KAI Pharmaceuticals Expands KAI-1678 Development Program, Initiating a Phase 2a Study for Neuropathic Pain

South San Francisco, CA – March 31, 2009 – KAI Pharmaceuticals, Inc., a privately held drug discovery and development company, today announced the Company has initiated a second Phase 2a study of KAI-1678, a first-in-class, isozyme-selective, small peptide inhibitor of the epsilon protein kinase C pathway (epsilon PKC). The study has begun enrollment of patients for the treatment of chronic neuropathic pain associated with chronic postherpetic neuralgia (PHN). In December 2008, KAI announced the initiation of its first Phase 2a study of KAI-1678 in patients with moderate-to-severe postoperative pain following total hip or total knee replacement.

Gregory Bell, KAI’s Senior Vice President of Development and Chief Medical Officer, commented, “Our expanded Phase 2 program allows us to study KAI-1678, a promising non-opioid, non-NSAID, in multiple indications in both acute and chronic pain. KAI is the first company to develop a selective inhibitor of epsilon PKC. We believe there is great potential for this novel approach, which may avoid the side effects and limited efficacy of currently available treatments.”

KAI’s Phase 2a PHN study is a double-blind, randomized, placebo- and active-comparator-controlled, single-dose, crossover trial designed to evaluate the efficacy of KAI-1678 administered by subcutaneous (SQ) infusion. The primary endpoint of the study, which is being conducted in Australia, is the mean change from baseline in pain intensity scores at the end of drug infusion.

KAI-1678 has been shown to be highly effective at reversing pain in preclinical models of both neuropathic and inflammatory pain, two applications for which epsilon PKC has been well-validated in the peer-reviewed scientific literature. The Company’s Phase 1 results indicated KAI-1678 was safe and well-tolerated in healthy volunteers.

Background on Pain
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. It is estimated that 500,000 cases of herpes zoster infection occur in the United States each year, and approximately 10 percent of patients with herpes zoster develop postherpetic neuralgia.

Overall, four out of ten people suffering moderate-to-severe pain were unable to find adequate pain relief, according to a survey by the American Pain Society. 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 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 currently in a Phase 2b study (PROTECTION AMI) designed to assess the effect of KAI-9803 on reducing myocardial injury in heart attack patients. KAI’s second clinical program, KAI-1678, has the potential to address both the inflammatory and neuropathic pain markets and currently is in multiple Phase 2a studies.

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 .