Annual Report 2007 In Detail

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(1)WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Annual Report 2007 In Detail.

(2) WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Content.

(3) Marketed Products . 04. Summary of Achievements Tracleer® Ventavis® Zavesca® . 05 06 08 08. Research & Development . 10. Drug Discovery Drug Discovery Platforms Therapeutic Areas Clinical Development . 11 11 12 18. 03. Our Strategy . 27. 04. Business Development . 29. 05. Financial Report . 32. Corporate Governance Consolidated Financial Statements Holding Company Statements . 37 49 78. 02. 03. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. 01.

(4) WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. 01 Marketed Products.

(5) Actelion continued its strong performance in 2007 and further built its leadership position in pulmonary arterial hypertension (PAH) with Tracleer® (bosentan) sales of CHF 1,18 billion, a growth of 31% compared to the previous year (+32% in local currencies). This strong performance was seen in all regions worldwide, including the United States, Europe, and Japan in particular. It was also the first full year of marketing Ventavis® (iloprost) after the acquisition of CoTherix in the United States. In an increasingly competitive PAH market, Ventavis® was able to contribute CHF 78.2 million to our PAH franchise revenues. These excellent results are particularly remarkable considering that new competition entered the market in 2007 within the class of endothelin receptor antagonists (sitaxentan in the European Union and ambrisentan in the United States). Actelion’s in-depth knowledge of the PAH market, together with our highly professional and determined worldwide marketing and sales force, continued medical education activities, and further geographical expansion, were the basis for maintaining leadership and further growth. Actelion further strengthened the profile of its flagship brand, Tracleer®. In 2007, we submitted an application in the US and Europe to expand the indication of Tracleer® for patients with PAH in WHO Functional Class II* (FC II), based on the conclusive results of the EARLY study – the only study investigating the effects of a PAH therapy specifically in a FC II patient group. With EARLY, Tracleer® has shown a significant effect on delaying time to clinical worsening, a measure of disease progression, in three separate randomized controlled trials. The positive results of the double-blind, placebo-controlled, multi-national BENEFIT trial – which investigated the effects of Tracleer® in a patient population outside of WHO group I*, namely patients with chronic thromboembolic pulmonary hypertension (CTEPH) – further proved to the value of Tracleer® for patients. In June 2007, the EMEA granted approval in the European Union for an expansion of the indication of Tracleer® for reducing the number of new digital ulcers in patients suffering from systemic sclerosis and ongoing digital ulcer disease. Digital ulcers are a serious and very debilitating consequence of this disease.. Actelion’s strong commitment to expand Tracleer® into new indications is demonstrated by the comprehensive clinical trial program, including the COMPASS trials (combination therapy), BUILD 3 (idiopathic pulmonary fibrosis) and FUTURE (pediatric indication). Several marketing and life cycle activities were initiated for Ventavis® in 2007 to enhance its profile and set it up for continued success in 2008. Zavesca® (miglustat), Actelion’s second global brand, generated sales of CHF 35.3 million, a growth of 39% compared to the previous year. Increased awareness and acceptance of the value of Zavesca® for patients suffering from Type 1 Gaucher disease are the basis for future market share growth. New data published in 2007 confirmed the positive effects of Zavesca® on Gaucher disease related bone manifestations, and bone pain in particular, strengthening the competitive profile of the brand. The submission for an expansion of the indication to patients suffering from Niemann-Pick Type C disease is still under review by the European regulatory authorities.. Actelion currently markets the following products: Product. Indication(s). Status. Commercialization rights. Tracleer®. Pulmonary arterial hypertension. marketed. Actelion. Prevention of digital ulcers in patients with systemic sclerosis. registered(1). Actelion. Prevention of digital ulcers in patients with systemic sclerosis. in registration(2). Actelion. Ventavis®. Pulmonary arterial hypertension. marketed. Actelion(3). Zavesca®. Type 1 Gaucher disease. marketed. Actelion(4). (1) Only in the EU (2) A product is said to be "in registration" when it has completed Phase III clinical trials and its developer is in discussion with the relevant regulatory authorities relating to the filing of a new drug application for the product. (3) Only in the USA. (4) Except Israel, the West Bank and Gaza Strip.. * WHO clinical classification of pulmonary hypertension group diseases sharing similarities. PAH is WHO group 1. Group 1 comprises the following classifications: I. Patients with pulmonary hypertension in whom there is no limitation of usual physical activity II. Patients with pulmonary hypertension who have mild limitation of physical activity III. Patients with pulmonary hypertension who have a marked limitation of physical activity IV. Patients with pulmonary hypertension who are unable to perform any physical activity at rest and who may have signs of right ventricular failure.. Annual Report 2007 - Marketed Products. 05. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Summary of achievements.

(6) Actelion’s lead product is Tracleer®, the first and only dual endothelin receptor antagonist. Tracleer® was the first oral treatment approved for pulmonary arterial hypertension (PAH), a rare, chronic, life-threatening disorder that severely compromises the functions of the lungs and heart. Today, Tracleer® has been approved for the treatment of PAH in more than 30 countries, including the United States in November 2001, the European Union in May 2002, and Japan in April 2005. We currently market Tracleer® in all major markets worldwide – including the United States, the European Union, Japan, Switzerland, Canada, Australia, and China. Actelion received an orphan drug designation for Tracleer® in PAH for jurisdictions including the European Union, the United States, Japan, and Australia. In addition to the indication in PAH, based on compelling clinical data, Tracleer® received approval from the European regulatory authorities in 2007 for the reduction in the number of new digital ulcers in patients suffering from systemic sclerosis and ongoing digital ulcer disease.. Indications Tracleer® in pulmonary arterial hypertension Pulmonary hypertension, or high blood pressure in the cardiopulmonary system, is a simplified name for a complex health problem. Pulmonary hypertension is a disease affecting people of all ages and ethnic background, seriously impacting the quality of life and life expectancy of patients. Pulmonary hypertension may result from any of a number of primary diseases. It can also arise idiopathically, that is, without a medically understood cause. The World Health Organization (WHO) classifies five different forms of pulmonary hypertension. These five forms differ in both their causes and their precise effects. Tracleer® is currently indicated for the WHO group 1 classification of pulmonary arterial hypertension (PAH). An estimated 100,000 to 200,000 patients worldwide currently suffer from this disease. Chronic and life-threatening, PAH is characterized by abnormally high blood pressure in the arteries between the heart and lungs. It may arise in an idiopathic primary form or in secondary forms related to conditions or tissue disorders that affect the lungs, such as scleroderma, lupus, HIV/AIDS or congenital heart disease. PAH begins when small vessels that supply blood to the lungs constrict and make it more difficult for blood to reach the lungs. As a result, the heart has to pump harder. Over time, fibrosis – the scarring of blood ves-. 06. Marketed Products. sels – makes the vessels stiffer and thicker, and some may become completely blocked. This increased stress causes the heart to enlarge and become less flexible. As the cycle continues, less and less blood is able to flow out of the heart, through the lungs and into the body, which causes additional severe symptoms to appear. Heart and lung functions are severely compromised in PAH patients, resulting in limited exercise capacity and, ultimately, a reduced life expectancy. The first signs of PAH – such as dyspnea (shortness of breath), fatigue and difficulty exercising – are subtle. As a result, the disease is often either misdiagnosed or not diagnosed at all until a patient's condition is advanced. According to a 1991 study by D'Alonzo (et al) in the Annals of Internal Medicine, if the disease is left untreated, 45 to 60% of PAH patients die within two years of diagnosis. Prior to the availability of Tracleer®, the main treatment alternatives for early-stage PAH were vasodilators – such as calcium channel blockers, which cause blood vessels to expand, and oral anti-coagulants, which reduce blood clotting. These therapies are able to relieve some of the symptoms of PAH, but do not work in all patients. As the disease progressed, many patients were forced to turn to prostacyclin therapy, which required a 24-hour infusion pump and an intravenous line implanted through the chest to deliver the drug directly into the patient's pulmonary vein. This treatment is associated with a number of quality-of-life and safety limitations. Ultimately, many patients would require lung or heart-lung transplantation; this is costly and severely limited due to the lack of suitable donor organs. Tracleer® was approved on the basis of two Phase III clinical trials and is a twice-a-day oral formulation offering effective treatment for most moderate to severe PAH patients. It has been shown to significantly delay disease progression, improve exercise capacity and increases the patient's ability to perform daily activities without shortness of breath. It also improves quality of life, in some cases placing the patient in a less severe diagnostic class. In a number of patients, Tracleer® may stabilize the disease, and like any pharmaceutical product, it may be ineffective for others.. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Tracleer®.

