DRUG SELECTION AND DEVELOPMENT:

Product Identification and Selection

Upon initial identification of a potential drug target, VDDI Pharmaceuticals will form a due diligence team which will work closely with VDDI Pharmaceuticals management during the diligence assessment process. The team will be responsible for 'scoring' each target according to a filter and sieving process. A product will be considered based upon the following criteria:

• Pharmacology Established: In Phase I studies, safety and initial dose selection is explored to determine the maximal tolerated dose. In addition, initial estimates of efficacy can be determined. This is especially true with "fast-track" products. For example, in the case of cancer therapies Phase I clinical studies for "fast-track" products can often be conducted with cancer patients instead of normal volunteers. VDDI Pharmaceuticals will focus on product opportunities where the pharmacology has already been established.

• Practical Development Time and Cost: There are three distinct phases of clinical testing of pharmaceutical products and each has a specific purpose. In Phase I clinical trials, the drug is administered to a small number of typically healthy volunteers (approximately 50 to 100) in order to determine a drug's safety, metabolic effects and tolerable dose levels in humans. During Phase II studies, the drug is administered to patients who suffer from the disease the drug is intended to treat. Approximately 100 to 300 patient volunteers are given the drug to determine how effective it is against the disease and to identify doses that are both effective and well tolerated. After a drug completes Phase II trials, it enters larger Phase III clinical trials. During this phase, the drug is administered to 1,000 to 3,000 patient volunteers in order to confirm its efficacy and long-term effects. The use of larger numbers of patients also helps detect infrequent side effects. If the results of the preclinical studies and clinical trials are positive, a drug company will file a New Drug Application (NDA) and submit it for FDA review. The NDA contains all the research data on the drug obtained thus far. Clinical trials are conducted within a two-to-seven year time period. Simultaneously, the Marketing Authorization Application (MAA) is prepared for non-US markets. A key factor in VDDI Pharmaceuticals' consideration of product opportunities will be the target population and indication. For example, in many orphan cancer indications it is only necessary to complete Phase II to obtain marketing approval. This directly translates into reduced time and cost for commercialization, with the clinical program often competed in 2 years In contrast, for a hypertension drug, clinical studies may take 7-10 years and include between 2000 and 3000 patients along with special populations like the elderly, and patients with kidney and liver complications.

• Fast Track FDA Approval: "Fast track" is intended to facilitate development and expedite review of drugs that treat serious and life-threatening conditions so that an approved product can reach the market expeditiously. VDDI Pharmaceuticals will look for product opportunities eligible for "fast-track" approval.

• Good Preclinical Studies: During the selection process VDDI Pharmaceuticals will examine the following areas relative to preclinical issues: Acute and multiple dose (subchronic), Chronic and/or carcinogenicity, genetic toxicology (in vitro/in vivo), reproductive toxicity (segments I, II & III), specialized studies (inhalation, phototox, arthropathy, allergenicity), safety pharmacology, absorption, distribution, metabolism and excretion (PK), and toxicokinetics (TK).
  

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