At the European Association for the Study of Liver Disease meeting in April 2006, our partner at that time, Valeant Pharmaceuticals International, presented the 48-week results of the completed Phase 2b clinical trial for pradefovir for the treatment of patients with hepatitis B (HBV). The results showed a statistically significant reduction of HBV DNA, a measure of viral load, at the top three doses of pradefovir evaluated in the clinical trial, as compared to the approved treatment for HBV, HepseraTM, administered at its maximum allowable dose. Both pradefovir and Hepsera are prodrugs of the anti-viral drug adefovir; however, only pradefovir uses the HepDirect liver-targeting technology. In the Phase 2b studies, pradefovir treatment, even at the highest dose tested, resulted in lower circulating levels of adefovir than did Hepsera administered at its maximum approved dose. This finding is consistent with expectations for the HepDirect prodrug technology and important because high circulating levels of adefovir may lead to renal toxicity. In fact, Hepsera is doselimited due to renal toxicity observed at high doses.

Until the end of 2006, pradefovir had been developed through a collaboration with Valeant. In December 2006, Metabasis and Valeant agreed to license and assign Valeant’s development and commercial rights to pradefovir to Schering-Plough, a company with a global reach and a long-standing commitment to the development and commercialization of products for the treatment of hepatitis.