(7) Additional clinical trials with Tracleer® in PAH. Additional clinical trials have been conducted in PAH patients to increase the information about the use of Tracleer® in various conditions and help treating physicians to manage patients appropriately. These trials are briefly summarized in the table below: Study name. Target patient population. Main result. BREATHE 2. Patient at epoprostenol initiation. Tracleer® further improved cardiac hemodynamic when used in association with i.v. epoprostenol.. BREATHE 3. Children. This study has defined the pharmacokinetics of bosentan in children.. BREATHE 4. PAH related to HIV in HIV positive patients. Tracleer® improved exercise capacity and cardiac hemodynamics.. BREATHE 5. PAH related to congenital heart defects with Eisenmenger syndrome. Tracleer® was shown to be safe in this population and improved both cardiac hemodynamics and exercise capacity.. EARLY. PAH patients in WHO Functional Class II (early stage of the disease). Tracleer® improved cardiac hemodynamics and delayed the time to clinical worsening. A trend towards an improvement in exercise capacity was also shown in this study.. ii. Use of bosentan with sildenafil: the COMPASS clinical trial program Additional trials are currently being conducted with Tracleer® in the field of PAH to demonstrate that it needs to be part of all PAH treatment, either alone or in combination with other drugs. The COMPASS program evaluates specifically the efficacy and safety of the use of bosentan in combination with sildenafil – an approved and effective treatment for PAH but one that addresses another pathological pathway of the disease.. The COMPASS 2 study, which evaluates the effect of Tracleer®, when given in combination with sildenafil, on morbidity and mortality in a group of patients followed for up to three years. The results will be available sometime in 2010. Tracleer® in digital ulcers in scleroderma patients Systemic sclerosis (SSc) is a chronic autoimmune disease characterized by progressive fibrosis with deposition of collagen in the skin and internal organs. This uncontrolled fibrotic process leads to occlusion of the small vessels in the body which may result in the development of PAH as indicated above but also in the development of digital ulcers (DUs). DUs are very painful and result in difficult-to-heal open sores that occur on fingers and toes, leaving depressed scars. They also have a negative impact on the ability to work or perform daily activities. In severe cases, infection can complicate the course of the ulcer, sometimes leading to bone infection and gangrene, where surgery and even amputation may be required. Endothelin is involved in this pathological process, and the evaluation of the benefit of Tracleer® as an endothelin receptor antagonist in this indication was granted. These potential benefits were tested in two placebo controlled trials (RAPIDS 1 and RAPIDS 2) in patients with systemic sclerosis and digital ulcers. In the two studies, Tracleer® prevented the occurrence of new digital ulcers and contributed to improving the patients’ quality of life. The two RAPIDS studies confirm the properties of Tracleer® as a dual endothelin receptor antagonist that prevents the remodeling of the vessels – the main and common pathological process leading to PAH and the formation of digital ulcers. In June 2007, the European Commission granted marketing approval for Tracleer® for the reduction of the number of new digital ulcers in patients with systemic sclerosis and ongoing digital ulcer disease. As of the end of 2007, regulatory proceedings to extend the label of Tracleer® to include digital ulcerations are ongoing worldwide.. The COMPASS program includes two main trials: The COMPASS 1 study completed in 2007, the results of which are summarized below: Study name. Target patient population. Main result. COMPASS 1. Patients on chronic bosentan for PAH. Sildenafil showed a positive effect on cardiac hemodynamics when added to patients on chronic Tracleer®.. Marketed Products. 07. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. i..

(8) Tracleer® continued strong growth in 2007, confirming its market leadership position in PAH. Its sales of CHF 1.18 billion represent a growth of 31% over the previous year. This strong performance of our flagship product is attributed to two main factors: Actelion’s commitment to investigating the potential benefits of Tracleer® – in new disease conditions and indications where there is a high unmet medical need – continues to generate strong and unmatched clinical data that represent the fundamental position of Tracleer® as the undisputed cornerstone of therapy Our world class specialized and experienced marketing and sales force has been strengthened and expanded to deal with the increasing awareness and attention in the medical community and to ensure a continued leading share of voice in the market place. In addition, we are also creating the potential for future growth by expanding into new markets in Latin America, Eastern Europe and Asia.. Ventavis® Ventavis® (iloprost) – the only inhalable PAH therapy on the market – was approved by the FDA in the United States at the end of 2004. Actelion gained the licensing rights to market Ventavis® in the United States through the acquisition of the US company, CoTherix Inc., at the end of 2006. 2007 marks the first year of marketing Ventavis® and a strong performance with sales of CHF 78.2 million represent a substantial addition to our PAH franchise. Ventavis® is an inhaled formulation of iloprost, a synthetic compound that is structurally similar to prostacyclins – naturally occurring molecules that cause blood vessels to dilate. Iloprost is a synthetic analogue of prostacyclin PGI2 that dilates systemic and pulmonary arterial vascular beds. It also affects platelet aggregation, although the relevance of this effect to the treatment of pulmonary hypertension is unknown. In controlled trials, Ventavis® improved a composite endpoint consisting of exercise tolerance, symptoms (NYHA Class), and lack of deterioration. In March 2005, top line data of the Phase II clinical trial, STEP – evaluating the safety and added benefit of using Ventavis® Inhalation Solution therapy in patients with PAH already undergoing treatment with bosentan – were published.. 08. Marketed Products. The analysis of this study showed that the combination of Ventavis® and bosentan therapy was well tolerated, was consistent with the safety profile observed in patients receiving only iloprost, and provided clinical benefit in patients with PAH. Ventavis® is indicated for the treatment of pulmonary arterial hypertension (WHO Group I) in patients with NYHA Class III or IV symptoms. Ventavis® is supported in the United States, as part of our PAH franchise by the marketing and sales force, for the treatment of patients suffering from this devastating disease. Parallel to our marketing and sales efforts, we are running several initiatives to further improve the convenience of using Ventavis®, such as optimizing the cleaning protocol of the inhalation device and reducing inhalation time.. Zavesca® Zavesca® (miglustat), currently the only approved oral treatment for Type 1 Gaucher disease – a rare and debilitating metabolic disorder – is used in patients for whom enzyme replacement therapy is unsuitable. In November 2002, Actelion in-licensed miglustat, the active ingredient of Zavesca®, from Oxford GlycoSciences (UK) Ltd. Market introduction in the European Union began in March 2003, followed by the United States in January 2004. In November 2005, we entered an agreement with UCB S.A., the legal successor to Oxford GlycoSciences. Under this agreement, Actelion is assigned all of UCB S.A’s rights and obligations regarding miglustat, including worldwide marketing rights, except in Israel, the West Bank and Gaza Strip. Geographical expansion to Australia, where we achieved marketing approval during the year is further increasing the commercial potential of Zavesca®. There are approximately 7,000 patients with Type 1 Gaucher disease in the EU and the USA, of whom about 3,000 receive enzyme replacement therapy. Based on clinical data with Zavesca® in another life threatening lysosomal storage disease, Niemann-Pick Type C, Actelion filed for marketing authorization in the European Union for an expansion of the Zavesca® label. Assessment of the application by the European Regulatory Authority is ongoing. This is another area of high unmet medical need: there is currently no therapeutic option available for patients suffering from this debilitating condition, which often affects young children.. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Tracleer® in the market.

