Aradigm Corporation has acquired selected assets of Weston Medical, a publicly held, UK-based company founded in 1994. Weston's proprietary technology, Intraject, offers a needle-free alternative to conventional injections that has attracted commercial and development partners seeking to deliver a variety of liquid formulations. Intraject is currently in development to deliver biotherapeutics including monoclonal antibodies, proteins and small molecule drugs. The addition of the Intraject technology expands Aradigm's platform of liquid delivery alternatives, and increases its partnered portfolio by two commercial agreements and several earlier-stage development agreements.

The total cost of the asset acquisition to Aradigm is approximately $2 million in cash, and includes test and production equipment, intellectual property and other assets. Weston's commercial agreements covered the Intraject delivery of PEGASYS (PEG-interferon alpha 2-a) with Roche for hepatitis-C, Imitrex (sumatriptan) with GlaxoSmithKline for migraine, as well as an option agreement for undisclosed products with Abbott Laboratories. "Aradigm has already developed the AERx system, which represents the future of administering liquid formulations through pulmonary delivery. The addition of the Intraject technology further positions Aradigm as the leader in needle-free delivery" commented Richard P. Thompson, Aradigm Chairman, President and CEO. "We look forward to solidifying the current license arrangements and expanding to new applications as quickly as possible."

In September 2002, Weston announced a delay in the development of Intraject that resulted in the loss of more than 95% of its $150 million market capitalization, and led to the company entering bankruptcy administration in February 2003. Laboratory and clinical evaluation of Intraject completed since September indicates that the technical problem can be resolved within the existing design parameters. Continuation of the development effort will now be managed at Aradigm in Hayward, California. After completion of the technology transfer from Weston, operations in the UK will be discontinued.

Intraject is a single-use, pen-sized system that delivers liquid drugs to subcutaneous tissue. Intraject is comfortable and easy to use; in clinical trials, patients overwhelmingly preferred Intraject to a standard needle and syringe. In addition, Intraject avoids potential dosing errors from transferring solutions into syringes, and eliminates the risk of needle-stick injuries. Studies in humans have demonstrated equivalent pharmacokinetic and/or pharmacodynamic performance between subcutaneous needle injection and Intraject. According to Jean-Marie Kindbeiter, Project Leader of the Intraject PEGASYS team at Roche: "Roche views Needle Free Device (NFD) technology as a major advance in the administration of parenteral drugs, and plans to continue the collaboration with Aradigm and their Intraject technology."

Aradigm will continue development of Intraject by re-allocating existing resources and is anticipating no more than a small increase in its current cash burn rate. Weston had pursued a virtual manufacturing strategy with key manufacturing activities performed at the facilities of several contract manufacturing organizations (CMOs). Many of these existing CMO relationships can be reestablished in order to minimize internal resource requirements, while infrastructure such as Quality will be leveraged across both AERx and Intraject projects. According to Tom Chesterman, Aradigm Chief Financial Officer: "Attaining key technical and business milestones, with judicious resource allocations to both Intraject and AERx over the next three to four quarters, will be important for building Aradigm's long-term value."