Zacharon Pharmaceuticals, Inc. today announced that the
company has entered into a strategic research collaboration with Pfizer Inc. to
develop drugs for orphan diseases, including lysosomal storage disorders. The potential
value of the collaboration to Zacharon is approximately USD $210 million.

The collaboration includes the potential development of
compounds that may be discovered using Zacharon’s innovative platform for
developing small molecule drugs targeting specific carbohydrate polymers or glycans.

Zacharon, whose sole venture investor is Avalon Ventures,
will receive up-front payments and research and development funding under the collaboration
to develop drugs against targets that impact lysosomal storage diseases.
Zacharon is also eligible under the collaboration for payments for meeting
development milestones, plus royalties and sales milestones upon
commercialization.

“We are very pleased to be working with Pfizer, which
has broad compound development expertise, including in the area of small molecules,
which should be quite useful to developing drugs for these orphan
diseases,” said Robin Jackman, Ph.D., president and CEO of Zacharon.
“The collaboration provides validation for the potential that lies in
Zacharon’s broadly applicable technology platform.” Ed Mascioli, M.D.,
head of Pfizer’s Orphan & Genetic Diseases Unit, said: “Part of
Pfizer’s Orphan & Genetic Diseases Unit’s strategic focus relies on
collaborations with companies like Zacharon that have promising technologies to
help develop treatments for rare diseases.

Zacharon is an ideal partner, and we look forward to working
with them to develop treatments for lysosomal storage diseases.”