KAI-1678, First-in-Class Compound, Enters Phase 2a Clinical Testing for the Treatment of Pain

South San Francisco, CA – December 10, 2008 – KAI Pharmaceuticals, Inc., a privately held drug discovery and development company, today announced the Company has initiated enrollment in a Phase 2a clinical study of KAI-1678 in patients with moderate to severe postoperative pain following total hip or total knee replacement. KAI-1678, a first-in-class, isozyme-selective, small peptide inhibitor of the epsilon protein kinase C pathway (epsilon PKC), has been shown to be safe and well-tolerated in Phase 1 testing.

Gregory Bell, KAI’s Senior Vice President of Development and Chief Medical Officer, commented, “We are pleased with the progress of our program for KAI-1678. Novel therapies for pain are needed to avoid the side effects and inadequate efficacy of currently available treatments. KAI-1678 represents a new approach, targeting the epsilon PKC pathway, which has been shown to have an important role in both inflammatory and neuropathic pain.”

KAI's double-blind, randomized, placebo- and active-comparator-controlled, single-dose study will evaluate the efficacy of KAI-1678 administered by subcutaneous (SQ) infusion for the treatment of postoperative pain. The primary endpoint of the study is the difference in pain intensity scores summed over the treatment period in patients with moderate to severe postoperative pain following total hip or total knee replacement. The study will enroll 110 patients and is expected to complete in 2009. The study is being conducted in New Zealand.

Approximately 50 million people in the United States suffer from some form of persistent pain, while another 25 million suffer acute pain each year as a result of injury or surgery. According to a survey by the American Pain Society, four out of ten people suffering moderate-to-severe pain were unable to find adequate pain relief. There is a major need for novel therapeutics with unique mechanisms of action that provide effective pain relief with reduced side effects. Current treatments for pain, such as opioids and nonsteroidal anti-inflammatory drugs (NSAIDs), can be limited by serious side effects and inadequate efficacy.

About KAI-1678
KAI-1678 is an isozyme-selective, small peptide inhibitor of the epsilon protein kinase C pathway. Epsilon PKC is a well-validated target for both inflammatory and neuropathic pain in the preclinical, peer-reviewed scientific literature. KAI’s approach is the first to enable the specificity of action required to make epsilon PKC inhibition a viable clinical approach.

KAI-1678 has been shown to be highly effective at reversing pain in preclinical models of both neuropathic and inflammatory pain.

About KAI Pharmaceuticals
KAI is a drug discovery and development company with multiple, novel clinical-stage programs in cardiovascular disease and pain. KAI’s lead product candidate, KAI-9803, is partnered with Bristol-Myers Squibb and has demonstrated efficacy in reducing damage to heart and improving cardiac function in myocardial infarction (MI) patients undergoing balloon angioplasty. KAI’s second clinical program, KAI-1678, is a promising, first-in-class drug candidate that may address both the inflammatory and neuropathic pain markets.

KAI’s expertise is in the selective modulation of intracellular protein:protein interactions and delivery of peptides into the cell. This approach has broad potential and has been validated clinically. The Company has applied its core expertise to discover highly potent and selective inhibitors and activators for validated PKC protein kinase C (PKC) isozymes. KAI is based in South San Francisco, California, and can be found online at www.kaipharma.com .