FAQ

Nearly 15 years ago, Dr. Plachetka created POZEN Inc. to develop new pharmaceutical products utilizing an innovative and efficient new business model for small pharmaceutical companies. A key element of his vision was his belief that combining two known mechanisms of action would often produce a superior product, with either greater efficacy, improved safety, or both, and would generate a higher hit rate than basic test-tube research.

After initially focusing on improving the acute treatment of migraine, the company has expanded into the treatment of other pain-related diseases, cardiovascular disease, as well as exploratory work in the prevention of cancer.

POZEN completed several development programs for combination products for the acute treatment of migraine. One of those products, Treximet^® (sumatriptan and naproxen sodium), was approved by Food and Drug Administration (FDA) in 2008 and is now the 4th leading branded product based on total expected 2009 sales.

An NDA is currently under review at FDA for VIMOVO™, an innovative new combination product for the treatment of osteoarthritis, rheumatoid arthritis and ankylosing spondylitis, for patients who are at risk for developing non-steroidal anti-inflammatory drug-associated gastric ulcers.

POZEN is currently in Phase 3 development for an innovative combination product designed to deliver the benefits of aspirin to patients who use it for the secondary prevention of strokes or cardiovascular events, but who are at risk for developing a gastric ulcer.

In April 2008, FDA approved Treximet^® for the acute treatment of migraine attacks, with or without aura, in adults. The product is formulated with POZEN’s patented technology of combining a triptan with a non-steroidal anti-inflammatory drug (NSAID) and GlaxoSmithKline’s (GSK) RT Technology™. This migraine medication works in two ways – the triptan component shrinks the swollen blood vessels in the head, which correlates to the relief of migraine pain, while the NSAID component inhibits the enzyme responsible for the production of prostaglandins, which are the mediators of pain and inflammation. As a result of this dual mechanism of action, Treximet^® has been shown to provide superior sustained pain relief compared to placebo and to both of the single mechanism of action components. The FDA approval was an important milestone for the partnership between the two companies. The partnership began in 2003, when GSK signed an agreement with POZEN for the development and commercialization of this product.

In May 2008, POZEN officially transferred the IND and NDA for the product to GSK. GSK is responsible for the commercialization of Treximet^® in the US. POZEN receives royalties based on net sales of Treximet^®from GSK and, beginning January 1, 2010, that royalty rate will more than triple to 18%. POZEN also has ex-US rights to develop and market a lower-dose sumatriptan and naproxen combination.

Another major licensed product program is for VIMOVO™, an investigational product under development by AstraZeneca (AZ) and POZEN that combines enteric coated naproxen (an NSAID) with immediate-release esomeprazole, a proton pump inhibitor (PPI). VIMOVO™ is under investigation for the treatment of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis in patients who are at risk of developing NSAID-associated gastric ulcers. On August 31, 2009, the FDA informed AZ and POZEN that it had accepted the NDA for VIMOVO™, submitted on June 30, 2009. AZ submitted a Marketing Authorization Application (MAA) to the European Union via the Decentralized Procedure for VIMOVO™ on October 16, 2009.

POZEN is creating a safer form of aspirin franchise of product candidates – the PA product platform. The PA family of product candidates is intended to significantly reduce GI ulcers and other GI complications compared to taking aspirin alone.

The first product candidate is PA32540. It is a coordinated-delivery tablet combining immediate-release omeprazole, a PPI, layered around pH-sensitive aspirin. This novel, patented product is administered orally once a day and, if approved, will be indicated for use for the secondary prevention of cardiovascular disease. POZEN started enrolling patients in two pivotal Phase 3 trials and a long-term, open-label safety trial for secondary cardiovascular disease (CVD) prevention in October 2009.

Additionally, POZEN is considering investigating PA32540 for the secondary prevention of colorectal neoplasias (secondary recurrence of colonic polyps). PA32540 may improve the risk/benefit of aspirin therapy in this population and could provide an important agent for the chemoprevention of colon neoplasias.

The POZEN pipeline also includes earlier-stage work evaluating the application of aspirin combinations for pain and pain-related conditions.

Secondary Prevention of Cardiovascular disease

PA is currently being investigated for the secondary prevention CVD. It is estimated that 80 million people in the US have one or more forms of CVD. Coronary heart disease affects almost 17 million people and causes about 445,000 deaths annually. It is the leading single cause of death in the US. Each year about 600,000 people experience a stroke and 185,000 people have a recurrent stroke. Approximately 144,000 people die from stoke each year.

