QUATRX PHARMACEUTICALS ANNOUNCES MERGER WITH HORMOS MEDICAL

Merger expands QuatRx’s development portfolio targeting major metabolic/endocrine diseases associated with aging.

[Released May 16, 2005]

ANN ARBOR, MI and TURKU, FINLAND—QuatRx Pharmaceuticals Company, a privately-held biopharmaceutical company developing new therapies to treat cardiovascular, metabolic and endocrine diseases, has announced a merger with Hormos Medical Corporation, a biopharmaceutical company based in Turku, Finland, focused on research and development of products to treat endocrine disorders associated with aging.  Under the terms of the transaction, Hormos will become a wholly-owned subsidiary of QuatRx.

The combined entity, which will be known as QuatRx Pharmaceuticals, will bring together the complementary resources of the two companies and will be headquartered at the current QuatRx facility in Ann Arbor, MI, and have offices in Turku, Finland. Robert L. Zerbe, M.D., president and CEO of QuatRx, will be president and CEO of the combined company. Risto Lammintausta, M.D., Ph.D., formerly CEO at Hormos, will join the senior management team at QuatRx.

"With the added resources of Hormos in the endocrine area, QuatRx is taking a significant step forward in our strategy to develop new therapies to treat major health problems affecting millions of people worldwide.  Combined with our strong financial position and our existing product pipeline to treat metabolic and cardiovascular diseases, this transaction significantly enhances QuatRx’s efforts to build a world-class portfolio of development-stage therapeutics with significant market potential," Dr. Zerbe said.

With the completion of this transaction, QuatRx’s product pipeline will include two candidates positioned to enter Phase 3 clinical trials, two development programs positioned to enter Phase 2 trials in the next year, a candidate positioned to enter Phase 1 studies, and an expanded portfolio of earlier stage programs.

The merger with Hormos will immediately add two clinical-stage compounds to the QuatRx pipeline.  Ospemifene, a selective estrogen receptor modulator (SERM) for the treatment of conditions and symptoms associated with declining estrogen levels in postmenopausal women, is positioned to enter Phase 3 studies.  Fispemifene is a therapeutic agent for the treatment of androgen deficiency and associated conditions in aging men. QuatRx plans to initiate Phase 2 studies for fispemifene in 2005. Both therapies work to deliver the benefit of hormone treatment with a more targeted approach designed to avoid the side effects often associated with broad hormone therapy.

"The identification and development of targeted therapies with advanced tissue-specific profiles has been the core competence of Hormos.  By combining this focus with the development expertise and resources available at QuatRx, the merged organization is exceptionally well-positioned to advance a new generation of estrogen and androgen therapies that will offer significant advantages over other agents," said Dr. Lammintausta.

QuatRx is also continuing to develop its pipeline of product opportunities in dyslipidemia.  QuatRx’s lead dyslipidemia products, QRX-401 and QRX-431, have novel dual mechanisms of action designed to reduce the levels of LDL and Lp(a), both independent markers for premature coronary heart disease.   QRX-401, currently in advanced Phase 1 trials, is positioned as an alternative treatment option for use alone or in combination with statins, fibrates and other current lipid treatment programs.  QRX-431, which is undergoing preclinical studies, works as an agonist on a specific thyroid receptor, helping to increase metabolism without creating negative cardiac effects while still promoting the hepatic functions that help lower lipid levels.

QuatRx is also developing a new treatment for psoriasis.  Becocalcidiol, which  has just completed Phase II clinical studies, is a vitamin D analogue for the topical treatment of psoriasis without the liability of hypercalcemia associated with current therapies.

"The QuatRx management team has extensive experience in all phases of product development for both metabolic and endocrine products.  As a result, there are significant synergies in combining this experience with the strong focus on endocrine product development at Hormos," said Randy Whitcomb, M.D., chief medical officer at QuatRx.

With this transaction, a representative of the Hormos investor group will join the QuatRx Board of Directors.  Major investors from Hormos will also make an additional investment in QuatRx as an extension of a recent round of venture financing in QuatRx.

About QuatRx

QuatRx Pharmaceuticals Company, a biopharmaceutical company, focuses on research and development of therapeutic compounds primarily for the treatment of major endocrine, metabolic and cardiovascular diseases, especially dyslipidemia and endocrine diseases of aging. QuatRx has its headquarters in Ann Arbor, Michigan, with a significant presence in Europe through Hormos Medical Corp (a wholly-owned subsidiary of QuatRx Pharmaceuticals Company), located in Turku, Finland. QuatRx’s robust pipeline includes four compounds in clinical development. The research activities of the company are based on its expertise in tissue-specific steroid hormone effects at the molecular and cellular level.  With significant financial backing from top-tier venture capital firms and strong development capabilities, QuatRx continues to advance and expand its portfolio of development-stage compounds.

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