CoTherix, Inc. and Asahi Kasei Pharma Corporation announced that the companies have entered into an agreement granting CoTherix exclusive rights in North America and Europe to develop and commercialize oral and inhaled formulations of Fasudil, a rho-kinase inhibitor, for the treatment of pulmonary arterial hypertension (PAH). Additionally, CoTherix has acquired exclusive rights to develop and commercialize oral formulations of Fasudil for the treatment of stable angina in the same territories.

Under the terms of the agreement, CoTherix will make an upfront payment of $8.75 million to Asahi Kasei Pharma, plus development and revenue milestone payments and royalties on future products. CoTherix also has an option to develop Fasudil in North America and Europe for other potential indications using the licensed formulations with the exception of stroke and eye diseases.

"We believe that Fasudil, with its known mechanism of action and novel vasodilating and anti-proliferative properties, will have an important place in physicians' treatment strategies for patients with PAH and stable angina," said Donald J. Santel, Chief Executive Officer of CoTherix, Inc. "This agreement represents a significant development and commercial opportunity for CoTherix, as it will augment and extend our current efforts in PAH and gives us a solid platform upon which to expand our pipeline as a cardiovascular company. We expect our proven development and commercial capabilities to serve us well as we move forward with the clinical development of Fasudil."

"Asahi Kasei Pharma sees this agreement as a wonderful opportunity to exploit the potential of Fasudil in the US and European cardiovascular markets," said Kei Oe, President of Asahi Kasei Pharma. "The compound's already proven track record in Japan has given us confidence in its safety and efficacy as a rho-kinase inhibitor, and this collaboration will validate its ability to be a valuable therapeutic tool in the treatment of PAH and in stable angina. Together, we look forward to successfully developing Fasudil and introducing this unique and novel drug to the PAH and stable angina markets."

The crucial role that rho-kinase plays in the pathophysiology of vascular diseases, such as pulmonary hypertension, stable angina, and atherosclerosis, has been established in preclinical and emerging clinical research over the last decade. In addition, results from in vitro and in vivo studies suggest that rho-kinase inhibitors, such as Fasudil, can reduce vasoconstriction and cell proliferation. An intravenous formulation of Fasudil was approved in June 1995 in Japan and is marketed by Asahi Kasei Pharma for the prevention of cerebral vasospasm in patients with subarachnoid haemorrhage.

CoTherix currently expects 2006 sales, general and administrative and research and development expenses to be between $91 million and $98 million. This includes Fasudil acquired product rights of $8.75 million and non-cash stock option expenses under SFAS123 (R) of between $8.0 and $9.0 million. The increase in expenses is substantially attributable to the upfront payment, additional investments in clinical trials and other costs related to the development of Fasudil. CoTherix expects total cash and cash equivalents and securities available-for-sale at the end of 2006 to be between $53 million and $63 million.

Pulmonary arterial hypertension (PAH) is a chronic, progressive and often fatal disease, which is characterized by severe constriction and obstruction of the pulmonary arteries. This makes it difficult for the heart to pump blood through the lungs to be oxygenated. CoTherix estimates that PAH affects approximately 100,000 patients in the United States and Europe, with only about 30 per cent diagnosed and under treatment. Its cause may be unknown, or result from other diseases that cause a restriction of blood flow to the lungs, including scleroderma, HIV and lupus. Symptoms of the disease include fatigue, shortness of breath on exertion, chest pain and dizziness. Left untreated, the median survival time following diagnosis may be as short as three years.

Stable angina is chest pain or discomfort that often occurs when the heart does not get enough blood. Stable angina may occur during exercise or emotional stress. Some people, such as those with a coronary artery spasm, may have stable angina at rest. An estimated 6.5 million individuals in the United States suffer from stable angina. CoTherix's initial development strategy will be to focus on the estimated 900,000 patients who are not adequately treated with current therapies. Stable angina is a symptom of coronary artery disease, which is a leading cause of death in Western countries. It is believed that Europe has a similar prevalence and incidence for stable angina as the United States.