(9) Indications. Zavesca® in the market. Zavesca® in Gaucher disease (Type 1) Gaucher disease is an inherited metabolic disorder caused by a genetic mutation. In Gaucher disease, the patient’s body is unable to produce sufficient amounts of glucocerebrosidase, an enzyme that metabolizes a lipid or fatty substance called glucosylceramide. Because the body cannot properly metabolize this lipid, harmful quantities accumulate in the spleen, liver, lungs, bone marrow, and, in rare cases, the brain.. Zavesca® continues to grow steadily and achieved sales of CHF 35.3 million in 2007 – a growth of 39% compared to previous year. In addition, we were able to significantly increase our share in several markets.. Three phenotypes, or clinical forms, of Gaucher disease are commonly recognized. The first phenotype, Type 1, is nonneuronopathic, and by far the most common. Patients in this group usually bruise easily and experience fatigue due to anaemia and low blood platelet count. They also suffer from liver and spleen enlargement, bone disease manifestations and, in some instances, lung and kidney impairment. Before the introduction of Zavesca®, the only treatment for this debilitating disease was intravenous enzyme replacement therapy. With Zavesca®, patients with Gaucher disease have access to an additional treatment option. It has been shown to reduce the organomegaly induced by the accumulation of glycosylceramide.. Since the molecule appears to penetrate deep in tissues, it has been hypothezised to have a more significant effect on bone disease. Recently presented and published data have confirmed the positive effect of Zavesca® on Gaucher disease related bone manifestations and bone pain, in particular. This data confirms the beneficial effects of Zavesca® for Gaucher Type 1 patients and could help to further increase market share. Another key to future market penetration is the Zavesca® MAINTENANCE study. This evaluates whether patients with Type 1 Gaucher disease, who are treated with enzyme replacement therapy, remain stable after switching to Zavesca®.. Zavesca® provides a therapeutic approach to controlling the overall level of glucosylceramide by reducing its generation. The goal of therapy with Zavesca® is to regulate the rate of synthesis of glucosylceramide to a level that allows its further degradation by the residual glucocerebrosidase activity.. Marketed Products. 09. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. We received an orphan drug designation for Zavesca® in Type 1 Gaucher disease in the European Union and the United States..

(10) WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. 02 Research and Development.

(11) Over the past 10 years, Actelion’s efforts in drug discovery have focused on developing platforms of expertise. This focus allows high productivity in the generation of innovative compounds potentially addressing a wide range of highly unmet medical needs. The first focus is the design, synthesis and optimization of small molecular weight drug-like molecules. The productivity of our endeavors is demonstrated with more than 1,000 pending patent applications and/or granted patents currently in Actelion’s portfolio. In 2007, the company filed 28 priority patent applications. Actelion also focuses on the choice of its molecular target families. Initially, the company looked solely at G-protein coupled receptors (GPCR’s) and aspartic proteinases. In recent years, several other target areas have been progressively added. One example is the ion channel blocker platform. Another is the anti-infective’s platform acquired after the integration of a research group specialized in innovative anti-infective research. Actelion endeavors to follow innovation where it leads, as evidenced by the fact that from a few target platforms, Actelion’s compounds have found or might find applications in multiple disease areas, such as cardiovascular or immunology. In 2007, we expanded our research efforts by adding a dedicated oncology unit to evaluate all our ongoing efforts for further potential applications in the field of cancer. To maximize output from our focus on target families, we use the appropriate state-of-the-art technologies. We combine technology with human expertise on how to make the best use of our toolbox. We have over 100 medicinal and process chemists creating our low molecular weight compounds. For example, Actelion scientists have access to the rational input of computer-assisted molecular modeling. In 2007, we have solved 12 highly complex three-dimensional structures of proteins from different projects. This, in turn, has provided a basis for designing a multitude of molecules that our molecular biologists and biochemists then characterize in relation to the chosen targets, for which they develop a variety of assays and execute screens. In 2007, over one million assay results were generated, managed and analyzed by our Oracle-based data-warrior programs, built inhouse.. The lead is then passed to our pharmacologists, neurobiologists, immunologists and electro-physiologists to further characterize the compounds. These lead compounds are then passed back through this cycle until an optimized compound is available for pre-clinical development by our pharmacokineticists, galenicists and toxicologists. This platform approach, combined with our technologic capabilities and in-house expertise, has resulted in the selection of a number of valuable compounds for pre-clinical investigations. The final outcome is a robust clinical development pipeline filled with compounds discovered and optimized in Actelion’s laboratories.. Drug discovery platforms New chemical entities (NCE) Our research focuses on the design and synthesis of novel low-molecular-weight, drug-like molecules. Experience has shown that small molecules generally lend themselves to easier formulation, have a broader array of dosage forms, have greater potential for bioavailability, in particular after oral administration, and are more efficiently manufactured. While our medicinal chemistry and parallel chemistry groups synthesize smaller quantities of structurally diverse molecules, our process research chemists prepare the quantities of selected compounds needed for further studies.. G-Protein coupled receptors G-Protein coupled receptors (GPCR's), also described as seven transmembrane domain receptors (7TM's), are integral membrane proteins. They can be activated by external signals, such as hormones, neurotransmitters or odors. This activation induces a conformational change of the receptor which in turn causes activation of G-proteins and the subsequent transmission of biochemical signals within the cell. There are more than 100 known GPCR's in humans and many of them are involved in a broad array of diseases. Some of these receptors are the subject of our development programs, such as the endothelin receptors ETA and ETB, orexin receptors OX1 and OX2, or the sphingosine-1-phosphate receptor S1P1.. Annual Report 2007 - Research and Development. 11. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Drug Discovery.

(12) Aspartic proteinases are a class of enzymes that promote chemical reactions in and outside of cells. To perform their function, aspartic proteinases use an arrangement of two aspartic acids in order to activate a water molecule that acts as a chemical “scissor”. There are more than 50 known aspartic proteinases, of which at least nine are currently known to exist in humans. Although knowledge of their precise physiological roles is still emerging, they have been implicated in cancer, as well as in inflammatory, degenerative and cardiovascular diseases. In addition, aspartic proteinases play a vital role in organisms that cause infections, including parasites, fungi and retroviruses such as HIV.. Anti-infectives In early 2004, Actelion initiated a research program in the field of antibiotics. Due to the development of resistance to currently available antibiotics and the emergence of new pathogens, the medical need for new antibiotic compounds is high. Our program is focused on the discovery of novel classes of antibiotics that may offer improved properties, such as increased potency, coverage of multi-resistant infections and a decreased inherent liability for resistance development. A portfolio of projects has been established focusing on both antibiotics for intravenous treatment of severe hospital infections and oral antibiotics for community acquired infections. We currently have one compound in full pre-clinical development and are in the optimization phase for several other compounds.. Ion channels Ion channels are transmembrane pores that allow the passage of ions (charged molecules) into or out of a cell. There are hundreds of different ion channels and they are distinguished based upon ion selectivity, opening mechanism, and protein sequence. Ion channels can be opened by chemical ligands, voltage fluctuations, acidity changes, temperature variations, or mechanical stimuli (e.g. touch or sound). In mid-2004, Actelion established an in-house in-vitro electrophysiology group. This was primarily to provide internal support for early pre-clinical evaluation of drug safety in the area of cardiac electrophysiology.. 12. Research and Development. However, since the scientific knowledge and technical capabilities required in this area are very similar to those in the area of cardiovascular ion channel therapies, research programs were soon initiated looking for modulators of selected ion channels to treat cardiovascular diseases. In 2007, further development of the electrophysiology group led to the initiation of research projects targeting ion channels to treat neurological and immunological diseases.. Therapeutic areas Cardiovascular disorders Cardiovascular disorders encompass all complaints where there is a disturbance in the function of the heart or blood vessels. Cardiovascular disease is one of the leading causes of death in industrialized countries, a fact which is also expected to become the case in developing countries. Our focus i.. Endothelial system. The endothelium is an organ consisting of a single layer of cells between the blood stream and the blood vessel wall. The main functions of the endothelium include: - maintenance of blood vessel tone, which is critical for regulating blood pressure levels and - prevention of blood clots forming on the vessel wall by providing a non-adhesive surface. The endothelium produces and secretes two important vasoactive molecules, endothelin and nitric oxide, that work in opposition. Nitric oxide dilates blood vessels, prevents platelet adhesion and inhibits cell proliferation. Endothelin, however, is a powerful blood vessel constrictor that also promotes cell proliferation. In a normal, healthy state, the body maintains a balance between nitric oxide and endothelin. In contrast, in certain disease states endothelin is produced in excess. In addition to causing vasoconstriction – the narrowing of blood vessels – excessive endothelin can: - stiffen blood vessels and tissues by promoting fibrosis, the accumulation of connective tissue. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Aspartic proteinases.

