------
` Common Stock, $.01 par value 42,692,350
`
` DOCUMENTS INCORPORATED BY REFERENCE
`
`
`
`
`Portions of the Registrant's definitive Proxy Statement for the annual meeting
`of stockholders to be held on May 6, 1999 relating to "Election of Directors,"
`"Continuing Directors (until 2000)," "Continuing Directors (until 2001)," "Other
`Executive Officers," "Compliance with Section 16(a) of the Securities Exchange
`Act of 1934," "Compensation of Directors," "Executive Compensation," "1998
`Option Grants," "1998 Option Exercises and Year-end Option Values,"
`"Compensation Committee Interlocks and Insider Participation," "Employment
`Contracts, Termination of Employment and Change of Control Arrangements,"
`"Security Ownership of Certain Beneficial Owners and Management," and "Certain
`Relationships and Related Transactions" are incorporated by reference in Part
`III of this Form 10-K.
`
`
`
`MonoSol 1017-0001
`
`MonoSol v. ICOS
`IPR2017-00412
`
`

`
`
`
`
` ICOS CORPORATION
` ----------------
`
` TABLE OF CONTENTS
` -----------------
`
`
`
`Part I
`- ------
` Item 1. Business
` Item 2. Properties
` Item 3. Legal Proceedings
` Item 4. Submission of Matters to a Vote of
` Security Holders
`
`Part II
`- -------
` Item 5. Market for the Registrant's Common Equity and Related Stockholder
` Matters
` Item 6. Selected Financial Data
` Item 7. Management's Discussion and Analysis of Financial Condition and
` Results of Operations
` Item 8. Consolidated Financial Statements and Supplementary Data
` Item 9. Changes In and Disagreements With Accountants on Accounting and
` Financial Disclosure
`
`Part III
`- --------
` Item 10. Directors and Executive Officers of the Registrant
` Item 11. Executive Compensation
` Item 12. Security Ownership of Certain Beneficial Owners and Management
` Item 13. Certain Relationships and Related Transactions
`
`Part IV
`- -------
` Item 14. Exhibits, Consolidated Financial Statement Schedules and Reports on
` Form 8-K
`
`
`
` 2
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`MonoSol 1017-0002
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`

`
`
`
`
` PART I
`
`Item 1. Business
`
`Overview
`- --------
`
`ICOS Corporation ("ICOS" or the "Company"), formed in 1989, is developing
`proprietary biopharmaceuticals and small molecule pharmaceuticals for the
`treatment of inflammatory diseases and other serious medical conditions.
`
`The Company's fundamental strategy is to identify and develop a significant
`number of potential product candidates into breakthrough products with high
`commercial potential. By understanding the underlying biochemical and
`physiological mechanisms and identifying the cellular and molecular entities
`involved in the disease process, ICOS is developing biopharmaceutical products
`that address important opportunities in the treatment of chronic and acute
`diseases that have inflammatory components as well as certain cardiovascular
`diseases and cancer. Through this strategy, the Company believes it will be
`able to develop novel therapeutics that are more selective and efficacious than
`current therapeutics.
`
`When used in this discussion, the words "believes," "intends," "anticipates,"
`"plans to" and "expects" and similar expressions are intended to identify
`forward-looking statements. Such statements are subject to certain risks and
`uncertainties that could cause actual results to differ materially from those
`projected. See "Important Factors Regarding Forward-Looking Statements."
`Readers are cautioned not to place undue reliance on such forward-looking
`statements, which speak only as of the date hereof. The Company undertakes no
`obligation to publicly release the results of any revisions to such forward-
`looking statements that may be made to reflect events or circumstances after the
`date hereof or to reflect the occurrence of unanticipated events.
`
`Long-Range Strategy
`- -------------------
`
`The Company continues to develop a broad portfolio of potential product
`candidates encompassing a wide variety of approaches to inflammatory conditions
`and other serious diseases. Human disease is a complex and complicated process
`involving many physiological and biological components. As such, the task of
`developing therapeutics to treat these diseases is difficult and time-consuming.
