Press Release: OrthoLogic Announces Results From Phase 3 Clinical Trial of Chrysalin

OrthoLogic Announces Results of Post Hoc Subgroup Analysis of Data From Phase 3 Clinical Trial of Chrysalin (TP508) in Fracture Repair SAN DIEGO, Feb. 16, 2007 -- OrthoLogic today announced findings of a post hoc subgroup analysis of data from its Phase 3 clinical trial of the novel synthetic peptide Chrysalin(R) (TP508) in unstable, displaced distal radius (wrist) fractures. Within the subset of female osteopenic subjects, treatment with 10 mcg Chrysalin demonstrated a statistically significant benefit compared to placebo in the primary efficacy endpoint of time to removal of immobilization. Secondary endpoints including clinical assessment of fracture healing (pain or motion at the fracture site), time to radial cortical bridging and time to overall radiographic healing also showed a significant effect of Chrysalin treatment. "We continue to learn more about the basic science, mechanism of action, biological activity and potential clinical utility of Chrysalin," said Randolph C. Steer, M.D., Ph.D., President of OrthoLogic. "This is among the largest clinical trials in fracture repair ever conducted, and the database we have built from the study has yielded some intriguing results. Our analysis of the data suggests Chrysalin may have an important effect on bone healing in osteopenic females, a potentially compromised population. These data are part of a post hoc subgroup analysis, and therefore provide only supporting - rather than pivotal - evidence of safety and efficacy. The data are potentially compelling and add important knowledge to the Chrysalin commercialization program." Amy Ladd, M.D., Professor of Orthopedic Surgery at Stanford University School of Medicine, will present the data today at the American Academy of Orthopaedic Surgeons 2007 Annual Meeting as a podium presentation entitled "Phase 3 Acceleration of Distal Radius Fracture Healing with a Thrombin Receptor Binding Peptide" (Paper No. 407). About the Study The study was a prospective, double-blind, randomized, placebo-controlled Phase 3 clinical trial designed to evaluate the safety of Chrysalin and its efficacy regarding the rate of healing in adult subjects with unstable and/or displaced distal radius fractures. Subjects were randomized to receive a single 1 mL percutaneous injection containing 10 mcg Chrysalin or placebo administered into the fracture site under fluoroscopic guidance. Five hundred three subjects were enrolled at 27 active centers in the United States. Subjects were evaluated post-surgery at weeks 1-8, 10, 12, 26 and 52. The primary efficacy endpoint was time to removal of all immobilization, defined as the elapsed time between the date of fracture surgery and the study visit at which the investigator, based on clinical and radiographic assessments of healing, removed all rigid immobilization hardware used to stabilize the fracture. Secondary efficacy endpoints included grip strength, range of motion, the PRWE (patient-rated wrist evaluation) outcome instrument score, the treating physician's radiographic assessment of cortical and trabecular bridging (time-to-heal based on the PA view), the treating physician's radiographic assessment of overall fracture healing, and the clinical assessment of fracture healing (pain or motion at the fracture site). Safety was measured as the proportion of subjects with treatment-emergent adverse events. About the Post Hoc Subgroup Analysis In this post hoc subgroup analysis, subjects were stratified by bone density score (T-score, determined by DXA scan) and grouped as normal, osteopenic, or osteoporotic. One hundred fifty seven female subjects were characterized as osteopenic. A statistically significant effect was observed with Chrysalin treatment in the primary endpoint, time to immobilization removal (p = 0.033). Another clinically relevant endpoint, time to clinical evaluation of healing, also showed a significant effect of Chrysalin treatment (p = 0.015). Radiographic evaluation of this osteopenic female population showed statistically significant differences between the Chrysalin-treated and placebo subjects for two of three radiographic parameters measured: time to radial cortical bridging (p = 0.022) and time to overall radiographic healing (p = 0.0028). About OrthoLogic OrthoLogic is a biotechnology company committed to developing a pipeline of novel therapeutic peptides and other molecules aimed at helping patients with under-served medical conditions. The Company is focused on the development and commercialization of two product platforms: Chrysalin(R) (TP508) and AZX100. Chrysalin, the Company's novel synthetic 23-amino acid peptide, is being studied in two lead indications, both of which represent areas of significant unmet medical need - fracture repair and diabetic foot ulcer healing. Based on the Company's pioneering scientific research of the natural healing cascade, OrthoLogic has become a leading company in bone and tissue repair. The Company owns exclusive worldwide rights to Chrysalin. AZX100 is a novel synthetic pre-clinical 24-amino acid peptide, one of a new class of compounds in the field of smooth muscle relaxation called Intracellular Actin Relaxing Molecules, or ICARMs(TM). AZX100 is currently being evaluated for commercially significant medical applications, such as the treatment of vasospasm associated with subarachnoid hemorrhage, the prevention of keloid scarring and the treatment of asthma. OrthoLogic has an exclusive worldwide license to AZX100. OrthoLogic's corporate office is in Tempe, Arizona. For more information, please visit the Company's website: Statements in this press release or otherwise attributable to OrthoLogic regarding our business that are not historical facts are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which include the timing and acceptability of FDA filings and the efficacy and marketability of potential products, involve risks and uncertainties that could cause actual results to differ materially from predicted results. These risks include: delays in obtaining or inability to obtain FDA, institutional review board or other regulatory approvals of pre-clinical or clinical testing; unfavorable outcomes in our pre-clinical and clinical testing; the development by others of competing technologies and therapeutics that may have greater efficacy or lower cost; delays in obtaining or inability to obtain FDA or other necessary regulatory approval of our products; our inability to successfully and cost effectively develop or outsource manufacturing and marketing of any products we are able to bring to market; changes in FDA or other regulations that affect our ability to obtain regulatory approval of our products, increase our manufacturing costs or limit our ability to market our products; our possible need for additional capital in the future to fund the continued development of our product candidates; and other factors discussed in our Form 10-K for the fiscal year ended December 31, 2005, and other documents we file with the Securities and Exchange Commission. 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