Remoxy is an oral, long-acting oxycodone gelatin capsule under development with Pain Therapeutics, to which we have licensed exclusive, worldwide, development and commercialization rights under a development and license agreement entered into in December 2002. Subsequently, pain Therapeutics has sublicensed the commercialization rights of Remoxy to King Pharmaceuticals. Remoxy is formulated with our ORADUR® technology and incorporates several abuse-deterrent properties with the convenience of twice-a-day dosing. Oxycodone is also the active drug ingredient in OxyContin®, a brand name extended-release oral painkiller, which achieved annual sales of approximately $1.6 billion in 2007. We will receive payments if certain development and regulatory milestones are achieved. We also receive reimbursement for our research and development efforts on Remoxy and a manufacturing profit on our supply of key product excipients for use in Remoxy. In addition, if Remoxy is commercialized, we will receive royalties for Remoxy of between 6.0% to 11.5% of net sales depending on the sales volumes.

Current Status

On June 10, 2008, a New Drug Application (NDA) for Remoxy was submitted to the U.S. Food and Drug Administration (FDA) by our licensee, Pain Therapeutics. The NDA has been accepted by the FDA and granted priority review.

In December 2008, Pain Therapeutics received a Complete Response Letter for the REMOXY NDA, in which the FDA determined that the NDA was not approved. According to Pain Therapeutics, the FDA indicated additional non-clinical data will be required to support the approval of REMOXY but FDA has not requested or recommended additional clinical efficacy studies prior to approval. Our understanding is that King Pharmaceuticals plans to meet with the FDA in mid-2009 which should provide our collaborators with a more reliable context in which to make projections about Remoxy.

Clinical Program

Pain Therapeutics began the first Phase III clinical trial for Remoxy in December 2004 and in September 2005 announced positive results from this trial.

In December 2007, it was announced that the pivotal Phase III trial for Remoxy had successfully met its primary endpoint (p<0.01) that was prospectively defined by the U.S. Food and Administration (FDA) during the Special Protocol Assessment process. In addition, the study achieved statistically significant results in secondary endpoints such as Quality of Analgesia (p<0.01) and Global Assessment (p<0.01).

This pivotal Phase III randomized, double-blinded, placebo-controlled, multi-center study was designed to evaluate the analgesic efficacy of twice-daily Remoxy versus placebo over a 12-week treatment period. The study randomized 412 male and female patients. All patients were diagnosed with osteoarthritis of the knee or hip, as evidenced by X-ray and clinical criteria of the American College of Rheumatology. Additionally, all patients had pain intensity scores corresponding to moderate-to-severe pain.

Following informed consent, wash-out and dose titration, patients were randomized (1:1) into a doubled-blinded treatment period (12 weeks). During treatment, patients received twice-daily Remoxy or matching placebo. The total drug dose per patient per day ranged from 10-80mg. Pain intensity scores were assessed on a Likert pain scale. Concomitant pain medications or rescue medications were not allowed at any point during the 12-week treatment period.

This Remoxy study received a Special Protocol Assessment (SPA) from the FDA. With an SPA, the study design, endpoints and statistical analyses needed to support approval were agreed upon by the FDA prior to initiating the study and are considered binding.

Pursuant to the SPA, the primary endpoint was defined as mean decrease in pain intensity scores between Remoxy and placebo during the 12-week treatment period. Top-line data indicated that the study achieved a statistically significant result in its primary endpoint (p<0.01). In addition, the study achieved statistically significant results in secondary endpoints such as Quality of Analgesia (p<0.01) and Global Assessment (p<0.01). No drug-related issues were noted in this study.