Cellegy Pharmaceuticals Inc has made considerable progress with a new 150-patient Phase 3 clinical trial with Cellegesic (nitroglycerin ointment) for the treatment of pain associated with chronic anal fissures. There are currently no United States Food and Drug Administration (FDA) approved drug therapies for this condition, which afflicts approximately 700,000 people in the United States.

This new study is intended to confirm the statistically significant pain reduction seen in the previous two Phase 3 studies. This trial's protocol and logistics are designed to expedite completion of the study and address FDA requirements agreed to in several meetings and discussions during the past several months. Highlights include:

-- The FDA has agreed to a "Special Protocol Assessment" which is intended to provide assurance that if pre-specified trial results are achieved, the FDA will approve the NDA. The protocol includes agreement on the statistical methodology to be used for the analysis of results, a point of contention in the earlier trial.

-- David A. Karlin, who joined Cellegy late last year as Vice President, Clinical Research, has hired a new team of clinical research associates and outside advisors to complement the Company's extensive clinical experience with Cellegesic. This new clinical team will monitor 20 domestic clinical sites, whereas the previous study used a Contract Research Organization (CRO) for recruiting, thereby providing greater control over the domestic management of the trial.

-- Cellegy has retained a new CRO with a track record of success in Central and Eastern Europe to monitor an additional 20 sites. Because patients in these countries typically do not have easy access to pharmacy compounded nitroglycerin, enrollment is predicted to be brisk.

-- Since the start of the pivotal study in June 2003, 40 clinical sites have been recruited in the United States and Europe and 25 of 150 patients at just 7 sites have already been enrolled in the trial.

In April 2002, Cellegy withdrew its NDA for Cellegesic after the FDA concluded that Cellegy had not adequately pre-specified the statistical method used to analyze the trial results. Cellegy believes these concerns have now been fully addressed through the new mutually agreed upon trial protocol.