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AGIX to Focus on Advancing AGI-1067 in Diabetes

[Plan B]

AtheroGenics Announces Business Plan to Focus on Advancing AGI-1067 in Diabetes
Thursday May 31, 7:00 am ET

ANDES Clinical Trial to Begin in Third Quarter 2007

Conference Call and Webcast Scheduled for 9:00 a.m. EDT Today

ATLANTA, GA--(MARKET WIRE)--May 31, 2007 -- AtheroGenics, Inc. (NasdaqGM:AGIX - News), a pharmaceutical company focused on the treatment of chronic inflammatory diseases, today announced that it will focus on diabetes as the next step in the clinical development of AGI-1067. AtheroGenics will conduct a Phase III clinical trial studying the effect of AGI-1067 in patients with diabetes named ANDES (AGI-1067 as a Novel Anti-Diabetic Agent Evaluation Study). Patient enrollment is currently projected to begin in the third quarter of 2007, and the study protocol provides for an interim analysis, which the Company expects to occur by mid-2008.

ANDES is a multi-center double-blind study with 6-month dosing across a range of doses, designed to compare the effects AGI-1067 versus placebo on glycemic endpoints in subjects with confirmed Type 2 diabetes mellitus. The trial was designed to confirm the important pre-specified diabetes findings from the Company's recently completed ARISE Phase III clinical trial. Clinical data presented in March 2007 at the American College of Cardiology demonstrated that in patients with diabetes, AGI-1067 significantly lowers both fasting plasma glucose (FPG) and glycosylated hemoglobin (A1c), the two most commonly used measures of glycemic control. In addition, in ARISE, there was a strong trend toward benefit in clinically important cardiovascular events in patients with diabetes, with a 22 percent reduction in the prespecified endpoint of cardiovascular death, resuscitated cardiac arrest, myocardial infarction (heart attack) and stroke. In a related finding, there was a 64 percent reduction in patients developing diabetes for the first time during the study, known as new onset diabetes.

"In the ARISE study, AGI-1067 exhibited encouraging effects on the pre-specified endpoints of glycemic control and in reducing cardiovascular events in over 2,200 diabetes patients," commented Russell M. Medford, M.D., Ph. D., President and Chief Executive Officer of AtheroGenics. "We believe there is a critical unmet medical need for a new diabetes agent that works toward getting patients' A1c levels to goal, while at the same time, provides cardiovascular benefits."

2007 Business Plan and Financial Guidance

In the near term, the Company intends to focus on the ANDES trial and diabetes as the next step in the clinical development of AGI-1067. As part of its revised business plan, AtheroGenics took steps to reduce its employee base by approximately 50 percent, resulting in a current staff of 67 employees. The Company is providing severance and outplacement support to employees affected by the workforce reduction. The one-time costs associated with the restructuring, including non-cash provisions for asset write downs, are estimated to be approximately $3 million.

Consistent with this new direction of conserving resources, the Company has initiated closeout activities for FOCUS, an ARISE follow-up clinical study that is funded by AstraZeneca and designed to capture extended safety data on enrolled patients who had completed participation in the ARISE clinical trial.

As of March 31, 2007, the Company had available cash and investments of approximately $130 million. AtheroGenics expects that net cash use for the remainder of 2007 will be in the range of $40-$45 million and net loss per share for the remainder of 2007 will be in the range of $0.70 to $0.85.

Webcast and Conference Call Information

AtheroGenics will be hosting a conference call and webcast today at 9:00 a.m. EDT to discuss its 2007 business plan. Participants may access the conference call by dialing 877-407-8031 (domestic) or 201-689-8031 (international). The call can also be accessed via the webcast on the Company's website at http://www.atherogenics.com. A replay of the conference call will be available approximately one hour after its conclusion by dialing 877-660-6853 (domestic) or 201-612-7415 (international), account number 286 and conference ID number 244048. The call will be archived until June 7, 2007.

http://biz.yahoo.com/iw/070531/0259795.html