(13) Endothelin binds to two types of receptors found on the blood vessel walls and in tissues: ETA receptors, which are found predominantly in smooth muscle cells in the blood vessels, and ETB receptors, which are also found in connective tissue cells, neuronal cells, endothelial cells and hormoneproducing cells. The activation of the endothelin system plays a critical role in chronic cardiovascular diseases, such as pulmonary hypertension, and in acute cardiovascular conditions, such as right heart failure and cerebral vasospasm – a constriction of blood vessels in the brain following subarachnoid hemorrhage. It is also implicated in connective tissue diseases such as scleroderma and pulmonary fibrosis. Endothelin levels have been shown to correlate with disease severity. Among our products are oral and intravenous dual ETA-ETB antagonists and an intravenous selective ETA antagonist for cerebral vasospasm that block the consequences of excessive endothelin. Disorders of the endothelial system 1. Pulmonary arterial hypertension Pulmonary arterial hypertension (PAH) is a serious disease of the arteries connecting the lungs to the heart (the pulmonary arteries). Under normal conditions, the right side of the heart (the right atrium and right ventricle) pumps venous blood through the lungs, so the blood can pick up oxygen. When PAH develops, blood flow through the pulmonary arteries is restricted and the right side of the heart is put under increasing strain to pump blood through to the lungs. 2. Chronic obstructive thromboembolic pulmonary hypertension Chronic obstructive thromboembolic pulmonary hypertension (CTEPH) is caused by obstruction of the pulmonary arteries by organized persistent thrombi leading to increased pulmonary vascular resistance, progressive pulmonary hypertension and ultimately right-heart failure. Pulmonary endarterectomy (PEA) is the preferred treatment for CTEPH in suitable patients. Nevertheless, up to half of all CTEPH patients cannot undergo surgery due to the nature of the disease and the location of the thrombi. For patients with inoperable CTEPH, there are currently no approved therapies available.. 3. Digital ulcers in systemic sclerosis Systemic sclerosis (SSc) is a chronic autoimmune connective tissue disease characterized by excessive collagen deposition in the skin and internal organs, such as the gastrointestinal tract, kidney, heart and lungs. Symptoms result from vascular dysfunction, inflammation and progressive fibrosis, which lead to occlusion of the microvasculature. As a result of the vascular injury, complications such as pulmonary arterial hypertension (approximately 100,000 to 200,000 PAH patients worldwide) and digital ulcers (approximately 5,000 severe cases every year worldwide) can occur. About 50% of systemic sclerosis patients suffer from digital ulcers (DUs) at least once in their disease history. DUs are very painful and result in difficult-to-heal open sores that occur on fingers and toes. They leave depressed scars and adversely impact the ability to perform work and perform daily activities, particularly those associated with fingertip functions. In severe cases, infection can become a complication, leading to osteomyelitis and gangrene, where surgery and even amputation may be required. DUs are caused by a reduction in the lumen of small blood vessels (obliterative vasculopathy as observed in the lung in PAH) that diminishes the blood flow to the fingers and toes. Endothelin, a pathogenic mediator, is implicated in vascular damage in SSc. In addition to causing vasoconstriction, endothelin also has direct deleterious effects, which cause fibrosis, vascular hypertrophy, and inflammation. 4. Idiopathic pulmonary fibrosis Pulmonary fibrosis is a progressive and usually fatal disease that may arise idiopathically or in association with underlying diseases like systemic sclerosis. It is estimated there are around 60,000 patients worldwide with idiopathic pulmonary fibrosis (IPF). In IPF, fibrosis destroys both the structure and the function of the respiratory system. Endothelin has direct pro-fibrotic and pro-inflammatory effects. Since endothelin concentrations are strongly elevated in interstitial lung disease, there is evidence implicating endothelin in these diseases as well. For patients with IPF, there are currently no approved therapies available. 5. Vasospasm as a consequence of aneurysmal subarachnoid hemorrhage Aneurysmal subarachnoid hemorrhage (aSAH) is a life-threatening condition affecting over 80,000 people in the EU, US and Japan every year.. Research and Development. 13. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. - cause vascular remodeling, a change in the vessels' shape, vascular hypertrophy, an increase in the thickness of blood vessel walls and cardiac hypertrophy and - predispose the vessels to inflammation..

(14) 6. Right ventricular failure (RVF) Cardiopulmonary bypass (CPB) is commonly used in heart surgery because of the difficulty of operating on a beating heart. Operations requiring the chambers of the heart to be opened require the use of CPB to support circulation during that period. The level of endothelin (ET), one of the strongest vasoconstrictors currently known, increases during and after CPB. Increased ET is associated with pulmonary hypertension (PH) and right ventricular failure (RVF). Actelion’s efforts in this indication focus particularly on RVF during separation from cardiopulmonary bypass (CPB). Patients with left heart diseases, such as mitral and aortic valve disease, often have pulmonary hypertension that may be acutely exacerbated during weaning from CPB, greatly increasing the risk of right ventricular failure. In 2003, 200,000 heart valve procedures with open-heart surgery took place globally. These are expected to rise due to an aging population and improved surgical techniques.. The overproduction of angiotensin II produces a range of deleterious effects. Disorders of this system are a major factor in high blood pressure, heart disease and kidney failure. Drugs that block the renin-angiotensin II system comprise an important category of cardiovascular drugs used today. These drugs – angiotensin II converting enzyme (ACE) inhibitors, and angiotensin II receptor blockers, or ARBs – are established drugs for high blood pressure, kidney disease and heart failure and are among the most commercially successful classes of pharmaceuticals. A compensatory increase in other enzymes, such as chymase, can bypass the effects of an ACE inhibitor; furthermore, ARBs do not block all angiotensin II receptors. Therefore, it is predicted that an orally active renin inhibitor may provide a more specific and a more complete inhibition of the renin-angiotensin II system than either an ACE inhibitor or an ARB alone.. Central nervous system (CNS) Central nervous system or brain diseases (psychiatric, neurological and neurosurgical disorders) figure among the leading causes of disease and disability. Recent WHO data suggests that brain disorders cause 35% of the burden of all diseases in Europe. Of patients in primary care, 25% are affected by a neuropsychiatric disease – such as mood disorders (depression, anxiety), psychotic conditions (schizophrenia, mania), declined cognitive function (Alzheimer and neurodegenerative diseases) or brain trauma (stroke, brain or spine lesion). Brain disorders are substantially more costly to society than other important fields in medicine such as heart disease, cancer and diabetes.. 7. Endothelial system related oncology Endothelin receptors and endothelin are expressed in several tumor types, such as melanoma on tumor cells and stromal cells. They also contribute to invasion and metastasis. Our endothelin antagonists are therefore being explored for application in cancer therapy. For more information on Actelion’s oncology strategy, please refer to the oncology therapeutic area.. The brain, a very sophisticated and complex organ, cannot easily be investigated as a separate organ and this has impacted the development of neurological and psychiatric treatments. However, dramatic advances in CNS research over the last two decades, enables the development of truly innovative treatments today.. ii. Renin angiotensin system. i. Sleep and sleep disorders. The critical enzyme renin is produced in the kidney, where it serves as gatekeeper to the biochemical cascade that ultimately results in production of the hormone angiotensin II. Under normal conditions, the kidney controls blood volume, blood pressure and the electrolyte composition of body fluids through the tightly regulated production of renin and therefore of angiotensin II.. It is widely acknowledged that a lack of sleep can have a significant negative impact on daily functioning, physical and mental health. There are four main categories of sleep disorder: hypersomnia, circadian rhythm disorders, parasomnias, and insomnia. Insomnia is, worldwide, the most commonly reported sleep disorder and is estimated to affect up to one third of the adult population.. 14. Research and Development. Our focus. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. This condition can occur when the rupture of an aneurysm on the cerebral vessels leads to release of blood into the subarachnoid space of the brain. Intravascular coiling or surgical clipping is usually required to stop the bleeding and prevent further episodes. Vasospasm (uncontrollable tightening) of the brain blood vessels is a feared complication after aSAH, because a shortage of blood supply to the brain can lead to cerebral ischemia and infarction. Vasospasm is unpredictable in nature and seen in over 67% of untreated patients with angiography at the time of maximum spasm around the end of the first week. It becomes symptomatic in about half of these patients. Currently, there is no effective treatment for the prevention and treatment of the severe complications following vasospasm..

