Aerial BioPharma Receives FDA Orphan Drug Designation for Narcolepsy Drug in Development

News Follows Successful Phase IIa Study Results

Aerial BioPharma Receives FDA Orphan Drug Designation for Narcolepsy Drug in Development

<0> Largemouth Communications (for Aerial)Scott Yates, 919-459-6452 </0>

Aerial BioPharma, a biopharmaceutical company focused on developing biologics and small molecules for conditions in the central nervous system, has received orphan drug designation for its narcolepsy drug in development.

The U.S. Food and Drug Administration (FDA) Office of Orphan Products Development granted orphan designation for ARL-N05 for the treatment of narcolepsy. In the United States, the prevalence of narcolepsy is estimated to be less than 200,000 qualifying as an orphan disease. The narcolepsy treatment will begin a Phase IIb clinical trial in September with results expected in mid-2013.

The news from the FDA follows the successful completion of a Phase IIa study where N05 demonstrated highly statistically significant results on the primary and secondary efficacy endpoints in patients with narcolepsy. “In June, we received positive efficacy and safety data from the Phase IIa trial that show promise for controlling the symptoms of narcolepsy,” said Chief Executive Officer Moise Khayrallah, Ph.D. “Our approach is to rapidly bring innovative drugs to market to improve patients’ lives. Achieving the orphan drug status is a key milestone and another testament to the team’s expertise in identifying and rapidly developing drug candidates with a high probability of success and a clear regulatory path to approval.”

Aerial completed the first tranche of a $12 million equity financing in April 2012 and expects to complete the second tranche of funding soon. In addition to completing the Phase IIb study for N05, the company will use the funding to further its early stage biologic licensed from the University of North Carolina at Chapel Hill that is being developed for the treatment of acute and chronic pain.

Aerial is the third company from the management team led by Dr. Khayrallah, all privately held and located in North Carolina’s Research Triangle Park region. Previously, the team founded Addrenex Pharmaceuticals, which was acquired by Shionogi Pharma in November 2009 through a $29 million transaction. Addrenex investors received multiple returns on their investment in less than three years.

In February 2012, the team’s second company, Neuronex, announced the signing of a merger agreement with Acorda Therapeutics. The merger, once completed, will result in full acquisition by Acorda, and potential payments to Neuronex equity holders of over $100 million.

Aerial BioPharma is a privately-held biopharmaceutical company focused on developing biologics and small molecules for conditions in the central nervous system. Aerial is based in Morrisville, N.C., on the edge of Research Triangle Park. For more information, visit