Corporate Overview

CyDex Pharmaceuticals, Inc. is a specialty pharmaceutical company focused on the development and commercialization of drugs specifically designed to address limitations of current therapies in selected established markets.  We have developed a broad portfolio of 12 product candidates utilizing our drug formulation technology using Captisol^® cyclodextrins.  Captisol cyclodextrins are a patent protected, specifically modified family of cyclodextrins designed to improve solubility, stability, bioavailability, safety and/or dosing of a number of active pharmaceutical ingredients, or APIs.  In order to maximize our internal resources, experience and technology, we are focusing on the development and commercialization of product candidates for use in the acute care hospital setting. For those product candidates that likely will entail more extensive development and commercialization efforts, we partner with established pharmaceutical or specialty pharmaceutical companies.  We also outlicense our Captisol technology to third parties for use in the development of their own products.

Historically, we have focused on the outlicense of our Captisol technology to established pharmaceutical companies for the application to, and improvement of, product candidates in their pipelines. Our technology has been validated by the launch of four Captisol-Enabled products commercialized by two of our outlicensees, Pfizer and BMS. We originally focused on this strategy in order to accelerate the commercialization of our Captisol technology and create cash flow for our company. In doing so, we have created a profitable specialty pharmaceuticals business, which has allowed us to expand our strategy to capitalize on the growth opportunities and business lines enabled by Captisol.  More recently, we have been focusing on the development of our retained product candidates for use in the acute care hospital setting, as well as our partner product candidates which we have collaborated with, outlicensed or intend to outlicense to established pharmaceutical companies for development and commercialization.

As a result of our historic focus on Captisol outlicensing, revenues derived from Captisol outlicensing accounted for 98%, 95%, 78% and 93% of total revenues during 2004, 2005, 2006 and the first nine months of 2007, respectively.  However, with the execution of three agreements for our partner product candidates in 2006 and 2007, we expect to derive a significant portion of our future revenues from our partner product candidates.  We do not expect to have any revenues from retained products sales until at least 2010.  We expect our revenue over the next several years to be derived from milestone payments, license fees, material sales and royalties on product sales.  These payments will be conditional upon our partners’ continued development and commercialization of products using Captisol and the signing of new agreements.

In 2004, we implemented a general program of providing a limited clinical use agreement for companies early in the development process, which simplifies processing within pharmaceutical companies developing new compounds utilizing Captisol.  Pursuant to this type of agreement, the licensee is granted a limited license to use Captisol in small Phase I human clinical trials and we agree to supply a specified quantity of Captisol to the licensee for such clinical trials.  This change in our Captisol outlicensing effort has resulted in many new development efforts, and is a primary contributor to the significant increase in material sales since 2004.

CAPTISOL and Captisol-Enabled are registered trademarks of CyDex Pharmaceuticals, Inc.