Orphagen Pharmaceuticals announced today that it has been awarded a two
year federal grant to further characterize a novel class of small molecule drugs with potential to treat
circadian rhythm sleep disorders and more serious psychiatric illnesses, such as anxiety, depression or
psychosis. The grant is a Phase 2 award within the SBIR (Small Business Innovation Research) program of
the National Institutes of Health (NIH). SBIR Phase 2 grant awards are awarded based on successful
completion of a SBIR Phase 1 proof-of-principle study, a strong commercialization strategy, and a detailed
research plan. The award will total approximately $1.2 million at the end of two years.

“This is Orphagen’s first SBIR Phase 2 grant. It demonstrates once again Orphagen’s leadership in the
orphan nuclear receptor area and the value of its first-to-ligand strategy. Our first major program for
autoimmune disease was partnered with Japan Tobacco in 2008. The NIH funding will allow us to move
closer to commercialization with a second program, this time in CNS disorders,” said Scott Thacher, CEO
and founder of Orphagen.

ABOUT ORPHAGEN – Orphagen works with potential drug targets also known as orphan receptors, for which small molecule
ligands or drug-like molecules have yet to be identified. Its goal is to identify, characterize, and position a
new class of drug so that pre-clinical and clinical development can be initiated with a partner in the
pharmaceutical industry. The partner, in return, has the opportunity to be first to market with a new class of
therapy. Orphagen’s targets come from the nuclear receptor family ligand-activated transcription factors.
On a per target basis, the nuclear receptors are one of the most successful target classes known to the
pharmaceutical industry.

The description of the proposed research reads in part, “Circardian regulation of behavorial, metabolic, and
endocrine function is a fundamental homeostatic process. Disruption of the circadian clock has been linked
to sleep and psychiatric disorders at the genetic and molecular level. We initiated a drug discovery
program…[for an orphan]…receptor that appears to have a role in the circadian cycle and in affective
disorders. Current therapies for sleep and psychiatric disorders are inconsistent in their effectiveness. The
project offers the first opportunity to develop . . . drugs to a novel target that emerged from fundamental
investigations of the circadian clock molecular mechanisms.”