(15) Most products on the market enhance the effects of GABA, the major inhibitory neurotransmitter in the central nervous system. Such medications suffer from a major trade-off: the greater the efficacy, the greater the "hangover" effect the next day in terms of impaired mental and physical performance. Usually, sedatives decrease the length of the REM (rapid eye movement) sleep phase, which – together with non-REM sleep – is hypothesized to be important for memory consolidation.. the public health sector. Some of those diseases like multiple sclerosis, psoriasis or type-1 diabetes are characterized by an aberrant attack of the body's own tissue by T cells. The prevalence rates for allergic asthma has risen in the last 40 years from below 0.5% in the late 1960s to 3.5% in 2000, and from almost 0% to over 8% for allergic rhinitis in a study from Finland. The trend for increase is observed throughout the developed world and is even steeper in developing countries. Our focus. ii. Alzheimer’s disease Alzheimer’s disease is a form of senile dementia, a progressive neurodegenerative disease. There is a great deal of variation in the progression of the disease from patient to patient. Early symptoms can be missed easily because they resemble the natural signs of aging or can result from fatigue, grief, depression, illness or alcohol. Since the prevalence of neurodegenerative diseases, such as Alzheimer’s disease, increases with age, these diseases are likely to become commonplace due to the aging population and will thus become a greater burden on family, care-givers and on health care services in general. 1. Bace-1 inhibition BACE-1 (beta amyloid converting enzyme; or betasecretase) is an important target for development of a drug therapy for Alzheimer's disease. It is hypothesized that inhibition of BACE-1 will prevent the formation of amyloid plaques, protein fragments that accumulate in the brains of Alzheimer's patients. If so, a BACE-1 inhibitor may prove effective in preventing and treating Alzheimer's disease.. Immunology Autoimmune diseases and allergies are characterized by an inappropriate response of the immune system to either the body's own tissue or to environmental antigens. An estimated 5 to 8% of the Northern American population is affected by autoimmune diseases, underscoring their importance in. i. S1P system The adaptive immune system relies on constant circulation of lymphocytes between lymphoid organs and other tissues of the body. After maturation, lymphocytes leave the bone marrow or thymus, enter the circulation, and travel via the blood and the lymphatic system, surveying for antigens that they recognize. In the secondary lymphoid organs, which include lymph nodes, Peyer's patches, and the spleen, naïve lymphocytes encounter antigen-presenting cells and may be activated. Once activated, T cells must leave the lymph node to reach target tissues, whereas B cells can secrete antibodies without leaving the secondary lymphoid organs. Circulation of lymphocytes between blood, lymphatic system, and nonlymphoid tissues is tightly regulated, and it has recently been shown that the lysophospholipid sphingosine-1-phosphate (S1P) plays a central role in lymphocyte trafficking. S1P is abundantly synthesized and secreted by many cell types, including erythrocytes, platelets and mast cells, and elicits a variety of physiological responses. The concentration of S1P is low within the lymph node interior but very high in the adjacent draining lymphatic vessels. These two compartments are separated by lymphatic endothelium. Lymphocytes are able to sense a concentration gradient of S1P and migrate towards the higher S1P concentration. The migration of lymphocytes out of secondary lymphoid organs is dependent on the S1P1 receptor. Sphingosine-1-phospate (S1P) is a phospholipid released by platelets, mast and other cells. It is currently established that S1P stimulates at least five different G-protein coupled receptors (GPCR’s): S1P1,2,3,4, and 5. Activation of these GPCR’s mediates a complex variety of biological responses, such as lymphocyte migration, endothelial cell proliferation, blood vessel constriction, heart rate modulation and others. Actelion's efforts in the field of selective S1P1 receptor agonists started in 1999 by focusing on receptors found on the endothelium, the inner lining of blood vessels.. Research and Development. 15. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. 1. The orexin system Our research team is targeting the G-Protein coupled receptor’s (GPCR’s) that mediate the actions of orexins. Orexins are neuropeptide hormones produced in specific regions of the brain to regulate appetite and alertness. For example, genetic defects of the orexin peptides, or their receptors, are associated with certain inherited sleep disorders. Orexins have been further associated with increased appetite and increased physical activity in experimental animals. Orexins may also play a role in other conditions..

(16) 1. S1P1 agonists In the presence of an S1P1 receptor agonist, lymphocytes lose their ability to sense S1P concentration gradients. As a consequence, S1P1 receptor agonists block lymphocyte migration out of lymphoid tissue into the lymphatic and vascular circulation, thereby reducing peripheral lymphocyte counts and preventing lymphocyte recruitment to sites of inflammation. This new strategy for therapeutic immunomodulation offers potential advantages over existing therapies. Sequestration of T cells in lymphoid organs are expected to prevent the processes that contribute to inflammatory diseases – such as tissue invasion, local cytokine release, macrophage recruitment, and direct cell killing – while sparing functions that do not rely on homing mechanisms, such as antibody generation by B lymphocytes, first line immunological protection by neutrophils and monocytes, and antigen-dependent T cell activation and expansion.. life expectancy around the world in the past century. Yet drug-resistant pathogens have been on the rise in the recent decades. Resistance may be due to exclusion, efflux, inactivation of the drug or modification of the cellular target. Increasingly, infections that were once treatable with antibiotics are becoming difficult or impossible to treat. The ISDA estimated that in 2004, two million people acquired bacterial infections while in hospital and about 90,000 patients died as a result. About 70% of these infections were due to resistant or multiple-resistant (MDR) pathogens. Our focus Actelion’s research focuses on new targets with proven antibacterial activity, and new chemical scaffolds with new mechanism of action. It aims at combining two pharmacophores into one molecule, thus addressing multiple targets in parallel. We believe that this strategy offers the potential benefits of no cross-resistance with established classes, a low propensity to develop resistance, and a broad spectrum.. ii. Allergy An allergy is a unique type of an immune reaction. Normally, the immune system responds to foreign microorganisms or particles by producing specific proteins called antibodies. These antibodies are capable of binding to specific sites, or antigens, on the foreign particle. The recognition between antibody and antigen sets off a series of chemical reactions designed to protect the body from infection. Sometimes, the production of antibodies is triggered by harmless, everyday substances such as pollen, dust, and animal dander. When this occurs, an allergy may develop against the offending substance (which is then called an allergen).. Genetic disorders Genetic disorders are chronically debilitating, sometimes lifethreatening diseases with a low prevalence and a high level of complexity and heterogeneity. There are many high unmet medical needs in the field of genetic disorders, with only few disease-modifying drugs available. These rare disorders call for a global approach on special and combined efforts to prevent significant morbidity or avoidable premature mortality, and to improve quality of life of those affected. Our focus. Infectious diseases Infectious diseases are the second leading cause of mortality causing about 20% of global deaths according to the World Health Report 2003. Among these, respiratory and other bacterial infections account for four million deaths each year; tuberculosis is responsible for another 1.5 million fatalities. Antibiotics have saved millions of lives since their introduction in the 1940s and contributed much to the increase of. 16. Research and Development. i. Type 1 Gaucher disease Gaucher disease is the most common disease among all inherited glycosphingolipid storage disorders, affecting approximately 7,000 patients worldwide. It is an inherited autosomal recessive disorder caused by the accumulation of glucosylceramide in the lysosomes of monocyte-derived macrophages (Gaucher cells), in tissues of the reticuloendothelial system, due to the reduced activity of lysosomal ß-glucocerebrosidase. Accumulation of glucosylceramide in Kuppfer cells in the liver and in splenic macrophages is associated with enlargement of the corresponding organs. Splenomegaly and bone marrow infiltration by Gaucher cells lead to progressive anemia and thrombocytopenia. Accumulation of glucosylceramide in bone marrow is associated. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Not all patients respond to current therapies and the majority of patients do not achieve disease control. This combined with inconvenient administration forms and side effects amounts to a high unmet medical need where a new approach is needed. Actelion’s research targets allergy-specific processes with a focus on regulation of specific immune cells..

