Emisphere's Oral Acyclovir Program
Emisphere’s eligen^® technology has been used to improve the absorption and bioavailability in humans of small molecules. As a result of these successes, Emisphere has initiated a program to develop an improved oral formulation of the antiviral compound, acyclovir, while using less of the drug.

Acyclovir alone is poorly and irreproducibility absorbed when dosed orally. The published bioavailability is between 10 and 20%. Prodrug forms of acyclovir such as Valacyclovir (GSK’s Valtrex^®) have bioavailabilities that are improved by a factor of three to five-fold.

Emisphere has generated preclinical data which show that the eligen^® technology can increase the bioavailability of acyclovir by a factor of five. The Company has entered into a research collaboration with a pharmaceutical company based outside the United States. This company is funding a clinical study to support product development of oral acyclovir using the eligen^® technology. Emisphere is responsible for preclinical studies necessary to support the human trials. These studies have been completed and the partner is preparing to initiate clinical studies later this year. As part of a pre-IND discussion held with FDA, Emisphere inquired as to the possibility of using a 505(b)(2) pathway for registration of an acyclovir product using the Emisphere technology. FDA agreed that the 505(b)(2) registration strategy for acyclovir using the eligen^® technology may be acceptable.

Market Opportunity / Expansion
According to the U.S. Centers for Disease Control and Prevention as of May 2004, 45 million people in the United States ages 12 and older, or 1 out of 5 of the total adolescent and adult population, are infected with HSV-2. It is more common in blacks than in whites, and more likely to infect women than men. Compared to 20 years ago, it’s about five times more common in 12- to 19-year-old whites and twice as common in adults ages 20 to 29.

Nationwide, since the late 1970s, the number of people with genital herpes infection has increased 30 percent, the largest increase occurring in young teens. HSV-2 infection is more common in three of the youngest age groups which include people aged 12 to 39 years.

The global annual sales of the top three Herpes drugs for 2004 were approximately $1.2 billion.

About Acyclovir
Acyclovir is one of the most common treatments for the treatment of genital herpes. Genital herpes is an infection caused by the herpes simplex virus or HSV. HSV is a lifelong infection that is incurable. Many patients suffer from recurrent outbreaks provoked by various environmental and patient specific factors.