DRUG SELECTION AND DEVELOPMENT:

Product Identification and Selection (continued)

• Manufacturing Strategy: A critical step in selection of a product will be an estimate of its manufacturing technology, with emphasis on the ability to manufacture within at least two FDA approved good manufacturing practice (GMP) facilities. Other considerations in selection include the inherent cost of goods (COG) to manufacture and an estimate of the continued availability of raw materials required to manufacture the product at full production.

• Pharmaceutical Elegance Issues: In order to fulfill a market need and provide a sustainable presence, the product must have inherent or formulated properties that allow for convenient dosing schedules, good absorption from the GI tract, and stability under conditions of normal storage and usage. An ideal oral product will have minimal metabolites whether active or inactive. The more metabolites, the more questions relative to toxicology and drug interaction issues are raised. It will also have good bioavailability and a dosing schedule of once or twice daily. In addition, the ideal product should be made in tablets dosage forms instead of capsules to reduce the cost of manufacturing. Significant emphasis will be placed on a product that demonstrates a positive benefit in pharmcoeconomics, i.e., a favorable comparison of costs and benefits relative to the competition or standard of care in the care of the disease state.

• Markets: VDDI Pharmaceuticals will give preference to products with a potential global market of $200-500 million annually. VDDI Pharmaceuticals will examine closely the conditions for a favorable market in the context of the competitive pipeline, i.e., VDDI Pharmaceuticals would like to be either a market leader or within the top three. A product with known competition will be considered if it can be reasonably shown that it will have a hook in the market for significant superiority in claims relative to the competition. In many instances VDDI Pharmaceuticals will focus products with a narrow initial indication, with the possibility of securing a broad application in the future with expanded royalty-streams. Concurrent with the development of the products, VDDI Pharmaceuticals will identify a marketing partner.

• Development Cost: The cost for development through Phase II will vary by the indication and therapeutic target. VDDI Pharmaceuticals will not develop compounds beyond Phase II to avoid the larger costs associated with Phase III clinical studies.

• Intellectual Property: VDDI Pharmaceuticals will determine if the compound under consideration is protected by a secure patent position, including the potential for global patent registration.

The virtual model allows VDDI Pharmaceuticals to tailor effective project teams according to the unique needs of the development program, by integrating the services provided with a team of specialized vendors. VDDI Pharmaceuticals will derive its income from royalty or marketing agreements associated with the development of pharmaceutical and biopharmaceutical products. VDDI Pharmaceuticals' management team is uniquely positioned to execute acquisitions because of its depth of experience in global pharmaceutical development.

Licensed Products will be developed from pre-clinical to Phase II trials by the drug development partnerships. Once products complete Phase II trials they will be licensed to third parties.

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