H3 Pharma receives approvable letter from FDA for Sanvar® for esophageal variceal bleeding

Montreal, Canada January 4, 2005 – H3 Pharma Inc., a Montreal-based pharmaceutical product development company, announced today that it has received an approvable letter from the U.S. Food and Drug Administration (FDA) for Sanvar® IR (vapreotide) in the treatment of acute esophageal variceal bleeding (EVB) secondary to portal hypertension.

In the letter, the FDA requests additional supportive efficacy data on the product candidate and additional information related to manufacturing aspects of the product. H3 Pharma intends to address the issues raised by the FDA within the first quarter of 2005. Sanvar® IR (vapreotide)was approved by the Mexican Health Authority for this indication as well as four other indications, in August 2004.

“We are very pleased to have received this approvable letter from the FDA,” said Dr. Loïc Maurel, President and CEO of H3 Pharma. “Following the successful completion of our Phase III study in 2000, an additional confirmatory study was performed in Eastern Europe involving 280 patients. This study has just been completed and an analysis of the results will allow us to follow up with the FDA within a short timeframe,” he added.

Sanvar® immediate release (IR) formulation is the only somatostatin analog to demonstrate statistically significant benefits in the treatment of EVB in association with endoscopic therapy in a placebo controlled clinical study (Cales et al. New England Journal of Medicine, 2001). It is also the only somatostatin analog that is stable at room temperature for extended periods of time. Sanvar® has been granted orphan drug status in the United States, which will provide 7-years market exclusivity for the product in the U.S., once launched. The global market for somatostatin analogues is expected to reach US $1.1 billion this year.

The previous Phase III clinical study in France was 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 could therefore provide important incremental benefits compared to endoscopic treatment alone in achieving hemostasis in patients presenting with acute 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 endocrinology. 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 www.h3pharma.com.

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.