Mexico becomes first country to approve H3 Pharma´s Sanvar® for esophageal variecal bleeding and four other indications

Montreal, Canada August 24, 2004– H3 Pharma Inc., a Montreal-based pharmaceutical product development company, announced today that the Mexican Health Authority has granted approval for Sanvar® IR (vapreotide) in the treatment of esophageal variceal bleeding (EVB) and four other indications – acromegaly, gastrointestinal fistulas, AIDS-related diarrhea and neuroendocrine tumors. Sanvar® IR, registered as Docrised® in Mexico, has been shown to greatly reduce active bleeding in EVB patients and to increase survival rates significantly. The decision in Mexico marks the first regulatory approval for Sanvar® IR in the world.

“This is a significant milestone in the commercialization of Sanvar and will make the drug accessible to patients in Mexico with a variety of life-threatening medical complications,” said Dr. Loïc Maurel, President and CEO of H3 Pharma. “Naturally we are pleased that the authorities in Mexico recognize the benefits and versatility of this drug. Mexico accounts for approximately 50,000 EVB patients, almost half of the entire Latin American somatostatin analog market, and is a great inroad to the rest of the region,” he added. “We are planning to sign a commercialization agreement with a partner to make this product available to the Mexican market as soon as possible,” Dr. Maurel concluded.

The approval in Mexico follows the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for Sanvar® IR in the acute treatment of EVB in February of this year. ” We hope to enter the U.S. market in 2005 and will have exclusivity for seven years due to Sanvar’s orphan drug status. Our team is also working with various regulatory authorities and pharmaceutical companies in other key markets to ensure that this drug is available to patients around the world as soon as possible,” said Dr. Maurel.

Sanvar® immediate release (IR) formulation is the only somatostatin analog to demonstrate benefits in the treatment of EVB in association with endoscopic therapy in a reliable clinical study (Cales et al. New England Journal of Medicine, 2001). Sanvar is also the only somatostatin analog that is stable at room temperature for extended periods of time. The global market for somatostatin is expected to reach US$1.1 billion by 2005.

In a Phase III clinical study conducted with 227 patients in 22 centres Sanvar® IR was shown to significantly reduce active bleeding. Survival with hemostasis at 5 days was achieved significantly (p=0.021) more often with Sanvar® IR than with placebo. In patients with control of bleeding at day 5, Sanvar® IR significantly (p=0.006) increased hemostasis and survival through day 42. Sanvar® IR will therefore be used valuably in association with endoscopic treatment to improve hemostasis in emergency in cirrhotic patients presenting variceal bleeding.

EVB is a complex medical emergency with a high mortality rate. It affects some 650,000 people in North America and Europe where it accounts for about 7% of episodes of gastrointestinal bleeding. This complication occurs in approximately 30% of patients with portal vein hypertension caused by cirrhotic liver disease.

About H3 Pharma
H3 Pharma is a pharmaceutical product development company that focuses on oncology and gastrointestinal diseases. Extensive internal expertise and world-renowned advisory panels allow H3 Pharma to effectively bridge the gap between innovative products and the global pharmaceutical marketplace. H3 Pharma licenses in the most promising therapeutic discoveries (post proof-of-concept in humans) and manages the clinical development, intellectual property, global registration and manufacturing logistics prior to out-licensing the products for global commercialization. H3 Pharma is an international joint venture between SGF, one of Canada’s largest venture funds, and Debiopharm S.A., a privately owned company based in Lausanne, Switzerland.

All of the statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which H3 Pharma does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements.