Cephalon, Inc. and Alba Therapeutics Corporation, a privately held
biopharmaceutical company, today announced that the companies have signed an
agreement providing Cephalon with an option to purchase all of Alba’s assets
relating to larazotide acetate, a tight junction modulator, progressing toward
a Phase IIb clinical trial for the treatment of celiac disease. Under the terms
of the option agreement, Cephalon will pay Alba a $7 million upfront option
payment and will provide a credit facility to fund Alba’s Phase IIb clinical
trial expenses for larazotide acetate.

Cephalon may exercise its option at any time prior to the expiration
of a specified period after receipt of the final study report for the Phase IIb
clinical trial. If Cephalon exercises its option, the company will purchase
Alba’s assets for $15 million. Alba could receive additional payments related
to regulatory and sales milestones.

“We are encouraged by the data that we have evaluated,”
said Kevin Buchi, Cephalon’s CEO. “Alba will now initiate a Phase IIb
trial utilizing a more disease specific primary endpoint. If successful,
larazotide acetate will add to our pipeline in immunology and has the potential
to be the first pharmacologic therapy available to treat patients who endure
this often serious condition.”

“Celiac disease affects approximately three million people in
the US
and 15 million worldwide. For the past six years Alba has been working
diligently to research and develop larazotide acetate, a new oral peptide that
has been tested in approximately 450 patients with celiac disease. We are
excited to work with our partner Cephalon. Their passion and experience goes
hand in hand with bringing new medicines to the market for patients who suffer
from this disease,” said Wendy Perrow, President and COO of Alba
Therapeutics.