Ceragenix Pharmaceuticals Inc. (Ceragenix) is an emerging medical device company developing next generation prescription therapies and products based on its two platform technologies both of which mimic key components of the innate immune system.

Every year, 1.7 million Americans who are admitted to hospitals get an infection that they didn’t have when they were first admitted. These nosocomial or hospital acquired infections result in 99,000 deaths, poorer clinical outcomes and increased medical costs estimated at $24 billion annually. Nosocomial infections are also a major healthcare problem in Europe, Japan, India, China and the rest of the world. Many of these infections are linked to the use of indwelling medical devices such as endotracheal tubes, central venous catheters and urinary catheters which provide a breeding ground for bacteria and development of slime-like aggregations of bacteria known as biofilms which are nearly impossible to eradicate with conventional antibiotics.

Our CeraShield™ technology is designed to prevent bacterial colonization and biofilm development on medical devices. The active ingredient in CeraShield™ is CSA-13, one of the members of the class of Ceragenin™ compounds discovered by Dr. Paul B. Savage at Brigham Young University. Ceragenins™ are non-peptide functional mimics of endogenous antimicrobial peptides such as cathelicidin (LL-37) and the alpha and beta defensins. Ceragenins™ are rapidly active broad spectrum bactericidal, fungicidal and virucidal with excellent activity even against multidrug resistant strains. Ceragenix holds the worldwide exclusive license from BYU to develop and commercialize this technology. We are actively pursuing licensing CeraShield™ to leading medical device companies to incorporate into their existing product lines.

Ceragenix also hold s a worldwide exclusive license from the University of California to develop and commercialize skin barrier repair products based on Dr. Peter Elias’s pioneering invention of the optimal molar ratio to accelerate skin barrier repair. The skin’s barrier is our body’s first line of defense against pathogens and defects in the skin barrier are also associated with the dry, cracked skin characteristic of atopic dermatitis (eczema) and other skin diseases. Atopic dermatitis affects over 15 million Americans and is the most common childhood skin disorder. The U.S. market for atopic dermatitis treatments is estimated to be in excess of $800 million. EpiCeram®, is a topical non-steroidal skin care cream for the treatment of atopic dermatitis (eczema) that has shown comparable efficacy to a mid-strength steroid in a clinical study of 113 children with moderate to severe atopic dermatitis. The FDA cleared EpiCeram® for marketing and we have partnered with Dr. Reddy’s Laboratories (NYSE: RDY) to market the product in the United States. We anticipate the product to be commercially available in the second half of 2008.