We are developing AQ4N as a tissue-targeted cytotoxic prodrug for the treatment of solid tumors. In April 2007, Novacea acquired worldwide development and commercialization rights for AQ4N from Kudos Pharmaceuticals Ltd., a wholly owned subsidiary of AstraZeneca, Ltd.

To date, data collected indicate that AQ4N is converted selectively to the drug’s active form, AQ4, a potent topoisomerase II inhibitor, within hypoxic, or oxygen-starved, tumor cells. Hypoxia is an important distinguishing characteristic of tumors that limits the effectiveness of radiation and chemotherapy treatments. We believe that AQ4N will be less likely to produce the systemic toxicity caused by most cytotoxic chemotherapies, since data suggests that it preferentially activates in hypoxic cells – and not in most normal tissues.

We have initiated a multicenter Phase1b/2a open-label clinical trial of AQ4N, in combination with radiotherapy and temozolomide, to evaluate safety, tolerability, and activity in patients with newly diagnosed glioblastoma multiforme (GBM).

Nearly 1.2 million patients are diagnosed with malignant tumors each year in the United States. The large majority of solid tumors have hypoxic components. According to the American Cancer Society, in 2005 there were approximately 18,500 new cases of solid tumors, resulting in 12,800 deaths from brain and other nervous system tumors in the United States. GBM is one of the most aggressive and rapidly progressing tumors for which few treatments are available. As a result, we believe that the FDA may allow us to pursue a more rapid development path.