`A large number of potential product candidates are not successfully developed
`because of the inability to prove that they are either safe or efficacious. In
`order to compensate for this risk, the Company utilizes a strategy of developing
`a number of approaches to the treatment of inflammatory conditions which
`encompass a variety of mechanisms and approaches to the inhibition of
`inflammation and other disease processes. Presently, the Company and its
`affiliates have five product candidates in clinical trials including three
`monoclonal antibodies: LeukArrest(TM), ICM3 and IC14, Pafase(TM), a recombinant
`form of a naturally occurring human enzyme, and IC351, a small molecule product
`candidate. In addition, the Company has several product candidates in the
`research and preclinical phases of development. In 1998 the Company established
`commercial names for two of its product candidates: LeukArrest(TM) is the name
`presently given to the product candidate formerly known as Hu23F2G, a monoclonal
`antibody developed by ICOS to block leukocyte cell adhesion in humans, and
`Pafase(TM), formerly known as rPAF-AH, a potent proinflammatory mediator which
`is a naturally occurring human enzyme that destroys platelet-activating factor
`and eliminates its proinflammatory effects. Over the past few years the Company
`has established certain corporate collaborations to enhance and optimize the
`Company's development while maintaining substantial downstream product rights to
`potential products and offsetting a substantial portion of the financial risk of
`development of these product candidates. Most recently, during 1998 the Company
`established Lilly ICOS LLC ("Lilly ICOS"), a joint venture with Eli Lilly and
`Company ("Lilly"), to develop the small molecule product candidate known as
`IC351 for the treatment of sexual dysfunction. This is in addition to the
`Company's joint venture Suncos Corporation ("Suncos") established in 1997 with
`Suntory Limited of Japan ("Suntory") for the development of Pafase(TM) and a
`collaboration with Abbott Laboratories in the field of integrins and ICAMs. Each
`of these collaborations is described in more depth in the section entitled
`"Collaborations."
`
`
`
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`MonoSol 1017-0003
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`

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`
`Description of Programs
`- -----------------------
`
` Development Pipeline - Overview
`
`
`
`
`The clinical targets that are the subject of ICOS' discoveries include
`inflammation and other diseases whose pathology is a result of the dysfunction
`of the normal cellular mechanisms. The Company has discovered important
`molecules and mechanisms underlying directed cell adhesion, the inhibition of
`proinflammatory mediators and intracellular signal transduction. The chart
`below summarizes the programs with compounds currently in clinical development.
`
`
`
` ICOS Clinical Development Projects
` (Table 1)
`
`
`
`Product Candidate Indication Status (1)
`- ---------------------------------------------------------------------------------------------------------------
`
`
`LeukArrest(TM) Ischemic stroke Phase 3 clinical trial
` Hemorrhagic shock Phase 2 clinical trial
` Myocardial infarction Phase 2 clinical trial
` Multiple sclerosis, acute exacerbation Phase 2 clinical trial
`
`ICM3 Severe psoriasis Phase 1/2 clinical trial
`
`IC14 Severe sepsis Phase 1 clinical trial
`
`
`Pafase(TM) ARDS Phase 2 clinical trial
` Acute pancreatitis Phase 2 clinical trial
` Post-ERCP pancreatitis Phase 2 clinical trial
`
`IC351 Male erectile dysfunction Phase 2 clinical trial
`- ---------------------------------------------------------------------------------------------------------------
`
` (1) Status as of March 31, 1999
` Phase 1 clinical trial: safety and pharmacology, dose-determining drug
` regimen
` Phase 2 clinical trial: determination of dose levels and potential
` efficacy of drug
` Phase 3 clinical trial: efficacy and safety determination
`
`LeukArrest(TM)
`
` Background
`
`
`
`
`The migration of circulating leukocytes into extravascular tissues in the course
`of inflammation involves a complex series of events. A critical step involves
`the firm attachment of circulating leukocytes to the endothelial wall. The
`CD11/CD18 family of cell adhesion molecules found on leukocytes mediate this
`adhesive interaction. It is believed that by intervening in the adhesion
`process, much of the inflammation-associated damage can be prevented.
`Monoclonal antibodies directed to CD11/CD18 adhesion molecules have been shown
`to protect against leukocyte-mediated tissue injury by blocking adherence in a
`variety of disease models.
`
`LeukArrest(TM) is a recombinant humanized monoclonal antibody developed by ICOS
`to block CD11/CD18-mediated cell adhesion in humans. LeukArrest(TM) has been
`shown to bind to CD11/CD18 cell adhesion molecules on the surface of leukocytes
`and to block subsequent movement into the surrounding tissue. To date,
`approximately 850 subjects have been enrolled in clinical trials of
`LeukArrest(TM) investigating its use as a therapeutic for the treatment of
`ischemic stroke, hemorrhagic shock, myocardial infarction and multiple
`sclerosis. These trials are designed to gather safety, efficacy and
`pharmacological data to support further development of the program. ICOS is
`conducting clinical development of LeukArrest(TM) for the indications described
`below.
