Axcan Pharma Inc has announced that the U.S. Food and Drug Administration (FDA) has determined that the New Drug Application (NDA) that Axcan re-submitted for Helicide for the eradication of Helicobacter pylori, continues to be "not approvable" at this time. Certain of the FDA inspection-related issues, communicated to Axcan in an August 12, 2002, action letter for one of the five manufacturing sites, remain unresolved and were the basis for this "not approvable" letter. As in the previous letter, the FDA has not raised any safety or efficacy issues. Helicide was approved in Canada in the second quarter of fiscal 2003.

During the last year, Axcan has worked closely with the Italian manufacturer identified in the NDA to resolve all outstanding issues. However, the ability of this manufacturer of one of Helicide's ingredients, biskalcitrate potassium (bismuth salt), to implement all required corrective action is severely limited due to its present financial status. Axcan will meet with the FDA in the coming weeks to discuss alternative plans and, shortly thereafter, intends to announce revised regulatory timelines.

"Helicide is an important product candidate for Axcan, and we will continue to work to resolve the outstanding regulatory issues in order to bring this product to the market as soon as possible," commented Leon F. Gosselin, President and CEO of Axcan. "Obviously, we are disappointed that the launch of Helicide is delayed due to this temporary set-back. However, our current business remains strong and we are confident that we will meet or exceed analysts' current expectations for net revenues in excess of U.S. $200 million and income in excess of U.S. $0.80 per basic share or U.S. $0.70 per fully diluted share for fiscal year 2004," he concluded.