Corporate Overview

We are a clinical-stage pharmaceutical company committed to discovering, developing and commercializing novel drugs to treat viral infections. Our primary focus is on the development of oral therapeutics for the treatment of hepatitis B virus, or HBV, hepatitis C virus, or HCV and human immunodeficiency virus, or HIV. Our research and development efforts focus on a class of compounds known as nucleoside analogs, which act to inhibit the natural enzymes required for viral replication. We are currently focusing on three product candidates, two of which we are developing ourselves and one of which we are developing with a strategic partner:

• Clevudine, for the treatment of HBV, expected to enter Phase 3 registration clinical trials in the third calendar quarter of 2007;
• R7128, a pro-drug of PSI-6130 for the treatment of HCV, in a Phase 1 clinical trial; and
• Racivir, for the treatment of HIV, in a Phase 2 clinical trial.

We are developing clevudine and Racivir ourselves in the major global antiviral markets, and we have formed a strategic collaboration with F. Hoffmann-La Roche Ltd. and Hoffmann-La Roche Inc. (collectively Roche) for the development of PSI-6130 and its pro-drugs, including R7128. We are also evaluating the efficacy and safety of Dexelvucitabine (DFC) for the treatment of HIV following the completion of a Phase 2b clinical trial.

Our Strategy

Our primary objective is to become a leader in discovering, developing and commercializing novel antiviral therapeutics that provide a competitive advantage and address unmet medical needs. Our primary focus is on the development of oral therapeutics for the treatment of HBV, HCV and HIV. To achieve this goal, we are pursuing the following strategies:

• Focus on developing our current clinical-stage product candidates and advancing them toward marketing approval;
• Maintain a broad pipeline of potential product candidates to diversify commercial opportunities and reduce our dependence on any one product candidate’s clinical or commercial success;
• Leverage our core competency in nucleoside chemistry for research innovation and the discovery of additional product candidates; and
• Commercialize our products ourselves or through collaborations, where appropriate, to optimize economic returns while managing financial risk.