`
` Clinical Application - Ischemic Stroke
`
`
`
`
`During an ischemic stroke a blood vessel in the brain becomes blocked and blood
`flow to a region of the brain is reduced. This ischemia results in injury and
`death of the affected tissue. Although the stroke event arises from the
`blockage of one or more cerebral blood vessels by a blood clot, a significant
`portion of the tissue injury and death is thought to be caused by neutrophil-
`mediated inflammatory mechanisms. Restoring blood flow, oxygen and leukocytes,
`in particular neutrophils, to these tissues results in activation and adhesion
`of neutrophils to the endothelium. Once attached to the endothelial lining
`
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`MonoSol 1017-0004
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`these activated neutrophils release toxins, such as free radicals and proteases,
`that damage the endothelium and the surrounding tissue. Data from preclinical
`studies has indicated that LeukArrest(TM) inhibits neutrophil functions shown to
`be important for neutrophil-induced damage. The Company believes that treating
`patients who have suffered a stroke with LeukArrest(TM) may limit the degree of
`inflammatory tissue damage and protect significant amounts of brain and CNS
`tissue and, thus, may decrease the extent of brain damage for these patients.
`
`This molecule showed safety and efficacy in a randomized double-blind placebo
`controlled parallel study. Data from this study suggests that high dosages of
`LeukArrest(TM) improved neurological outcomes and exhibited a higher treatment
`response rate than did placebo. LeukArrest(TM) is currently being evaluating in
`a Phase 3 trial for ischemic stroke. This trial is designed to treat
`approximately 800 subjects in a randomized double-blind placebo controlled
`parallel study to evaluate its efficacy.
`
` Clinical Application - Hemorrhagic Shock
`
`
`
`
`Each year, approximately 150,000 Americans suffer major trauma and associated
`blood loss, leading to shock. Approximately 125,000 of these victims are at
`risk for the development of hemorrhagic shock. A major cause of morbidity and
`mortality in those who survive the initial injury is multiple organ dysfunction,
`for which there is no specific treatment. The intensive care necessary for the
`support of these patients is extremely expensive.
`
`Based on in vitro and in vivo data, it has been hypothesized that multiple organ
`dysfunction is the result of neutrophil-mediated tissue injury. Resuscitation
`of the trauma patient by medical staff administering intravenous fluids and
`blood products leads to the re-establishment of circulation in the affected
`tissues. Restoring blood flow, oxygen and leukocytes, in particular
`neutrophils, to these tissues results in activation and adhesion of neutrophils
`to the endothelium. Once attached to the endothelial lining these activated
`neutrophils release toxins, such as free radicals and proteases, that damage the
`endothelium and the surrounding tissue. The consequences of this include edema,
`hemorrhage and thrombosis that can often result in organ dysfunction and
`ultimately organ failure.
`
`Since the adhesion of neutrophils to endothelial cells is inhibited by
`LeukArrest(TM), ICOS believes that treatment of trauma-induced hemorrhagic shock
`patients with LeukArrest(TM) may prevent the development of multiple organ
`dysfunction and improve overall mortality rates.
`
`LeukArrest(TM) is being evaluated in a randomized double-blind placebo
`controlled parallel group Phase 2 study to evaluate LeukArrest(TM) for the
`treatment of severe tissue damage related to severe trauma. The trial is
`designed to evaluate the molecule's efficacy in reducing fluid requirements and
`organ failure in patients that have suffered massive blood loss due to traumatic
`injury. ICOS believes that blockage of leukocyte movement into tissues after re-
`establishment of fluid levels may prevent resulting tissue damage and resulting
`organ failure.
`
` Clinical Application - Myocardial Infarction ("MI")
`
`
`
`
`Each year, approximately 1.5 million myocardial infarctions occur in the United
`States, resulting in significant morbidity and mortality. During an MI, a
`coronary artery becomes blocked, impairing blood flow to a region of the heart
`and damaging surrounding tissue. A significant portion of the tissue injury and
`death is thought to be caused by neutrophil-mediated inflammatory mechanisms.
`Current treatment of MI is unable to protect at-risk tissue from this
`neutrophil-mediated damage.
