GlaxoSmithKline (GSK) and Santaris Pharma Enter Global R&D Alliance

GlaxoSmithKline (GSK) and Santaris Pharma Enter Global R&D Alliance; Santaris Could Receive in Excess of $700 Million Upfront

Wednesday December 19, 2007, London, UK & Copenhagen, Denmark -- GlaxoSmithKline (GSK) and Santaris Pharma today announced that they have entered into a worldwide strategic alliance for the discovery, development and commercialisation of novel medicines against viral diseases. The collaboration provides GSK access to patented RNA antagonist compounds, based on Santaris Pharma’s unique Locked Nucleic Acid technology, for development as potential new therapies for selected viral diseases.

GlaxoSmithKline will participate in the alliance through its Infectious Diseases Centre of Excellence for Drug Discovery (ID CEDD). Under the terms of the agreement, Santaris Pharma will grant GlaxoSmithKline options to drug candidates discovered and developed under the collaboration in up to four different viral disease programmes. In each of these R&D programmes, Santaris Pharma will be responsible for the discovery and development of RNA antagonist drug candidates through to completion of Phase IIa (“Clinical Proof of Concept”), at which point GlaxoSmithKline has an exclusive option to license each compound for further development and commercialisation on a worldwide basis. GSK also has an option to include as an additional programme in the collaboration, SPC3649, Santaris Pharma’s preclinical LNA-antimiR against microRNA-122, which is being developed by Santaris Pharma as a potential new therapy for Hepatitis C infection.

Santaris Pharma will receive an upfront fee for the first antiviral program of $3m (£1.5m) and GSK will make an equity investment of $5m (£2.5m) in Santaris Pharma. If candidate drugs from the first viral target programme are successful and reach the market, GSK could make additional milestone payments to Santaris Pharma of up to $140m (£69.5m) for this first programme. Similar upfront payments and milestones are payable by GSK to Santaris Pharma in respect of each of the further 3 antiviral programmes if GSK elects to initiate these additional programmes in the collaboration. In addition, if GSK exercises its option to further develop and commercialise SPC3649, it will make a further up front payment of $5m (£2.5m) and additional milestones of up to $122m (£60.5m) if the drug obtains regulatory approvals in Europe and the USA. Overall, under the collaboration Santaris Pharma could be eligible to receive in excess of $700m (£347m) in upfront fees and development and regulatory milestones payments. If a product is successfully commercialised, Santaris Pharma will receive high single to double-digit royalties on worldwide sales of alliance products.

Announcing the collaboration, Dr Henrik Ørum, Santaris Pharma’s Chief Scientific Officer and VP Business Development commented: ”We are delighted that GlaxoSmithKline has chosen to collaborate with Santaris Pharma in the RNA medicines field. We are confident that the high potency and exquisite precision of RNA targeting achievable by LNA oligonucleotides has the potential to achieve clinical breakthroughs in viral infections. I can think of no stronger partner for Santaris Pharma in infectious disease research than GSK.”

Dr Zhi Hong, Senior Vice President and Head of GlaxoSmithKline’s ID CEDD said: “The Locked Nucleic Acid technology platform developed by Santaris Pharma has the potential to transform Gene Interference therapies. We are facing numerous challenges in infectious disease areas where tractable targets are limiting. Innovative medicines with unprecedented mechanisms of action are lacking. This alliance has the ability to accelerate our drug discovery programmes against multiple infectious disease targets”.

Santaris Pharma Forward-Looking Statements This written announcement contains forward-looking statements, identified by the use of words such as "believes," "expects," "may," "will," "should", "potential," "anticipates," "plans" or "intends" and similar expressions. Such forward-looking statements involve risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from the future results, events or developments indicated in this announcement. Such factors include, but are not limited to the timing, success and cost of clinical studies; the ability to obtain regulatory approval of products, market acceptance of and future demand for Santaris Pharma products and the impact of competitive products and pricing. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. No assurance can be given that the future results covered by the forwardlooking statements will be achieved. All information in this press release is as of the date of this press release and Santaris Pharma does not intend to update this information.

Santaris Pharma Enquiries: Corporate Communications Randi Krogsgaard, Director, Direct phone +45 45179879 e-mail: rmk@Santaris.com [1] Business Development, Henrik Ørum, CSO & VP Tel: 45179859 E-mail: hoe@Santaris.com [2]

GlaxoSmithKline Enquiries: UK Media enquiries: Pauline Page 01438 764521 Philip Thomson (020) 8047 5502 Alice Hunt (020) 8047 5502 Joss Mathieson (020) 8047 5502 Claire Brough (020) 8047 5502 US Media enquiries: Nancy Pekarek (215) 751 7709 Mary Anne Rhyne (919) 483 2839 European Analyst/Investor enquiries: David Mawdsley (020) 8047 5564 Sally Ferguson (020) 8047 5543 US Analyst/ Investor enquiries: Frank Murdolo (215) 751 7002 Tom Curry (215) 751 5419

About Santaris Pharma Santaris Pharma is a Danish based clinical-stage biopharmaceutical company. The company was formed in 2003 and currently employs more than 85 people. Santaris Pharma has the exclusive rights to LNA technology, a 3rd generation antisense chemistry used to develop new classes of RNA medicines, called RNA Antagonists and microRNA antagonists. Santaris Pharmas microRNA Antagonists are targeted against tissue specific microRNAs associated with cancer and metabolic disorders. Santaris Pharma completed a Euro 40m second round of equity financing in May 2006 and a Euro 20m third round of equity financing in December 2007. Santaris Pharma has a global partnership with Enzon Pharmaceuticals of New Jersey to co-develop and commercialise a series of Santaris Pharma RNA Antagonists for improving the treatment of cancer.

About Santaris Pharma’s Locked Nucleic Acid technology LNA is an analogue of RNA (ribonucleic acid). The conformation of the ribose sugar in LNA is ‘locked’ in the RNA shape by virtue of its rigid bicyclic structure. The result is that when incorporated into oligonucleotides, LNA conveys dramatically enhanced binding affinity to complementary RNA sequences. Each monomer unit of LNA incorporated into a DNA oligonucleotide increases binding affinity by approximately ten-fold. Drug molecules with multiple LNA substitutions therefore have truly outstanding potencies. The greater potency of LNA in binding complementary RNA sequences means that LNA oligonucleotide drugs can be made significantly shorter than previous antisense or siRNA drugs. These shorter, smaller size drugs are taken up rapidly by cells and tissues, thereby overcoming many of the delivery problems of RNAi to date. In addition to greater potency than other oligonucleotide chemistries, LNA drugs are resistant to degradation when given systemically, have long tissue half lives, are taken up readily by many tissues, and have improved therapeutic ratios over first and second generation antisense drugs.

About GlaxoSmithKline GlaxoSmithKline – one of the world’s leading research-based pharmaceutical and healthcare companies – is committed to improving the quality of human life by enabling people to do more, feel better and live longer.

About the ID CEDD The Infectious Diseases Centre of Excellence for Drug Discovery is a global research unit within GlaxoSmithKline Drug Discovery dedicated to discovering therapies for infectious diseases including bacterial, viral and diseases of the developing world such as TB and Malaria. It is designed to integrate and better coordinate the progression of infectious diseases medicines from therapeutic hypothesis to clinical proof of concept. It focuses on building an innovative pipeline through both internal efforts and external alliances with other companies and research institutions and will focus on 'virtualizing' a portion of the infectious diseases pipeline by forming multiple risksharing/ reward-sharing alliances.