Nov. 28, 2002 - Connetics Corporation (NASDAQ: CNCT) , a specialty pharmaceutical company focused on the development and commercialization of dermatology products, announced recently it has received the final milestone payment from Pharmacia Corporation (NYSE: PHA) after the successful completion of a pre-determined milestone with minoxidil foam.

In January 2002, Connetics announced a licensing agreement granting Pharmacia Corporation exclusive global rights, excluding Japan, to Connetics' proprietary foam drug-delivery technology for use with Pharmacia's Rogaine(R) (minoxidil) hair loss treatment.

"Pharmacia has been a highly committed and terrific partner," said Thomas G. Wiggans, Connetics President and Chief Executive Officer. "Surveys among dermatologists and consumers have repeatedly demonstrated a strong preference for Connetics' foam delivery vehicle, and a high level of excitement for a minoxidil foam product.

Patient compliance is a significant challenge for hair loss treatments, and we believe preference for the foam delivery vehicle could create a significant therapeutic advantage over other forms of minoxidil. The application of proprietary foam delivery technology to the Rogaine product is a great example of the opportunity to innovate and to strengthen existing brands."

Hairlosshelp interviewed a representative from Connetics to learn more about their proprietary foam technology.

HAIRLOSSHELP: Tell us about Connetics and the type of drugs you make.

CONNETICS: Connetics Corporation (Nasdaq: CNCT) is an independent pharmaceutical company focused on the development and commercialisation of innovative therapeutics for the dermatology market. The Company's marketed products are Luxiq® (betamethasone valerate) Foam, 0.12% and OLUX™ (clobetasol propionate) Foam, 0.05%; they are both indicated for scalp dermatoses. A further two products will enter Phase III clinical trials during the next few quarters. Connetics has a total of 170 employees including a 60-member field sales force detailing major dermatology practitioners throughout the USA. In April 2001, Connetics acquired Soltec Research Pty Ltd. Soltec is focused on discovering and developing innovative topical drug delivery formulations. These formulations aim to improve the management of dermatological diseases, provide significant product differentiation, and extend product life cycles.

HAIRLOSSHELP: How did your foam technology get developed?

CONNETICS: The foam technology was developed by Connetics' Australian subsidiary, Soltec Research Pty Ltd. Soltec had been researching better means of delivering drugs to the skin, and particularly the scalp, and has found that the foam technology is a particularly elegant and effective means of achieving this goal. Several other Soltec-deveoped foam products have been commercialised by companies other than Connetics, including Bayer ("RID Mousse"), Pfizer ("Banlice") and Ecolab ("Hexifoam").

HAIRLOSSHELP: What current products do you have using this technology?

CONNETICS: See above. In addition we are developing a clindamycin foam (acne), a ketoconazole foam (seborrheic dermatitis) and an emollient version of our current Olux product.

HAIRLOSSHELP: Tell us more about the minoxidil foam product and how it works.

CONNETICS: The mechanism of action of minoxidil in promoting hair growth has been well studied and it is proposed that this is unchanged by the foam delivery vehicle. However, the DELIVERY of drugs is a critical part of their overall effectiveness in the clinical setting, and this is where the foam technology is superior. Many topical drugs are formulated in "any old topical delivery vehicle". This is often an expedient means of getting product to market, but it fails to acknowledge that the consumer may find the product messy, gunky or otherwise unpleasant to use. Obviously no drug will work if it is not used, and if it used less than per the directions, it will consequently work less than its true potential.

The foam vehicle, along with associated minoxidil solubilisation technology, allows us to minimise the amount of one of the ingredients of typical lotion products, propylene glycol, that is both sticky and a source of irritation in a significant proportion of patients, while at the same time having a highly elegant and effective means of delivering minoxidil to the scalp.

The foam technology is designed to retain its "foamy" structure at room temperature, much like a shaving foam, but to very rapidly disintegrate, or "melt" at skin temperature. This ensures that a dose of the product can be conveniently applied to the scalp and rubbed in without it dripping or running down the forehead or neck, and very importantly, without leaving a sticky residue in the (remaining) hair.

HAIRLOSSHELP: Does this product eliminate the need for propylene glycol and alcohol?

CONNETICS: We are working on several formulations at the moment. One of these contains NO propylene glycol, the other has a minimal amount. Both still contain alcohol.

HAIRLOSSHELP: Are there any limitations to what strength of minoxidil the foam can deliver since minoxidil tends to crystallize at concentrations above 10%?

CONNETICS: Our patented technology provides a means of solubilising minoxidil at levels above 10%.

HAIRLOSSHELP: Would this offer a benefit over a liposomal type of vehicle in terms of delivering the drug to the dermis and sub-dermis?

CONNETICS: This is difficult to answer without direct comparitive studies. Naturally we believe our technology offers advantages at least in terms of simplicity of production, cost, stability and probably cosmetic elegance.

HAIRLOSSHELP: Have you done any human tests with the minoxidil foam product?

CONNETICS: No. Formal clinicals are planned to commence within the next 12 months.

HAIRLOSSHELP: Is the license with Pharmacia for the new minoxidil based foam an exclusive one or will it be available in generic form as well?

CONNETICS: The license is exclusive. We do not expect generic competition.

HAIRLOSSHELP: Will Pharmacia need to test it for the FDA to approve the new vehicle? Does it need FDA approval?

CONNETICS: Yes, the product will require FDA approval since it is a new formulation.

HAIRLOSSHELP: How long will it take?

CONNETICS: This depends on what studies the FDA will require, but at least two years.

HAIRLOSSHELP: How far is the development of the product? Is it in the testing stages, or still in the early development stages?

CONNETICS: See above.

HAIRLOSSHELP: Do you anticipate the product being available within the next year?

CONNETICS: No, except through clinical trials.

HAIRLOSSHELP: Will there be any prescription needed or will it be handled in the same way as the OTC version?

CONNETICS: That depends on Pharmacia's marketing strategy.