February 27, 2007

Teikoku Pharma Announces Contract with Dermatrends to Study Transdermal Application of Anti-Psychotic Drug

Teikoku Pharma USA, Inc., announced today that it has entered into an agreement with Dermatrends, a drug delivery company, to develop a prototype patch formulation for the transdermal delivery of a widely used anti-psychotic pharmaceutical compound.

Under terms of the agreement, Dermatrends will be providing the drug delivery technology for transdermal delivery of an anti-psychotic drug that was selected by Teikoku. Dermatrends will utilize its standardized developmental process for effective transdermal delivery. While there are no assurances that Teikoku and Dermatrends will subsequently enter into a joint development or licensing agreement, Dermatrends CEO Ted Schwarzrock said he is optimistic about prospects for positive results from the development of this prototype.

Schwarzrock said, “We have produced positive efficacy results for many of our products, including similar compounds to the one we are testing for Teikoku. Our mission is to help demonstrate Dermatrends’ patented hydroxide releasing agent (HRA) technology can be combined with the chosen active pharmaceutical ingredient (API) to produce a proprietary pharmaceutical product for our new partner. There are millions of people who rely on anti-psychotic medication but who cannot be relied upon to take their oral dosage without supervision. Transdermal delivery of this drug represents a large untapped market, Schwarzrock continued. “We believe that transdermal delivery could be a preferred method of delivery for many patients and their caregivers, representing an important new market opportunity.”

Anti-psychotics are part of the broad category of drugs treating the central nervous system (CNS), drugs that constitute the second largest therapeutic category of ethical drugs and include antipsychotic agents, anti-depressants, anti-schizophrenic agents, and other drugs. Retail sales in the U.S. of ethical anti-psychotic drugs were $10.47 billion for the 12 months ended in October 2006, according to a recent report by IMS Health.

Teikoku Pharma USA, Inc. is a world leader in innovative, high-quality drug delivery systems. In addition to its proprietary products, Teikoku has provided the technology and platform for well known branded products including the widely used Lidoderm®, a lidocaine patch marketed by Endo Pharmaceuticals Inc. in the United States. Total U.S. sales of the Lidoderm patch were $548 million in 2005 and $748 million in 2006, according to IMS. Institut Biochimique S.A. (IBSA) markets the lidocaine patch in Switzerland as Neurodol Tissue Gel. Recently, the patch was approved in the United Kingdom under the Versatis trademark, and it will be distributed by Grunenthal in the European Union, Latin America and the Middle East. Additionally, the patch will be distributed in Korea by SK Chemical under the Lidotop brand. Teikoku Pharma USA is a subsidiary of the Japan based company Teikoku Seiyaku Co., Ltd. More information can be found at www.Teikokuusa.com.

Drematrends, Inc. is a privately held drug delivery and medical research company based in Minneapolis, Minn. The company is dedicated to the development of proprietary transdermal and other drug delivery technologies, and it has demonstrated an enabling platform technology that allows a broad variety of ethical and over-the-counter drugs to permeate the skin and mucosal surface and enter the bloodstream at therapeutic levels in excess of anything currently commercially available. The company is currently actively developing its partnerships and other relationships in the global pharmaceutical industry to commercially introduce its technology. Additional information is available on the company’s website.