Aspirin is the gold standard in anti-platelet therapy and is already incorporated into the American Heart Association (AHA) clinical guidelines for the secondary prevention of cardiovascular events. About 50 million Americans use aspirin regularly for cardiovascular disease prevention.i

PPIs such as omeprazole are likewise recommended for concomitant use in patients on anti-platelet therapy at risk for GI bleeding, as recommended by AHA and the American College of Gastroenterology (ACG). Our task is to broaden education around these established guidelines and provide products that make it easier for both doctors and patients to comply with them.

Secondary prevention of colorectal cancer

POZEN is also considering investigating PA the secondary prevention of colorectal cancer (CRC). CRC is the second most common cancer in developed countries with a lifetime risk of five percent. In the US there were 149,000 new cases and 50,000 related deaths in 2008.ii

Adenomas are precursors of most colorectal cancers and prevention of adenomas will most likely also prevent colorectal cancers. More than 80 percent of colorectal cancers arise from adenomatous polyps.iii

Over the past 30 years, compelling data have emerged suggesting that aspirin can suppress carcinogenesis in the large bowel.iv In 2008, the 5th International Conference on Cancer Prevention produced an international consensus statement that “evidence clearly shows a chemopreventive effect for aspirin.”

Other pipeline products

The POZEN pipeline also includes earlier-stage work evaluating the application of aspirin combinations for pain and pain-related conditions.

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i Campbell CL, Smyth S, Montalescot G, and Steinhubl SR. Aspirin dose for the prevention of cardiovascular disease. JAMA 2007; 297:2018-2024
ii Jernal, 2008
iiii USPSTF, 2007
iv Cole, 2009

Currently, POZEN has several sources of revenue – milestone payments and royalties. When we have engaged a partner to take our new product candidate to market in the past, we received an upfront payment. Under our existing agreements, we receive additional payments when we meet certain milestones during the development of the product. The amount and timing of these payments depends on when in the development cycle we engage the partner. Typically, once our partner begins to sell the drug, we receive royalties (as is the case with Treximet^®, which is an agreed-upon percentage of net sales of that product). Our products and product candidates include Treximet^®, licensed to GSK, and VIMOVO™, licensed to AZ.

POZEN also has ex-US rights to develop and market a lower-dose sumatriptan and naproxen combination.

POZEN pioneered the concept of a strategic outsource drug development company whose products would be marketed by strong commercial partners. This model has allowed POZEN to commit its resources to developing new products and avoid the high costs associated with basic research, manufacturing, and marketing. By virtue of the initial upfront payments, milestone payments, and ongoing royalties from partnerships, POZEN has been totally self-funding since its 2000 initial public offering (IPO).

POZEN is evolving from solely a product development company into a company that will retain control of the commercialization of its pipeline going forward. We will utilize revenues from licensing and development agreements to fund the development and commercialization our own pipeline, beginning with our next generation of product candidates – the PA aspirin franchise. We believe this model will allow us to increase POZEN’s future potential revenues and profits and deliver better shareholder value.

POZEN intends to stay at the leading edge of change in the pharmaceutical industry. To accomplish that, we are building a 21st century pharmaceutical company – evidence-based, patient-centered, efficient and cost-effective. Instead of trying to emulate the “old school” approach, now being abandoned by the major pharmaceutical companies, POZEN is taking a fresh approach to sales, marketing and medical education. This will allow us to deliver high-quality, evidence-based, and affordable products to our customers while also providing shareholders with an appropriate return on investment.

Our commercialization approach will continue POZEN’s successful corporate philosophy of owning core capabilities and strategically partnering for the rest. To realize our aspirations, we will acquire some of the most experienced, top commercial talent from either the pool that big pharma is shedding to reduce costs, or from other successful smaller pharma companies. Strategic partners who are the best at what they do will be engaged for the execution of various commercial elements.

Technology and social media are completely changing the way healthcare professionals and patients communicate and receive new information. We will take advantage of these trends and make use of these cutting-edge communication technologies to engage in meaningful and educational dialogues with a broad base of customers (patients, physicians, and payors) in cost-effective ways previously not possible.

Our leading-edge pharmaceutical company model will allow us to develop and deliver high-quality, safe and effective branded products at prices that are more affordable than big pharma branded products. This will maximize patient access and their ability to afford our products.

We will seek strong commercialization partners for the markets outside of the US.

POZEN is listed on the NASDAQ Exchange under the symbol POZN.

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