(17) with osteopenia, lytic lesions, chronic pain, acute episodes of ”bone crisis”, bone infarcts, and osteonecrosis. Overall, Gaucher disease is a multi-system disease with under-diagnosed bone manifestations – in particular, reduced bone mineral density and bone pain, resulting in long-term disability. Current treatments for Type 1 Gaucher disease include enzyme replacement therapy (imiglucerase, Cerezyme®) and substrate reduction therapy (miglustat, Zavesca®). Palliative treatments include analgesics, antibiotics and bisphosphonates. ii. Niemann-Pick disease Type C Niemann-Pick disease Type C (NPC) is a rare, fatal, degenerative, genetic condition primarily affecting children and teenagers, but which can strike at any age. There are approximately 900 NPC patients worldwide. The neurological symptoms of NPC are caused by the accumulation of glycosphingolipids in neurons, secondary to abnormal lipid trafficking. It is relentlessly progressive and most patients die within five to ten years of diagnosis. Neurological deterioration is a key feature of the disease, and can manifest itself as clumsy body movements, balance problems, slow and slurred speech, swallowing difficulty, eye movement problems and seizures. Intellectual decline is common. In the final stages of the disease, the child or young adult is frequently bedridden, has little muscle control and is intellectually impaired. There is currently no specific treatment option for this condition.. transported properly to the plasma membrane. As a result, ion and water movements through the epithelial cell membrane are abnormal, causing mucus hyper viscosity. Current therapies for CF involve mucolytics, antibiotics to prevent bacterial colonization and lung infection, and nutritional management. There is currently no disease-modifying drug approved for CF.. Oncology Our understanding of the molecular pathophysiology of cancer has improved significantly over the last 25 years. This has led to the testing of a large number of new approaches to treat cancer patients. Some of these target oriented approaches have led to impressive benefits for the patients with certain cancers, such as Hodgkin lymphoma or chronic myelogenous leukemia. However, the majority of cancers respond only initially or become resistant to current targeted therapies or drug combinations. Fortunately, the technologies available today allow rapid progress in further understanding the mechanistic basis of cancer and allow the selection and testing of new treatments. The recent identification of tumor stem cells, the importance of the tumor stroma – such as angiogenesis and the dissection of the process of tumor metastasis – and the process leading to cancer spread, all offer many new targets and target combinations. Taken together the result is a promise for improved treatments for cancer patients in the future.. iii. Cystic fibrosis. CF is caused by functional defects of the cystic fibrosis transmembrane conductance regulator (CFTR) protein, a chloride channel that controls ion and water content in epithelial cells. A large number of mutations can affect the CFTR protein; the most frequent is delF508. The delF508 mutation gives rise to a CFTR protein that retains some function, but which is not. Actelion’s research programs to identify and develop compounds for cardiovascular and other diseases have provided compounds which can be of potential use in oncology. For instance, endothelin receptors and endothelin are expressed in several tumor types, such as melanoma on tumor cells and stromal cells, and contribute to invasion and metastasis. Our endothelin antagonists are therefore being explored for application in cancer therapy. The test systems we use will not only analyze effects on the cancer cells but study the interaction between cancer cells and the tumor stromal elements (vascular cells and inflammatory cells). Besides exploiting compounds in our pipeline from other indication areas, we are using our discovery platform and experience with certain target classes to select novel oncology approaches.. Research and Development. 17. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Our focus Cystic fibrosis (CF) is an autosomal recessive, genetic disorder that leads to a multi-system organ dysfunction. CF is the most common fatal genetic disorder in the Caucasian population, affecting approximately 80,000 patients in the US and the EU. CF involves all epithelial cells, and classically impacts the lungs, sinuses, pancreas, liver/bile ducts, intestines, reproductive tract, bones, and sweat glands. The most serious consequence of CF is respiratory disease. Due to mucus hyper viscosity, individuals with CF develop chronic lung infections, leading to chronic inflammation and lung scarring. Progressive lung dysfunction is the most significant cause of morbidity and mortality with a median survival age of approximately 37 years..

(18) Clinical Development pipeline. The mission of Actelion’s clinical development department is to efficiently develop and register, on a global scale, innovative pharmaceutical products through creative and targeted clinical and pharmacological research – supported by high performing strategic clinical development, biometry, drug safety, drug regulatory, life cycle, and operations functions.. The following table summarizes our product candidates in clinical development programs at the end of 2007. Each such program can consist of multiple clinical trials.. Through life cycle of project teams, strategic clinical development initiates and consolidates the processes – from defining the target profile to submission – that are required to advance innovative compounds through the different phases of clinical development in a rapid and cost-efficient manner.. Product. Indication(s). Status. Commercialization rights. Bosentan. Pulmonary arterial hypertension WHO Class II. Phase III. Actelion. Pulmonary arterial hypertension in children. Phase III. Actelion. Chronic obstructive thromboembolic pulmonary hypertension. Phase III. Actelion. Combination therapy with sildenafil in pulmonary arterial hypertension. Phase III. Actelion. Idiopathic pulmonary fibrosis. Phase III. Actelion. Type 1 Gaucher Disease (Maintenance). Phase III. Actelion(1). Type 1 Gaucher Disease (Natural History). Phase IV. Actelion(1). Niemann-Pick Type C. Phase III. Actelion(1). Cystic fibrosis. Phase IIa. Actelion. Clazosentan. Vasospasm related morbidity and all-cause mortality in adult patients with aneurysmal subarachnoid hemorrhage. Phase III. Actelion. Actelion 1. Pulmonary arterial hypertension. Phase III. Actelion. Tezosentan. Right heart failure during separation from cardiopulmonary bypass in cardiac surgery. Phase III. Actelion. Almorexant. Insomnia and sleep disorders. Phase III. Actelion. S1P1 agonist. Auto-immune diseases. Phase I. Roche / Actelion(2). Renin inhibitor. Cardiovascular diseases. Phase II. Merck & Co., Inc./Actelion(2). Anti-allergy. Allergy. Phase I. Actelion. Our clinical science function ensures that all clinical programs adhere to the highest standards of science and medicine while ensuring the appropriate generation of all information required by health care authorities worldwide. Through global, cross-functional life cycle teams organized by the development function, we ensure the timely development of a product to its full potential – from entry-into-man through market introduction – and all appropriate measures are undertaken to maximize the full value creation potential of each product until patent expiration. The Biometry function, with expertise in the field of statistics and data management, supports the clinical development of Actelion’s compounds. In addition, the Biometry function is of key importance to the safety monitoring of marketed products. At the end of 2007, Actelion’s clinical development department was working on a total of 42 different clinical trials enrolling close to 4,900 patients. This represents a significant increase compared to 2006, with 20 trials and almost 3,200 patients.. Miglustat. (1) Except Israel, the West Bank and Gaza Strip (2) Co-promotion rights. 18. Research and Development. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. Clinical Development.

