KOSAN Biosciences, Inc.'s Second-Generation Hsp90 Inhibitor, Alvespimycin, Shows Antitumor Activity In Refractory Leukemia

HAYWARD, Calif., Dec. 11 /PRNewswire-FirstCall/ -- Kosan Biosciences Incorporated presented results from a Phase 1 clinical trial of its second-generation Hsp90 inhibitor, alvespimycin HCl (KOS-1022), showing encouraging signs of anti-leukemia activity in a highly refractory patient population and tolerable toxicity. The data were presented in a poster session on Sunday, December 10, 2006, at the American Society of Hematology (ASH) 48th Annual Meeting and Exposition, held in Orlando, Florida. Data were presented by Jeffrey Lancet, M.D., H. Lee Moffitt Cancer Center, Tampa, FL in a presentation entitled, "Phase 1, Pharmacokinetic (PK) and Pharmacodynamic (PD) Study of Intravenous Alvespimycin (KOS-1022) in Patients with Refractory Hematological Malignancies."

"Alvespimycin's ability to induce clinical responses in AML patients with highly refractory disease and the compound's tolerability suggests broad therapeutic potential," said Dr. Lancet. "We strongly support continued development of alvespimycin in an expanded clinical setting."

"We believe that in this Phase 1 trial of alvespimycin as monotherapy in hematological malignancies, we have observed a clear and encouraging signal of activity and an attractive safety profile," said Robert G. Johnson, Jr., M.D., Ph.D., Kosan's President and Chief Executive Officer. "We plan to explore the full potential of this exciting and promising compound in later-stage trials in a variety of tumor types."

Hsp90 inhibitors are a new class of compounds that work through a novel mechanism of action. Hsp90 is a protein chaperone that binds to several sets of signaling proteins, known as "client proteins." These client proteins include a "who's who" list of cancer-relevant targets such as mutated p53, Bcr-Abl, Raf, ErbB2 and other kinases, as well as steroid hormone receptors. Disruption of the Hsp90-client protein complexes leads to proteasome-mediated degradation of client proteins and cell death.

Alvespimycin is a second-generation Hsp90 inhibitor that has enhanced pharmaceutical properties compared to Kosan's first-generation Hsp90 inhibitor. It is three-to-five times more potent and has a half-life of about 30 hours, allowing for less frequent dosing. Alvespimycin is orally bioavailable, making oral dosing possible. It is water soluble and can easily be formulated in both an intravenous and oral forms.

Phase 1 Alvespimycin Results

The objectives of the Phase 1 dose-escalating trial were to define a Phase 2 dose of alvespimycin, assess safety, analyze the pharmacokinetics and pharmacodynamics of the compound, and identify any early signs of activity. Dose escalation in the trial ranged from 8-32 mg/m2. Patients received alvespimycin via one hour infusion two times per week for two out of three weeks. The trial enrolled 24 patients, 23 of whom had acute myelogenous leukemia (AML). All had received prior chemotherapy regimens (median of two prior regimens), and 10% had received bone marrow transplants. Of the 17 relapsed or primary refractory patients evaluable for response,

* Three patients had a complete response (CR) with incomplete hematological recovery: -- Two patients with CRp (complete response with incomplete platelet recovery; treated at 8 and 24 mg/m2); -- One patient with CRi (complete response with incomplete blood count recovery; treated at 16 mg/m2); * One patient had bone marrow blast cell reductions >50% (with incomplete platelet recovery) and went on to receive transplant (treated at 24 mg/m2).

The pharmacokinetic analysis indicated a half-life of 20-30 hours and extensive volume of distribution. The pharmacodynamic analysis showed clear evidence of an increase in Hsp70 in bone marrow cells, a biomarker for Hsp90 inhibition, but apoptosis was only observed in the CD34+ bone marrow blasts.

Common toxicities, which were manageable and reversible, included fatigue, diarrhea, and arthralgia. Two patients with significant cardiac co-morbidity experienced cardiac toxicity at the highest dose (32 mg/m2). Drug-related toxicity at the 24 mg/m2 dose level was unremarkable.

Phase 2 Trials of Alvespimycin to Begin First Half 2007

Alvespimycin administered intravenously is also being studied in several solid tumor trials using different dosing schedules, in hematologic malignancies, and in breast cancer in combination with Herceptin(R) (trastuzumab). Oral dosing of alvespimycin is being tested in a Phase 1 trial in solid tumors.

Kosan expects to advance alvespimycin toward a registration path in metastatic breast cancer in 2007. The company anticipates initiating a Phase 2 trial of alvespimycin as monotherapy in patients with metastatic breast cancer in the first half of 2007 with subsequent Phase 2/3 trials investigating the combination of alvespimycin and Herceptin. Alvespimycin may have utility in other cancers, including hematologic, colon, lung and prostate cancer as well as adjuvant therapy in metastatic breast cancer. Kosan anticipates conducting clinical trials in additional indications in the future.

About Kosan

Kosan Biosciences is a biotechnology company advancing two new classes of anticancer agents through clinical development - Hsp90 (heat shock protein 90) inhibitors and epothilones. Kosan is leveraging its proprietary discovery platform to generate a pipeline of potentially significant product candidates, primarily in the area of oncology.

Hsp90 inhibitors have a novel mechanism of action targeting multiple pathways involved in cancer cell growth and survival. Tanespimycin (KOS-953) is currently in Phase 1 and 2 clinical trials, primarily for multiple myeloma in combination with Velcade(R)(bortezomib) and HER2-positive metastatic breast cancer in combination with Herceptin(R). In addition, intravenous and oral formulations of Kosan's second-generation Hsp90 inhibitor, alvespimycin (KOS- 1022), are being evaluated in Phase I clinical trials.

Epothilones inhibit cell division with a mechanism of action similar to taxanes, one of the most successful classes of anti-tumor agents. KOS-862 is currently being studied in a Phase 2 single-agent clinical trial in patients with HER2-positive metastatic breast cancer, as well as a Phase 2 combination trial with Herceptin. KOS-1584, a second candidate designed to improve pharmacokinetics, is in Phase 1 clinical trials in patients with solid tumors. Kosan's epothilone program is partnered with Roche through a global development and commercialization agreement.

For additional information on Kosan Biosciences, please visit the company's website at http://www.kosan.com.

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "Act"). Such forward-looking statements include but are not limited to statements relating to the further development and potential safety, efficacy and registration of alvespimycin (KOS-1022); and Kosan's development plans with respect to alvespimycin, including but not limited to Kosan's plans with respect to initiations of clinical trials for alvespimycin and the timing thereof. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of Kosan to differ materially from those indicated by these forward- looking statements, including, among others, risks related to the clinical advancement of Kosan's product candidates, including the risk that clinical trials may not demonstrate safety and efficacy sufficient to obtain the requisite regulatory approvals or to result in a marketable product; risks related to Kosan's and its collaborators' ability to timely commence and complete clinical trials; and other risks detailed from time to time in the Company's SEC reports, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and other periodic filings with the SEC. Kosan does not undertake any obligation to update forward-looking statements.

NOTE: Herceptin(R) (trastuzumab) is a registered trademark of Genentech, Inc., and Velcade(R) (bortezomib) is a registered trademark of Millennium Pharmaceuticals, Inc.

Kosan Biosciences Incorporated

CONTACT: Gary S. Titus, Chief Financial Officer, +1-510-731-5373,titus@kosan.com; or Jane Green, +1-510-731-5335 (office), +1-415-652-4819(mobile), green@kosan.com, both of Kosan

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