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ALANTOS BEGINS STUDY OF DIABETES DRUG

August 18, 2006

Alantos Pharmaceuticals has initiated a Phase I study of ALS 2-0426, an orally active, small-molecule inhibitor of Dipeptidyl Peptidase IV (DPP-IV) for the treatment of Type 2 diabetes.

Designed in two parts, the double-blind, placebo-controlled study will enroll approximately 50 healthy male volunteers in one center in the U.S. The first study uses a single, ascending oral dose and sequential cohort design and will be followed by a multiple-dose study also in healthy volunteers. The study will evaluate safety, tolerability, pharmacokinetics and pharmacodynamics of ALS 2-0426.

DPP-IV inactivates glucagon-like peptide-1, an important mediator of blood glucose levels following meals. DPP-IV inhibitors have been clinically shown to provide long-term improvement of glucose control without the risk of hypoglycemia, and to improve the function of pancreatic beta cells, the cells responsible for the production of insulin.