(19) Bosentan in clinical development About bosentan Bosentan (Tracleer®) is an orally active dual endothelin receptor antagonist (ERA). As of the end of 2007, Tracleer® was approved for pulmonary arterial hypertension (PAH) in WHO functional class III & IV in the United States and class III in Europe. In June 2007, Tracleer® was also granted marketing approval by the European Commission for the reduction in the number of new digital ulcers in patients with systemic sclerosis and ongoing digital ulcer disease. Regulatory proceedings to extend the label for Tracleer® to also include digital ulcerations are ongoing on a worldwide basis. Actelion’s development efforts for bosentan concentrate on compiling evidence in PAH sub-populations to assist doctors in their treatment approach. In addition, our development team is actively investigating bosentan’s potential in other endothelin-related diseases. Building on our knowledge about the effects of elevated endothelin levels, we are developing bosentan beyond PAH and digital ulcers as a treatment for idiopathic pulmonary fibrosis (IPF). IPF is a progressive and usually fatal disease of the lungs for which there is currently no approved therapy. Bosentan in mildly symptomatic pulmonary arterial hypertension (PAH). Bosentan in pediatric pulmonary arterial hypertension (PAH) i. Current status As of the end of 2007, discussions on the filing of a pediatric formulation of bosentan were underway with health authorities. ii. Supporting studies The Phase III open label, single-arm FUTURE-1 (pediatric FormUlation of bosenTan in pUlmonary arterial hypeRtEnsion) study evaluated the safety and pharmacokinetics of a unique, specially designed, pediatric formulation of bosentan. This study provided the necessary pharmacokinetic data which was presented at the European Society of Cardiology (ESC) in early September 2007. The longer-term safety and efficacy continues to be studied in the FUTURE-2 extension study. Bosentan in combination with sildenafil i. Current status The COMPASS program specifically evaluates the efficacy and safety of the use of bosentan in combination with sildenafil – an approved treatment for PAH, but one that addresses another pathological pathway of the disease.. i. Current status As of the end of 2007, discussions on the addition of the EARLY (Endothelin Antagonist tRial in miLdlY symptomatic PAH patients) clinical trial results and therefore the inclusion of WHO functional Class II PAH to the Tracleer® label – are ongoing with health authorities around the world.. Actelion has concluded COMPASS-1, the first clinical trial to provide detailed hemodynamic information on the combination of sildenafil and bosentan. The COMPASS-2 study is ongoing and investigates the effect on mortality and morbidity of a combination of bosentan with sildenafil versus sildenafil monotherapy.. ii. Supporting studies. COMPASS-1 demonstrated that the combination of sildenafil together with long-term bosentan therapy produces significant hemodynamic improvements, including a highly significant reduction in mean PVR observed 60 minutes after administration of a single dose of sildenafil 25 mg (-15.2% [95% CI: –20.8 to –9.6]; p < 0.0001) and a decrease in the mean total pulmonary resistance (-13.3% [95% CI: –17.0 to –9.6]; p < 0.0001).. Research and Development. 19. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. ii. Supporting studies The 185-patient EARLY study was a randomized, double blind, placebo-controlled trial and it is the only randomized controlled trial (RCT) to study a dedicated early-stage, or WHO functional Class II, PAH population. Patients were followed for at least six months and results showed a significant reduction in pulmonary vascular resistance and a delay in time to clinical worsening. A trend towards improvement in exercise capacity was observed..

(20) Bosentan in chronic thromboembolic pulmonary hypertension (CTEPH) i. Current status Actelion has concluded the first-ever placebo-controlled study BENEFiT evaluating BosEntan in iNopErable Forms of Chronic Thromboembolic pulmonary hypertension (CTEPH). We intend to discuss with health authorities the option to broaden the current PAH label for Tracleer® with the inclusion of this disorder. ii. Supporting studies The BENEFiT study met its primary objective with a significant reduction in pulmonary vascular resistance PVR (p<0.0001). In addition, patients on bosentan showed a significant improvement in breathlessness (Borg dyspnea score) with exercise and there was a trend in favor of bosentan towards prevention of worsening WHO functional class. Bosentan in digital ulcers due to systemic sclerosis i. Current status In June 2007, the European Commission granted marketing approval for Tracleer® for the reduction in the number of new digital ulcers in patients with systemic sclerosis and ongoing digital ulcer disease.. The total number of new ulcers during the treatment period was 1.4 for patients on bosentan versus 2.7 for patients on placebo representing a 48% reduction in the number of new digital ulcers. In late 2003, Actelion initiated a second pivotal Phase III clinical trial, RAPIDS-2 (RAndomized Placebo-controlled Investigation of Digital ulcers in Scleroderma) regarding Tracleer® in ischemic digital ulcers secondary to systemic sclerosis. In contrast to the earlier RAPIDS-1 trial, this trial evaluated prevention and healing in a population with more severe forms of the disease at the time of enrolment. The treatment duration was longer and a withdrawal period was implemented in order to assess the evolution of digital ulcerations after treatment interruption. The study enrolled a total of 188 patients in 41 centers worldwide. Patients with systemic sclerosis and at least one digital ulcer were treated with either bosentan (62.5mg bid for four weeks, then 125mg bid for at least 20 weeks and up to 32 weeks) or placebo. The total number of new ulcers over 24 weeks was 1.9 ± 0.2 for patients on bosentan versus 2.7 ± 0.3 for patients on placebo representing a 30% reduction in the number of new digital ulcers. The reduction in digital ulcers was more pronounced in severe patients with more than three active DUs at the start of the study. Bosentan in idiopathic pulmonary fibrosis. ii. Supporting studies RAPIDS-1 (RAndomized Placebo-controlled Investigation of Digital ulcers in Scleroderma) was a placebo-controlled double-blind clinical trial evaluating the prevention of ischemic digital ulcers in 122 patients with systemic sclerosis at 17 centers in Europe and North America. It was the first specifically designed study to look at prevention of ulcer formation. Furthermore, the study is among a very few to demonstrate clinical efficacy in systemic sclerosis. Patients with systemic sclerosis, who had either a history of at least one digital ulcer over the past 12 months or active digital ulcerations at the time of enrolment, were treated with either bosentan (62.5mg bid for four weeks, then 125mg bid for the next 12 weeks) or placebo.. 20. Research and Development. In May 2006, data presented from the BUILD program (Bosentan Use in Interstitial Lung Disease) at the American Thoracic Society (ATS) conference provided a strong rationale to further evaluate the safety and efficacy of bosentan in a morbidity/mortality-driven Phase III study in the idiopathic form of pulmonary fibrosis (IPF). As of the end of 2007, Actelion is conducting this trial (BUILD-3) in patients suffering from lung biopsy proven IPF with the objective to confirm the BUILD-1 results. The results could be available some time in 2009. ii. Supporting studies In early 2003, Actelion initiated BUILD-1, a clinical trial which addressed the idiopathic form of pulmonary fibrosis. In November 2005, the results of this trial became available and, although not statistically significant, positive trends were observed for pre-defined secondary endpoints – such as the combined incidence of death or treatment failure at 12 months (36.1% in the placebo group versus 22.5% in the bosentan group; p=0.076; 95% CL 0.37, 1.05), representing a relative risk reduction of 38%.. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. i. Current status As of the end of 2007, regulatory proceedings to extend the label for Tracleer® to include digital ulcerations are ongoing on a worldwide basis..

