Pfizer Ophthalmology

In March 2006, NicOx signed a major new agreement that granted Pfizer Inc the exclusive right to apply its proprietary nitric oxide-donating technology to drug discovery research in the field of ophthalmology. Under the terms of the agreement, Pfizer paid NicOx an upfront technology license fee of €5 million and made a €15 million equity investment in the Company during 2006. The agreement provides for total potential milestone payments in excess of €300 million in the ophthalmology field, of which €102 million would arise from the successful full development and launch of the first compound.

Pfizer has also paid NicOx €6 million in research funding since signature, in the form of two annual payments of €3 million in 2006 and 2007. In January 2008, NicOx announced it has signed a one-year extension of the agreement that will result in NicOx receiving a further €3 million in research funding in 2008. Pfizer now has the option to obtain an exclusive worldwide license to develop and commercialize compounds resulting from the research program, in the field of ophthalmology, until May 2009.

In August 2004, NicOx signed its first agreement with Pfizer which is focused on the research and development of nitric oxide-donating derivatives of prostaglandin F2-alpha analogs for the treatment of glaucoma. In November 2005, Pfizer selected PF-03187207 as the development candidate from this agreement and subsequently initiated the first clinical study for this compound in March 2007.

This trial is a phase 2 proof-of-concept study designed to assess the safety and efficacy of PF-03187207 to Xalatan® (latanoprost) in terms of intraocular pressure lowering (IOP, pressure within the eye) in patients with glaucoma and ocular hypertension. Xalatan® is a proprietary Pfizer product and the leader in worldwide glaucoma sales, with approximately $1.6 billion of franchise sales in 2007. The initiation of this clinical trial follows the granting of an Investigational New Drug (IND) approval by the US Food and Drug Administration for this candidate. Pfizer is responsible for funding the future work on PF-03187207. Including the €1 million milestone payment related to the granting of the IND for PF-03187207, NicOx has received €5 million from Pfizer to date in connection with this first agreement and stands to receive an additional €32 million, plus royalties, if the collaboration results in the successful commercial development of a product.

Merck & Co, Inc. Cardiovascular

In March 2006 NicOx signed a major new, exclusive worlwide license agreement with Merck & Co., Inc. to collaborate on the development of new antihypertensive drugs using NicOx’ proprietary nitric oxide-donating technology. This agreement follows the successful completion of the companies’ research collaboration started in August 2003, which has generated promising results showing that nitric oxide donation can improve the efficacy of antihypertensive agents in in vivo models.

The agreement covers nitric oxide-donating derivatives of several major classes of antihypertensive agents for the treatment of high blood pressure, complications of hypertension, and other cardiovascular and related disorders. Merck has the exclusive right to develop and commercialize antihypertensives that use NicOx’ nitric oxide-donating technology for the treatment of systemic hypertension. NicOx has the option to co-promote on a fee for detail basis products that result from the agreement to specialist physicians, such as cardiologists, in the United States and certain major European countries. In addition, Merck will pay NicOx industry standard royalties on the sales of all products resulting from the collaboration.

NicOx will have been received from Merck €19,2 million of which an upfront payment of €9.2 million and €10 million milestone payment since the beginning of 2007 (divided in €5 million milestone payment in July for the initiation of the first phase 1 trial in the clinical program for the first development candidate previously selected by the two companies and other €5 million milestone payment in January linked to the initiation of Good Laboratory Practice (GLP) toxicology studies on this candidate). NicOx stands to receive €269 million in further potential milestone payments, plus royalties.