Novartis Pharma AG will initiate the development of an oral human growth hormone (rhGH) product using Emisphere Technologies, Inc.'s eligen delivery technology. Emisphere is entitled to a $5 million development commencement milestone payment as a result of the Novartis Pharma AG decision to proceed with product development.

"We are very pleased that Novartis has elected to commence this oral product development using our technology," commented Michael M. Goldberg, Chairman and Chief Executive Officer of Emisphere. "We are eagerly awaiting the results of a study which we hope will show that such a large and complex protein can be delivered orally in an active form by Emisphere's eligen delivery technology. The study is currently on-going, however positive results would exemplify the utility of Emisphere's eligen technology for the oral delivery of large proteins similar in size and complexity to rhGH," he added.

Novartis Pharma AG notified Emisphere that it had initiated a multidose study in growth hormone-deficient adults with the oral formulation of rhGH in Q1 this year. Once finished, the results of the trial will be communicated in an appropriate and timely manner, according to the company release.

The payment of this development commencement milestone is the result of a license agreement executed by Emisphere and Novartis. Emisphere is entitled to receive additional milestones and royalties from Novartis should an oral growth hormone product be commercialized using Emisphere's eligen technology.

In 2000, Emisphere and Novartis entered into a license agreement for the development of oral salmon calcitonin for the treatment of osteoporosis; in 2004, the two companies entered into a license agreement for the development of oral human growth hormone. In March of 2006, the two companies entered into a license agreement for the development of an oral form of parathyroid hormone (PTH) fragment 1-34 following a January 2006 ruling by a US Federal Court that Eli Lilly had breached its agreements on PTH with Emisphere.

Emisphere's broad-based oral drug delivery technology platform, known as the eligen technology, is based on the use of proprietary, synthetic chemical compounds, known as EMISPHERE delivery agents, or "carriers". These molecules facilitate or enable the transport of the therapeutic macromolecules across biological membranes such as those of the gastrointestinal tract, and exert their desired pharmacological effect. Emisphere's eligen technology makes it possible to orally deliver a therapeutic molecule without altering its chemical form or biological integrity.