(21) Bosentan in metastatic melanoma. i. Current status. i. Current status. In March 2006, CoTherix, Inc., initiated a Phase III clinical trial called VISION to evaluate the safety and efficacy of iloprost on top of oral sildenafil in 180 patients with pulmonary arterial hypertension. Study recruitment was discontinued by yearend 2007 due to slow enrolment.. ii. Supporting studies Preclinical experiments have shown that endothelin plays a role in the proliferation of abnormal melanocytes in melanoma. In mid-2003, a pilot clinical trial was initiated with bosentan evaluating – without the use of placebo – the safety of 500 mg bosentan, twice a day, in 35 patients with stage IV metastatic melanoma.. Iloprost in clinical development About iloprost Iloprost (Ventavis®) is an inhaled formulation of a synthetic compound that possesses high affinity for the prostacyclin receptor (IP receptor). Iloprost has a similar pharmacological profile to endogenous prostacyclin (natural PGI2) but with greater chemical stability and longer half-life. The mechanism of action of iloprost influences all the main pathological mechanisms involved in pulmonary hypertension (potent vasodilation, antithrombotic activity, antiproliferative activity, anti-inflammatory and antifibrotic activity). In December 2004, the US Food and Drug Administration approved Ventavis® (iloprost) inhalation solution, developed by Bayer Schering Pharma for the treatment of pulmonary arterial hypertension (WHO Group I) in patients with Functional Class III or IV. CoTherix, Inc., a biopharmaceutical company based in San Francisco, USA, licensed the exclusive rights to develop and commercialize Ventavis® in the United States from Bayer Schering Pharma, which currently markets Ventavis®, as the first inhaled prostacyclin in Europe and other countries outside the US.. Clinical development of iloprost now concentrates on a placebo-controlled study to significantly shorten the inhalation time of iloprost. Initiation of this study is expected in 2008. ii. Supporting studies In March 2005, top line data of the Phase II clinical trial STEP – evaluating the safety and added benefit of iloprost inhalation solution therapy in patients with PAH already undergoing treatment with bosentan – were published. The analysis of this study showed that the combination of iloprost and bosentan provided clinical benefit to patients with PAH and was well tolerated, consistent with the safety profile observed in patients receiving only iloprost.. Miglustat in clinical development About miglustat Miglustat is a low-molecular weight inhibitor of glucosylceramide synthase and glucosidase. With its unique physicochemical properties miglustat exhibits a large volume of distribution and has the capacity to access deep organs such as brain, bone and lung. Miglustat in Type 1 Gaucher Disease i. Current status The MAINTENANCE trial is evaluating the long-term safety and efficacy of miglustat as maintenance therapy after a switch from enzyme replacement therapy (ERT) in mild-tomoderate adult Type 1 Gaucher Disease patients with stable disease. Patient recruitment for the MAINTENANCE trial is ongoing.. In March 2007, Actelion successfully completed the acquisition of CoTherix, Inc., thereby strengthening our PAH franchise by adding Ventavis® to our product offering in the US.. Research and Development. 21. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. An event-driven, placebo-controlled, Phase II clinical study was performed in close to 90 patients with stage IV metastatic melanoma already treated with Dacarbazine (DTIC). The study concluded in December 2007, and results did not support the initiation of a full clinical development program in this indication. We will fully analyze the data generated and discuss the detailed findings with key medical experts in the field. We will also continue to evaluate the potential use of endothelin receptor antagonism in pre-clinical cancer models..

(22) Zavesca® (miglustat 100 mg) is the only oral drug available for the treatment of Type 1 Gaucher Disease. The product was approved on the basis of three international open-label clinical trials. The rationale for the use of miglustat in Type 1 Gaucher Disease is to help balance the overall level of glucosylceramide by reducing its production to a level compatible with breakdown by residual glucocerebrosidase activity, a unique mode of action known as ”substrate reduction therapy”. Recently, results from a pooled analysis of the three open-label clinical trials have shown that miglustat monotherapy may reduce the incidence of bone pain and improve bone mineral density in Type 1 Gaucher Disease patients, including those with a high risk of bone loss – such as splenectomized and osteoporotic patients (Pastores et al, Clin. Ther. 2007 29, 1645-1654). Miglustat in Niemann-Pick Disease Type C i. Current status The results of the clinical trial OGT 918-007 evaluating safety and efficacy of miglustat in patients with Niemann-Pick disease Type C (NPC) were submitted to health authorities in Europe. These results served as the basis for a type II variation application which Actelion submitted to extend the indication for Zavesca® in the treatment of neurological manifestations in patients with NPC. In October 2007, the Committee for Medicinal Products for Human Use (CHMP) issued a negative opinion on this type II variation. At Actelion’s request, the CHMP is re-examining its original negative opinion, and a final opinion is expected in Q1 2008. Furthermore, a multi-center, retrospective survey has been initiated to collect physicians’ assessment of changes of neurological manifestations and overall utility of miglustat treatment in NPC patients currently or previously treated with miglustat outside of clinical trials. The results of this retrospective survey will be presented in Q2 2008. ii. Supporting studies Miglustat is able to cross the blood-brain barrier and, in an NPC mouse model, substrate reduction therapy with miglustat was shown to reduce glycosphingolipid accumulation in the brain, improve neuromotor performance and increase survival. This data served as the basis for conducting the randomized controlled clinical trial OGT 918-007. In this trial, NPC patients aged 12 years or older (n=29) were randomly assigned to receive either miglustat 200 mg three times a day (n=20), or standard care (n=9) for 12 months.. 22. Research and Development. Twelve children under 12 years of age were included in an additional group; all received miglustat at a dose adjusted for body surface area. All participants were then treated with miglustat for an additional year in an extension study. The primary endpoint was horizontal saccadic eye movement (HSEM) velocity, based on its correlation with disease progression. At 12 months, HSEM velocity had improved in patients treated with miglustat versus those receiving standard care; results were significant when patients taking benzodiazepines were excluded (p=0.028). Children showed an improvement in HSEM velocity of similar magnitude. Improvement in swallowing capacity, stable auditory acuity, and a slower deterioration in ambulatory index were also seen in treated patients of 12 years or older. Although the extension phase of the trial was not controlled, the data at 24 months confirmed that treatment with Zavesca® can provide disease stabilization for important markers of neurological dysfunction in NPC disease, both in the juvenile/adult and pediatric groups. The 24 month results further strengthen the interpretation of a treatment effect of miglustat indicated by the 12 month, controlled clinical trial phase previously reported. The safety and tolerability of miglustat 200mg, three times daily in NPC patients was consistent with previous trials in GD1 patients, where 100 mg three times daily was used. Miglustat in cystic fibrosis i. Current status In October 2007, Actelion initiated a Phase IIa proof-of-concept clinical trial with miglustat in cystic fibrosis (CF). It is the first time that miglustat is being tested in a clinical setting involving CF patients. The proof-of-concept clinical trial has been designed as a single center, double-blind, randomized, placebo-controlled, crossover study in 25 CF patients affected by the specific delF508 mutation. As a primary endpoint, the trial will investigate the effect of miglustat on the nasal potential difference, a sensitive and non-invasive functional test for the cystic fibrosis transmembrane conductance regulator (CFTR). Defects of CFTR are responsible for the characteristic morbidities of the disease. Actelion expects full results of this proof-of-concept clinical trial to become available at the end of 2008. These results, if positive, will determine the need, size and duration of future studies.. WorldReginfo - 954f6161-6bac-48a4-873f-6ee9f4f1d49c. ii. Supporting studies.