During 2006, MB07811, our fifth internally discovered product candidate and our third metabolic disease product candidate, entered clinical trials, no small feat for a company at our stage. MB07811 uses our proprietary HepDirect prodrug technology and other structural features to target a beta-subtype-selective thyroid hormone receptor (or TRb) agonist to the liver to reduce serum cholesterol, specifically the LDL fraction (the “bad” cholesterol) and triglycerides. If liver targeting can unlock the efficacy of the TRb agonists by avoiding the safety concerns that have prevented them from advancing in clinical development in the past, we may be able to provide physicians and patients with an important new approach to control hyperlipidemia.

We have extensively evaluated the potential of MB07811 in numerous animal models including primates and we are encouraged by the results seen to date. In preclinical animal models, it was shown that MB07811 effectively lowered total serum cholesterol and liver triglycerides. In certain animal models, MB07811 lowered serum cholesterol as effectively as atorvastatin, the active ingredient in the widely-prescribed statin, Lipitor®. MB07811 provided an additive effect in these models when used in combination with atorvastatin and may possibly offer certain other advantages over statins. For instance, our preclinical studies showed a reduction in both serum and liver triglyceride levels, as well as, lipoprotein a [Lp(a)] and, in certain animal models, a reduction in liver fat. High triglycerides and high Lp(a) are lipid measures associated with increased risk of cardiac disease and fatty liver may be associated with increased risk of diabetes and chronic liver disease. Importantly, the reductions were seen in these animal models at doses well below doses that are associated with side effects. In other words, MB07811 appears to have a therapeutic index that may be wider than other TRb agonists tested thus far by other companies. The therapeutic index is the ratio of the dose that causes side effects to the dose that provides the beneficial activity.

In the fourth quarter of 2006, we initiated and successfully completed a Phase 1 clinical trial for MB07811, designed to evaluate its safety and tolerability in a rising single dose study in healthy volunteers. We expect to pursue additional clinical studies of MB07811, including a multiple dose Phase 1b study in healthy volunteers with elevated LDL cholesterol in the second quarter of 2007. This study could provide early evidence of the improved therapeutic index we are seeking by targeting our novel TRb agonist to the liver.