Biotech Values

[DewDiligence]

VLTS is down 85% in pre-market trading
on news of failure in PAD, an indication
that has been eating biotech companies alive.
At least VLTS is not blaming the bad outcome
on a better-than-expected placebo arm; the
drug itself simply didn’t work and the PR
says this in plain English. (VLTS was another
pump job by Business Week’s Gene Marcial
[#msg-10693254], whose latest pump was
ANDS. As I’ve noted on various occasions,
Marcial is a pretty good contrary indicator.)

http://biz.yahoo.com/prnews/060711/sftu051.html?.v=63

>>
Valentis Announces Results of VLTS 934 Phase IIb Trial

Tuesday July 11, 7:00 am ET

BURLINGAME, Calif., July 11 /PRNewswire-FirstCall/ -- Valentis, Inc. (Nasdaq: VLTS ) announced today that no statistically significant difference was seen in the primary endpoint or any of the secondary endpoints in its Phase IIb clinical trial of VLTS 934 in peripheral arterial disease (PAD). The primary efficacy endpoint in the study was improvement in exercise tolerance on an escalating grade treadmill after 90 days in patients receiving VLTS 934 versus patients receiving placebo. The trial was a randomized, double-blind, placebo-controlled Phase IIb trial of VLTS 934 versus a saline placebo in 157 patients with the intermittent claudication form of PAD.

After 90 days, there was no statistically significant change in exercise in the 78 patients receiving VLTS 934 versus the 79 patients receiving placebo. There were also no significant differences in any of the secondary endpoints of exercise tolerance at 30 days, ankle-brachial index at 30 and 90 days, total work capacity at 30 and 90 days and quality of life at 90 days. VLTS 934 was well tolerated in the trial with no definitely related severe adverse effects.

"Based on the promising results in the Phase IIa clinical trial, which utilized a virtually identical protocol, and our preclinical data indicating a viable mechanism of action, we expected the Phase IIb trial to be positive. Detailed results of the Phase IIb trial will be presented at a scientific meeting but we can report the change in exercise in the placebo group of the Phase IIb trial were very close to our assumption, but the drug group results were well below that of the Phase IIa trial. In our analysis of the available data including sub-groups, we could find no logical explanation for the difference in performance of the drug group between the two trials," stated Benjamin F. McGraw, III, Chairman, President & Chief Executive Officer. "The Company has no plans for further development of the product and is assessing strategic opportunities, which include the sale or merger of the business, the sale of certain assets or other actions."

Valentis Conference Call

Valentis will be hosting a conference call and web cast on Tuesday, July 11, 2006 at 1:00 p.m. EDT.

What: Valentis VLTS 934 Phase IIb results and future plans for the company

When: Tuesday, July 11, 2006 @ 1:00 p.m. EDT

Where: The Investor Relations section of Valentis' website (www.valentis.com)

How: Live over the internet -- Simply log on to the web at www.valentis.com.

Live via telephone -- Simply dial 866-202-3048 (domestic) or 617-213-8843 (international) and use participant code # 21430450.

Contact: Joe Markey, 1-650-697-1900 ext. 369 or [e-mail]

If you are unable to participate during the live web cast, the call will be archived at www.valentis.com until 5:00 p.m. EDT on July 18, 2006.

About Valentis

Valentis is a biotechnology company engaged in the development of innovative products for PAD, a large and unsatisfied market. PAD is due to chronic inflammation of the blood vessels of the legs leading to the formation of plaque, which obstructs blood flow. While Valentis is focusing its efforts on the development of novel peripheral arterial disease therapeutics, its technologies are being applied by its collaborators for the development of therapeutics to treat a variety of indications including infectious diseases and cancer.
<<