`
` A
`
` common and serious complication of MI is the failure of the heart to pump
`blood adequately. Generally, the larger the amount of tissue damage, the less
`able the heart is to pump blood, resulting in congestive heart failure, which is
`the major cause of in-hospital mortality and disability following MI.
`
`Preclinical studies have provided evidence that LeukArrest(TM) inhibits
`neutrophil functions shown to be important for neutrophil damage in models of
`MI. ICOS believes that treating patients with LeukArrest(TM) during an MI may
`limit the degree of inflammatory tissue damage and protect significant amounts
`of heart tissue. In turn, this tissue preservation should help maintain the
`pumping capacity of the heart, thereby reducing mortality and disability.
`
`LeukArrest(TM) is currently being evaluated for its use in preventing tissue
`damage after myocardial infarction or heart attack, in an acute setting.
`Initially, the molecule's safety and pharmacology profile was tested in a
`randomized double-blind placebo controlled parallel Phase 2 study involving 60
`patients at 18 sites. Results of this initial study indicated that both
`
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`MonoSol 1017-0005
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`doses of LeukArrest(TM) were well tolerated. Based on these results, a Phase 2
`randomized double-blind placebo controlled parallel study was initiated and is
`currently underway.
`
` Clinical Application - Multiple Sclerosis ("MS") - Acute Exacerbation
`
`
`
`
`Multiple sclerosis is characterized by destruction of the myelin sheath
`(demyelination) surrounding the nerve cells in the central nervous system. This
`destruction leads to a variety of diverse neurologic deficits. It is believed
`that the demyelination process is associated with an inappropriate inflammatory
`response and subsequent migration of blood-borne leukocytes into the central
`nervous system where few leukocytes are normally found. Once in the central
`nervous system, these leukocytes are believed to damage the myelin sheath
`surrounding nerve cells.
`
`Current treatment for acute exacerbation of MS consists of systemic
`administration of corticosteroids, usually initiated as intravenous therapy for
`the first few days of the exacerbation, followed by a course of oral steroid
`therapy. Other approved treatments include two different forms of interferon-
`beta for treating relapsing remitting MS by reducing the frequency of acute
`attacks. Despite the medical advance represented by the approval of
`betainterferon, there remains a significant need for therapy to treat acute
`exacerbations of MS.
`
`LeukArrest(TM) may reduce the severity and length of recurrent MS exacerbations
`by interfering with the ability of leukocytes to bind to the vascular
`endothelium in the brain and spinal cord, thus limiting their movement into
`these tissues. Treatment of the acute exacerbation with LeukArrest(TM) may
`provide superior treatment outcomes to other treatment methods.
`
`During 1998, the Company completed a Phase 2 study evaluating a single dose of
`LeukArrest(TM) at two different dose levels for the treatment of acute
`exacerbations of multiple sclerosis. Results of this study indicated that
`LeukArrest(TM) did not show clinical benefit in comparison with
`methylprednisolone. Additionally, methylprednisolone had a benefit over all
`other groups when patients were evaluated on the basis of their neurological
`function. This trial did demonstrate that subjects treated with LeukArrest(TM)
`showed no difference in severe acute events or infection rates as compared to
`placebo. A Phase 2 study evaluating LeakArrest(TM) as a treatment for acute
`exacerbations of MS when given in a multiple dose regimen was concluded in late
`1998. Data from this trial is anticipated to be available during 1999.
`
`ICM3
`
` Background
`
`
`
`
`T-cell stimulation by antigen presenting cells is one of the early events in the
`immune response that leads to inflammation. ICAMs are cell surface proteins
`known to mediate the interaction between T-cells and antigen presenting cells.
`Known ICAMs include ICAM-1, ICAM-2 and ICAM-3. In comparison to the other
`ICAMs, the expression pattern of ICAM-3 has been shown by ICOS scientists to
`differ from the sites of expression on ICAM-1 and ICAM-2. Whereas ICAM-1 and
`ICAM-2 are primarily found on the surfaces of endothelial cells and activated
`leukocytes, ICAM-3 expression is normally restricted to leukocytes themselves.
`Because ICAM-3 is expressed at high levels independent of the state of cell
`activation, ICAM-3 is believed to be involved in the earliest stages of T-cell
`activation and is therefore an attractive target for early intervention to
`improve the outcome in T-cell-mediated inflammatory conditions. A proprietary
`series of anti-ICAM-3 antibodies developed by ICOS has been shown to inhibit T-
`cell activation. One antibody, known as ICM3, is a recombinant humanized
`monoclonal antibody that has been shown by ICOS scientists to block ICAM-3 and
`function as an inhibitor of T-cell activation in both in vitro and clinical
`models.
