Novartis Pharma AG

Oral Salmon Calcitonin

Novartis is using our Eligen® drug delivery technology in combination with salmon calcitonin and human growth hormone. Their most advanced program utilizing the Company's Eligen® Technology is testing an oral formulation of calcitonin to treat osteoarthritis and osteoporosis. For osteoarthritis, Novartis completed one Phase III trial and a second Phase III clinical study is continuing. Novartis is also conducting a Phase III clinical study for osteoporosis. In its Media Release for the second quarter 2011, Novartis reported that its planned submission for oral calcitonin for the treatment of osteoporosis is scheduled to be filed with regulatory authorities during 2012.

Osteoporosis represents a large market, including 10 million managed patients and 34 million additional individuals at risk. An ideal treatment with an optimal efficacy/ safety/ convenience profile is not available, representing clear need that could be addressed by Emisphere's oral calcitonin product. Oral calcitonin could provide a safe, effective, and convenient alternative to existing therapies, which currently do not exist in the marketplace.

The market for treatment of osteoarthritis is also substantial, represented by 21 million managed patients. Earlier research indicates that oral calcitonin could become the first global disease-modifying drug for osteoarthritis.

Oral Recombinant Parathyroid Hormone 1-34

Recombinant PTH, currently approved for the treatment of osteoporosis, is available only by injection. On December 1, 2004, Emisphere entered into a Research Option and License Agreement with Novartis whereby Novartis obtained an option to license Emisphere's existing technology to develop oral forms of PTH 1-34. On March 7, 2006, Novartis exercised its option to the license. Parathyroid hormone continues to be on a progressive clinical development path in collaboration with Novartis Pharma AG.

In April, 2010 Emisphere announced that Novartis Pharma AG has initiated a second Phase I trial for an oral PTH1-34 which uses Emisphere's Eligen® Technology. The study is a partially blinded, placebo controlled, active comparator study to explore the safety, tolerability, pharmacokinetics and pharmacodynamics in postmenopausal women after daily oral doses of PTH1-34. The study has two parts (A and B) and will enroll a total of approximately up to 120 postmenopausal women. In Part A of the trial, ascending doses of oral PTH1-34 using the Eligen® Technology will be tested for safety, tolerability and pharmacokinetics and compared to Forsteo®. In Part B, in addition to safety and tolerability of oral PTH1-34 using the Eligen® Technology, pharmacodynamic responses will be measured by bone biomarker levels and bone mineral density, and compared to Forsteo®.

On May 1, 2006, Emisphere announced that Novartis would initiate the development of an oral rhGH product using the Company's Eligen® delivery technology. Under this agreement, Novartis has an exclusive worldwide license to develop, make, have made, use, and sell products developed under this program.

Oral Human Growth Hormone

Human Growth Hormone (hGH) is a protein hormone secreted from the anterior pituitary gland that stimulates tissue growth and is responsible for linear, skeletal, organ, and cell growth. In addition, hGH has salutary effects on metabolism of proteins, lipids, carbohydrates, and minerals and stimulates the synthesis of chondroitin sulfate and collagen.

From 1998 through August 2003, Emisphere developed oral recominant hGH (rhGH) in collaboration with Eli Lilly & Company. As of August 2003, Lilly returned to Emisphere all rights to the oral rhGH program pursuant to the terms of its license agreement. On September 23, 2004, Emisphere announced a new partnership with Novartis to develop its oral rhGH program. Under this collaboration, Emisphere is working with Novartis to initiate clinical trials of a convenient oral human growth hormone produce using the Eligen® Technology.

On May 1, 2006, Emisphere announced that Novartis would initiate the development of an oral rhGH product using the Company's Eligen® delivery technology. Under this agreement, Novartis has an exclusive worldwide license to develop, make, have made, use, and sell products developed under this program.