Thu May 25 10:27:19 2006 (CEPTYR, Inc.)

CEPTYR, Inc. Begins IND-Enabling Studies with Its PTP-1B Inhibitor for Type II Diabetes

BOTHELL, Wash.--(BUSINESS WIRE)--May 25, 2006--CEPTYR, Inc. today announced that it has formally selected a small molecule clinical candidate to begin IND-enabling studies for type II diabetes. The molecule, CPT633, is a potent inhibitor of PTP-1B, a highly validated target for type II diabetes and obesity. In preclinical rodent studies, CPT633 demonstrated significant improvement in insulin sensitivity, as well as significant reductions in blood glucose, and circulating levels of plasma insulin and leptin. CPT633 also demonstrated the ability to reduce the adiposity (epididymal fat pad mass) in treated mice, without inducing hypoglycemia. Following the successful completion of the remaining preclinical studies, CEPTYR expects to file the IND for CPT633 in the second quarter of 2007.

"We are excited about the potential for this novel molecule," said Stephen Malaska, General Counsel and Vice President of Business Development of CEPTYR. "CEPTYR's world-leading expertise in protein tyrosine phosphatases has lead to the discovery and development of this important first-in-class compound. We are focusing the company's resources on the goal of taking CPT633 into a Phase I clinical trial in 2007. CPT633 affects a broad range of biological parameters producing effects in mice that are very similar to those observed in PTP-1B knockout mice."

CEPTYR also announced today it has hired Cowan Alexander, LLC, www.cowanalexander.com to organize and hold an auction for surplus scientific equipment not needed for CEPTYR's ongoing operations. The auction will be held in mid-June.

About PTP-1B: PTP-1B is a protein tyrosine phosphatase enzyme that is an important negative regulator of insulin signaling and leptin signaling. In 2000, two of CEPTYR's scientific advisory board members, Drs. Barbara Kahn and Ben Neel of Beth Israel Deaconess Medical Center, published the phenotype of the PTP-1B knockout mice. The knockout mice were genetically altered so that the mice did not contain a functional PTP-1B gene. When fed a high-fat, high-calorie diet for long periods, the PTP-1B knockout mice displayed significantly heightened insulin sensitivity, were resistant to weight gain and maintained significantly lower glucose, insulin and leptin levels than normal mice on the same diet. These studies and additional characterization of PTP-1B has revealed it to be an important therapeutic target for type II diabetes.

About Type II Diabetes : Type 2 diabetes is the most common form of diabetes. In type 2 diabetes, either the body does not produce enough insulin or the cells ignore the insulin (often called insulin resistance). Insulin is necessary for the body to be able to use sugar. According to the American Diabetes Association, there are 20.8 million children and adults in the United States, or 7 percent of the population, who have diabetes. While an estimated 14.6 million have been diagnosed, unfortunately, 6.2 million people (or nearly one-third) are unaware that they have the disease. The total annual economic cost of diabetes in 2002 was estimated to be $132 billion and one out of every 10 health care dollars spent in the United States is spent on diabetes and its complications.

About CEPTYR: CEPTYR is a private biopharmaceutical company and a world leader in the field of protein tyrosine phosphatase enzymes (PTPs). CEPTYR is using its expertise in PTP science to develop pharmaceuticals that improve the lives of diabetes patients.

Statements in this news release made as of today are looking forward in time and represent our judgment as of the day of this release. We take no obligation to publicly update such information in the future. Readers are cautioned that forward-looking statements involve risks and uncertainties, including general economic conditions, delays and risks associated with the performance of contracts, uncertainties as a result of research and development, potential acquisitions, consumer and industry acceptance, litigation and/or court proceedings, and regulatory risks including approval of pending and/or contemplated regulatory filings.

Key(s): CEPTYR