`
` Clinical Application - Psoriasis
`
`
`
`
`One common inflammatory disorder that involves T-cell stimulation is psoriasis.
`Approximately 20% of the five million Americans suffering from psoriasis have a
`moderate or severe form of the disease that is not responsive to topical
`therapy. ICOS is currently testing ICM3 in a series of Phase 2 studies of
`patients with moderate to severe psoriasis to evaluate the compound's safety and
`pharmacology. These 2 trials come at the conclusion of a Phase 1 study
`evaluating the molecule's use in treating patients with mild to severe
`psoriasis. The Phase 1 trial was designed as a single-dose trial of ICM3 to
`evaluate the molecule's safety and pharmacology.
`
`Crohn's disease has been selected as a second potential indication for ICM3 and
`Phase 1 clinical trials are now being planned.
`
`
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`MonoSol 1017-0006
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`IC14
`
` Background
`
`
`
`
`Immediately after exposure to bacteria, monocytes, granulocytes, and endothelial
`cells in human and animal tissues recognize and respond to the invading
`microorganisms in a non-adaptive or "innate" manner. This innate recognition of
`bacteria is mediated by CD14, a protein expressed on the surface of myeloid
`cells and present in plasma. In cases of localized infection, CD14 triggers a
`localized inflammatory cascade that promotes bacterial killing at the site of
`infection. However, in cases of systemic exposure to bacteria, CD14 triggers a
`systemic inflammatory cascade that may lead to potentially life-threatening
`conditions including the systemic inflammatory response syndrome ("SIRS"),
`septic shock, and multiple organ dysfunction syndrome ("MODS"). The pivotal
`role that CD14 plays in recognition and response to bacteria makes it an
`attractive target for potential therapeutic intervention in cases of suspected
`bacteremia and endotoxemia. IC14 is a monoclonal antibody that binds to CD14
`and blocks its interaction with bacterial endotoxins.
`
` Clinical Application - Severe Sepsis
`
`
`
`
`Bacterial recognition by CD14 and subsequent signal transduction through TLR-2
`triggers a vigorous response by myeloid and endothelial cells that promote
`bacterial killing at the site of infection. Once activated, these cells
`upregulate the expression of adhesion molecules on their surfaces and release a
`number of proinflammatory cytokines, lipid mediators, and coagulation factors.
`When confined to a local tissue site, this complex response functions to
`eliminate invading bacterial microorganisms. Unfortunately, however, the innate
`response that promotes bacterial killing in the setting of a localized infection
`can lead to catastrophic clinical manifestations in cases of bacteremia.
`
`Recent strategies to interfere with the innate systemic response to infection
`have targeted various proinflammatory mediators, as well as the Gram-negative
`bacterial envelope component LPS. To date, these strategies have met with
`limited success. For example, monoclonal antibodies and soluble receptors that
`target TNF-a have failed to reduce 28 day all cause mortality in pivotal
`clinical trials. Monoclonal antibodies targeting LPS have also failed. In
`retrospect, the failure of these strategies may not be entirely unexpected.
`Although the strategies mentioned target important components of the innate
`response, the components they target are redundant. For example, TNF-a is one
`of many proinflammatory mediators released by immune effector cells. Similarly,
`LPS is one of many bacterial envelope components capable of triggering the
`innate response.
`
`In contrast to other potential therapeutic targets, CD14 does not appear to be a
`redundant component of the innate response. Other proteins which recognize
`bacterial envelope components have been identified including bactericidal
`permeability increasing factor (BPI) and LPS binding protein (LBP). However,
`these proteins only recognize LPS. Macrophage scavenger receptors do exhibit
`specificity for a variety of bacterial components. However, these receptors do
`not participate in cell activation. In fact, CD14 is the only known receptor
`for bacterial envelope components that is capable of directly participating in
`cell activation and inflammatory mediator release. CD14 not only recognizes a
`diverse array of bacterial envelope components, it is directly involved in
`activation of multiple cell types including monocytes, macrophages,
`granulocytes, endothelial cells, epithelial cells, vascular smooth muscle cells,
`and astrocytes. CD14's diverse specificity for bacterial components, and its
`unique ability to trigger activation of multiple cell types, potentially make it
`an attractive target for blocking the innate systemic response to infection.
