Saegis Pharmaceuticals Receives $2 Million Investment from the Stanley Medical Research Institute

HALF MOON BAY, Calif.--(BUSINESS WIRE)--Jan. 28, 2004--

Agreement Funds Initiation of Human Trials for Third Saegis Compound With Promise in Cognitive Impairment

“We are impressed with SGS518's potential to address the serious cognitive impairment in schizophrenia”

Saegis Pharmaceuticals, Inc., a privately held biopharmaceutical company focused on developing medicines that protect and enhance the function of the human mind, today announced that The Stanley Medical Research Institute will invest $2 million in the company, in exchange for Series B Preferred Stock, to help fund the initiation of human clinical trials of SGS518, a novel small molecule that has exhibited safety and activity in improving learning and memory in extensive pre-clinical research. Saegis will study the compound as a treatment for the cognitive decline that occurs in schizophrenia.

"The Stanley Medical Research Institute is the largest private provider of research support for schizophrenia in the United States," said Rodney Pearlman, Ph.D., president and CEO of Saegis Pharmaceuticals. "As such, their significant investment not only validates the potential of SGS518 but also recognizes the ability of Saegis to pursue its clinical development efficiently. SGS518 will be the third compound in our portfolio to enter human clinical trials."

"We are impressed with SGS518's potential to address the serious cognitive impairment in schizophrenia," said Dr. Michael Knable, executive director of The Stanley Medical Research Institute.

Saegis is developing SGS518 in cooperation with Eli Lilly and Company to treat diseases related to cognitive impairment, including cognitive impairment associated with schizophrenia (CIAS). Under the terms of an exclusive license with Lilly, Saegis is responsible for the design and execution of a clinical development program for this compound.

Cognitive impairment associated with schizophrenia (CIAS) is recognized as a major determinant of disability in schizophrenia and remains a significant unmet medical need within the overall management of the disease. Schizophrenia is thought to affect 1-2 percent of the population, with approximately 2 million people diagnosed with the disease in the United States. It represents the second fastest growing therapeutic area in the central nervous system category, generating $7.7 billion in sales in 2001.

About the Stanley Medical Research Institute

The Stanley Medical Research Institute is a nonprofit organization that supports research on the causes and treatment of schizophrenia and bipolar disorder (manic-depressive illness) through research in their own laboratories and through support of researchers worldwide. Since 1989, when their research programs began, The Stanley Medical Research Institute has provided over $160 million to make this research possible. For more information, visit www.stanleyresearch.org.

About Saegis Pharmaceuticals

Founded in 1999, Saegis Pharmaceuticals is a pioneer in the development of medicines that protect and enhance the function of the human mind. Through licensing activity, development partnerships, and internal discovery programs, Saegis Pharmaceuticals is building a portfolio of compounds with activity against a range of disorders of the brain and central nervous system, including Alzheimer's disease, mild cognitive impairment, and cognitive impairment associated with schizophrenia. Currently the Company has three orally available small molecule compounds in clinical development, two of which have already demonstrated efficacy and safety in humans. These development activities are also supported by investments in Saegis Pharmaceuticals by Versant Ventures, Technology Partners, Sofinnova Ventures (U.S.), Sofinnova Partners (Paris), Polaris Venture Partners, and NeuroVentures. For more information, visit www.saegispharma.com.