Advancis Pharmaceutical Corporation, a pharmaceutical company focused on developing and commercializing novel anti-infectiveproducts, today announced the signing of a letter of intent with Par Pharmaceutical, Inc. (Par), a division of Pharmaceutical Resources, Inc., as its strategic partner to develop and commercialize Amoxicillin PULSYS, Advancis' most advanced product candidate, utilizing its proprietary once-a-day pulsatile delivery technology called PULSYS.

Under the terms of the letter of intent, Advancis would receive a fee of $5.0 million and a commitment from Par to fund all further development expenses in exchange for granting Par the exclusive right to sell Amoxicillin PULSYS and the co-exclusive right to market the product. The two parties intend to jointly fund and run the marketing and sales program and to share operating profits from product sales on an equal basis. Advancis would be responsible for the manufacturing program, would retain all patents and trademarks, and would be responsible for patent and trademark enforcement. The companies expect to negotiate and finalize a definitive agreement shortly, but cannot assure that a definitive agreement will be entered into in accordance with these terms, or at all.

Amoxicillin is one of the most widely prescribed drugs in the world, with over 60 million prescriptions written annually and over one billion patient exposures. Amoxicillin is indicated for a broad range of infections, and is commonly prescribed as a first-line therapy for common infections such as otitis media, pharyngitis, and sinusitis. Amoxicillin is currently prescribed two or three times daily for ten days. US amoxicillin sales are currently about $500 million. Par and Advancis believe that Amoxicillin PULSYS could substantially expand the value of this therapeutic category.

Amoxicillin PULSYS is designed to deliver amoxicillin at lower dosages over a shorter duration of therapy in a once-daily formulation. Advancis' preclinical studies demonstrated improved bactericidal effect for amoxicillin when delivered in a pulsatile fashion versus standard dosing regimens, even against resistant bacteria. Additionally, amoxicillin delivered through the Company's PULSYS system eliminated sensitive strains of Strep. pneumoniae at antibiotic levels that would not have otherwise been expected to inhibit bacterial growth. Advancis believes its novel PULSYS technology could result in decreased emergence of antibiotic resistant bacteria due to significantly reduced levels of antibiotic delivered per course of therapy.

"We have had an outstanding relationship with Par and are pleased to partner with them on the commercialization of our first PULSYS product," stated Edward Rudnic, CEO of Advancis. "Through this relationship, we expect to benefit from Par's distribution expertise with over 170 products, enabling us to comfortably transform Advancis from a research-based, out-license company, into a product sales-driven, functionally-integrated specialty pharmaceutical company. In addition, we are actively engaged in both developing and seeking to acquire additional antibiotic products that we can improve with our PULSYS technology. We expect to leverage these with any future sales and marketing capabilities. Finally, we are working with Par to identify additional products to add to this portfolio."

"We look forward to working with our good partners at Advancis to bring this exciting new product to market," said Scott Tarriff, president and CEO of Pharmaceutical Resources. "The availability of a pulsatile form of amoxicillin would be highly valued by physicians, patients, and public health officials concerned with the issue of amoxicillin resistance."