`IC14 has been shown to block these responses in both in vitro and in vivo
`models.
`
`In 1999, the Company announced the initiation of a Phase 1 clinical trial in
`healthy volunteers to evaluate the safety of IC14 in humans.
`
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`MonoSol 1017-0007
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`Pafase(TM)
`
` Background
`
`
`
`
`Platelet-activating factor ("PAF") is a potent proinflammatory mediator with
`diverse biological effects and is implicated in a number of debilitating
`inflammatory conditions, including ARDS, acute pancreatitis, asthma and
`necrotizing enterocolitis. It is produced naturally by a variety of human
`cells, including endothelial cells, leukocytes, platelets and mast cells. PAF
`affects a variety of cells that are involved in the inflammatory process,
`including leukocytes, platelets and vascular endothelial cells, and acts by
`binding to specific receptors, thereby increasing the inflammatory response.
`
`Platelet-activating factor acetylhydrolase is a naturally occurring enzyme that
`destroys PAF and eliminates its proinflammatory effects. ICOS is developing
`Pafase(TM), the recombinant form of PAF-AH, as an agent for the treatment of
`diseases characterized by increased PAF activity.
`
`In 1997, the Company formed Suncos to facilitate development and
`commercialization of Pafase(TM) for use worldwide. See "Collaborations."
`
` Clinical Application - Acute Respiratory Distress Syndrome ("ARDS")
`
`
`
`
`ARDS is a complication of acute lung inflammation associated with several
`clinical conditions, including acute pancreatitis, massive blood transfusion,
`septic shock, and trauma. There are approximately 650,000 persons at risk for
`developing ARDS each year in the United States and of these, approximately
`150,000 develop ARDS, for which the mortality rate is approximately 40-50%.
`Current therapy for ARDS is supportive.
`
`Pafase(TM) may be effective in patients at risk for ARDS or in improving the
`outcome in patients who have already been diagnosed with ARDS by inhibiting the
`ability of PAF to contribute to lung inflammation. In 1997 and early 1998, the
`Company evaluated Pafase(TM) in subjects with trauma and severe sepsis who were
`at risk to develop ARDS. The initial trial was designed to determine the safety,
`pharmacology and efficacy of Pafase(TM). Pafase(TM) proved to be well tolerated
`at all dose levels and patients who received Pafase(TM) showed improvement in
`several efficacy parameters compared to patients who received a placebo. As a
`result of the data from this trial, a Phase 2 clinical trial was initiated in
`1998 and is ongoing to further evaluate the safety and efficacy in subjects with
`trauma and severe sepsis who are at risk to develop ARDS.
`
` Clinical Application - Pancreatitis
`
`
`
`
`Each year, approximately 40,000 people in the United States suffer from acute
`pancreatitis. Currently, there is no specific therapy approved to treat this
`disease. PAF has been implicated as a mediator of acute pancreatitis. In
`preclinical models, Pafase(TM) has been demonstrated to reduce the severity of
`pancreatitis. A Phase 2 study of patients suffering from severe acute
`pancreatitis is planned to begin in 1999. This study will evaluate two dose
`levels of Pafase in comparison to placebo and is designed to measure Pafase's
`safety and efficacy and measure the compound's use to reduce the effects of
`pancreatitis.
`
`An additional Phase 2 safety and efficacy study is underway in patients at risk
`to develop acute pancreatitis after ERCP (endoscopic retrograde
`cholangiopancreatography). This randomized double-blind placebo controlled
`parallel study is designed to evaluate two dose levels of Pafase(TM) versus
`placebo in a single dose setting.
`
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`MonoSol 1017-0008
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`IC351
`
` Background
`
`
`
`
`Research over the past 15 years has led to a better understanding of how cells
`interact to coordinate the growth and maintenance of tissues in the human body.
`The key to this interaction is intracellular signal transduction -- the
`transmission of a signal from the exterior to the interior of a cell -- which
`results in the activation or suppression of specific genes or metabolic
`pathways.
`
`Physiologically, the concentrations of two second messenger molecules, cAMP and
`cGMP, influence a wide range of cellular functions. The intracellular
`concentration of cAMP and cGMP in the cell is generally controlled by the
`relative activity of two types of enzymes: Cyclases, which produce these second
`messengers,