H3 Pharma Inc. Submits new drug application to FDA for Sanvar® IR

After in-licensing product only 8 months ago, Company Completes First NDA Submission

MONTREAL, CANADA, March 2, 2004 – H3 Pharma Inc., a Montreal-based pharmaceutical Product Development Company, today announced the submission of a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) in Washington DC for Sanvar® IR. The product candidate is a somatostatin analog in an immediate-release formulation to be used in acute treatment of esophageal variceal bleeding (EVB) to stop hemorrhage prior to endoscopic intervention and to prevent recurring bleeding during the critical five days following treatment. EVB is a life-threatening event with a high mortality rate that accounts for approximately 7% of episodes of gastrointestinal bleeding in North America and Europe and occurs in approximately 30% of patients with portal vein hypertension caused by cirrhotic liver disease induced by Hepatitis infection. The global market for somatostatin is expected to reach US$1.5 billion by 2005.

“I am very pleased that H3 Pharma has become one of the few companies in Quebec to submit an NDA and has been able to do so within the tight timeframe we had planned,” said Dr. Loïc Maurel, President and CEO of the Company. “The submission of this NDA moves us significantly closer to commercialization of this product candidate. We are now in active discussions with a number of pharmaceutical companies to conclude commercialization agreements in the key world markets of the Americas and Europe this year. The orphan-drug status we have received in the U.S.A. will give us exclusivity in that market for seven years following approval and we expect to enter the U.S. market in 2005,” he added.

“I want to thank our dedicated staff for their enormous efforts to move this product candidate forward quickly and I want to acknowledge the excellent work of the team at Debiopharm S.A. in Lausanne, Switzerland, who advanced the development work so effectively up until our in-licensing of the product last July,” said Dr Maurel.

Sustained-Release Formulation
Also Under Development in Other Indications
The Company is also developing a three-month sustained release (SR) formulation of Sanvar® for the management of life-long symptoms of carcinoid tumors and acromegaly for which it was granted orphan-drug designation by the FDA in November 2003. The sustained release formulation offers significant therapeutic advantages over other somatostatin analogues in the treatment of these diseases. Sanvar® has demonstrated positive effects on the clinical symptoms of Crohn’s disease as well, and further clinical development will begin this spring.

H3 Pharma plans to sign out-licensing agreements for all Sanvar® indications and formulations this year.

Sanvar® IR is the only somatostatin analog to demonstrate success versus placebo in the treatment of acute EVB, in a well powered and designed Phase III clinical study conducted in 227 patients in 22 centers. Sanvar® IR significantly reduced 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.

The Sanvar® IR formulation was submitted for registration in Mexico in December 2003. European submission is planned for late 2004.

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.