Antifungals for Chronic Sinusitis

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Accentia Biopharmaceuticals Receives Extension of Exclusive Option

to License All Antifungals for Chronic Sinusitis

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TAMPA, Fla.--(BUSINESS WIRE)--Jul 24, 2006 - Accentia

Biopharmaceuticals, Inc. (NASDAQ:ABPI) has signed an amendment to

its exclusive option agreement with the Mayo Foundation for Medical

Research and Education (Mayo Clinic) to license any and all

intranasal antifungals for chronic sinusitis. The amendment extends

the exclusive option agreement an additional year and will expire

December 6, 2007 beyond the anticipated date of an NDA filing for

SinuNase. Accentia is developing SinuNase under an exclusive

worldwide license with the Mayo Clinic for the use of intranasal

amphotericin B for refractory chronic sinusitis.

From the date of the amendment's signing until the expiration of the

contract in 2007, Accentia has the exclusive option to license any

and all antifungals, including prescription and non-prescription or

over-the-counter intranasal products.

There is no drug currently approved by the United States Food and

Drug Administration (FDA) for the treatment of chronic sinusitis in

this country. Yet, there are an estimated 31 million affected

patients and approximately 500,000 sinus surgeries performed each

year for chronic sinusitis.

" The extension of this exclusive licensing option agreement beyond

the anticipated filing date of our NDA is a positive step forward

for Accentia, as we continue our development of SinuNase. SinuNase

has received Fast Track status from the FDA and is the first and

only drug to ever reach the final phase (phase 3) of clinical trials

for chronic sinusitis, " said Dr. E. O'Donnell, Jr., Accentia

Chairman and Chief Executive Officer. " We currently have

approximately 60 clinical sites screening patients for candidates

for inclusion in our phase 3 studies. In addition to pursuing

prescription antifungal formulations such as SinuNase for severe

chronic sinusitis, we are also evaluating the commercialization of

non-prescription, over-the-counter formulations with the requisite

antimycotic activity for more mildly affected patients. "

Dr. O'Donnell continued, " We have spent substantial time and

personnel over the last two years educating specialists about the

fungal etiology of chronic sinusitis, and our recent national survey

suggests that a significant majority of ENTs and Allergists now have

adopted this paradigm shift. These educational efforts have been

enhanced by the commercialization of our patented CRS Fungal Profile

test which is the only lab test available for the diagnosis of

chronic sinusitis. "

Company Update

Accentia recently announced the successful refinancing of a pre-

existing $5M mezzanine financing which had reached maturity after 4

years. This refinancing will support its specialty pharmaceuticals

business which just launched its first patent-protected product, the

MD Turbo. The MD Turbo is the only breath-actuated delivery device

for pressured metered dose inhalers (MDIs). It uniquely addresses a

large unmet clinical need. There are approximately 80M MDIs

dispensed each year for bronchodilators and steroids to the 30M

patients with asthma or chronic obstructive pulmonary disease

(COPD). Correct administration of these MDIs requires that the

patient have rather precise coordination between manual firing of

the MDI and the patient's breathing in. The MD Turbo eliminates this

uncertainty of drug delivery by automatically firing the MDI when

the patient's inspiration reaches a predetermined flow rate. This

feature helps to get the drug into the lungs. The reception of MD

Turbo by payers, physicians and patients has been very positive. MD

Turbo is a prescription product dispensed from pharmacies and

covered under routine pharmaceutical benefits as opposed to major

medical.

Background on Chronic Sinusitis

Chronic sinusitis (CS), also known as chronic rhinosinusitis (CRS),

is one of the most common diseases, affecting an estimated 31

million patients in the U.S. alone. Chronic sinusitis is defined as

inflammatory disease of the nasal and sinus mucosa that persists for

three months or longer. Long-term consequences include the formation

of inflammatory polyps in the nose. Symptoms of inflammation caused

by chronic sinusitis include nasal congestion, mouth breathing,

nasal discharge, and post-nasal drip. Patients often also experience

recurrent bouts of acute bacterial sinusitis, characterized by

fever, malaise and pain that require treatments with systemic oral

antibiotics and which cause them to miss work or miss school.

Although these acute bacterial superinfections typically respond to

antibiotics, the chronic underlying condition does not.

The diagnosis and treatment of the underlying chronic sinusitis (CS)

or chronic rhinosinusitis (CRS) remains challenging. As we mentioned

earlier, there are no prescription pharmaceuticals, including any

antibiotics, approved for this condition. Furthermore, the FDA has

instructed manufacturers of over-the-counter (OTC) decongestant

products claiming to treat sinus disease to stop making these claims

for their products by April 2007.

Diagnosis of CS/CRS is based on the patient's history, nasal

endoscope examination, and a CT scan of the sinuses. A major

obstacle to the rational design of a laboratory diagnostic and

pharmaceutical treatment has been the lack of a plausible theory of

causation. Accentia Biopharmaceuticals' efforts to develop and

commercialize a standard diagnostic test and treatment for chronic

sinusitis is based on research at the Mayo Clinic and subsequently

published in peer-reviewed journals.

Why Mold Can Cause Problems

Mayo Clinic investigators discovered that Alternaria, a ubiquitous,

normally innocuous mold that colonizes the mucus of the nose and

sinus of virtually everybody, elicits in many patients with chronic

sinusitis an eosinophilic (inflammatory) response, characterized by

the release of a Major Basic Protein (MBP) in the mucus. This

protein damages the mucosal lining of the nose and sinuses, and

leads to inflammatory changes in mucosal tissues characteristic of

chronic sinusitis. In these patients with chronic sinusitis, the MBP

of mucin is elevated, while it is undetectable in those who are not

susceptible ( " normals " ), or in patients who have just seasonal or

perennial allergic rhinitis.

Based on their laboratory observations and results, investigators at

Mayo developed a unique diagnostic test for chronic sinusitis, which

involved testing mucin for MBP. Accentia is making this diagnostic

available commercially as CRS Fungal Profile. This reference lab

test is intended to be an adjunct to the clinical and radiological

diagnosis of chronic sinusitis.

Intranasal Application of Amphotericin B

Investigators at Mayo and elsewhere have published small clinical

studies on the efficacy and safety of using a low dose antifungal

applied intra-nasally. In particular, they have reported on the use

of a lavage of 0.01% Amphotericin B for the treatment of the

symptoms and signs of chronic sinusitis. With the inciting role that

the fungal antigen plays in the chronic inflammatory response of the

mucosa, it appears that a muco-administered antifungal takes a few

weeks to maximize the response. In one published study at Geneva

University, for example, intranasal amphotericin B 0.01% was applied

for four weeks, and among patients with partial nasal obstruction

from polyposis, about 50% of patients had complete resolution of

their polyps.

Under an IND, Accentia is now developing a low dose intranasal

lavage formulation of Amphotericin B (SinuNase) for the

treatment of the signs and symptoms of chronic sinusitis. The

initial study population is in refractory patients who have

undergone sinus surgery for chronic sinusitis but who are struggling

with recurrent chronic sinusitis. These four-month randomized,

double-blind, placebo-controlled clinical trials are designed to

test the efficacy and safety of this particular intranasal

antifungal for this indication. One of the compelling reasons that

Accentia chose Amphotercin B is that it has an extremely low

absorption across mucus membranes. Since, in this situation,

absorption of the drug into the sinus mucosa is not needed,

SinuNase's desired site of action will be confined to the mucus

layer.

More information on the diagnostic CRS Fungal Profile is

available by calling Accentia's laboratory partner, IMMCO, at 800-

537-8378. For more information on Accentia and SinuNase please visit

http://www.accentia.net.