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Dragon is developing an engineered version of the naturally occurring human protein thrombopoietin, TPO. This protein is produced mainly by the liver and stimulates the production of blood platelets and bone marrow platelet progenitor (!!±pre-platelet!!L) cells. Platelets are critical to blood clotting and wound healing, and are often diminished in patients receiving cancer chemotherapy, or in those with liver or other relevant diseases, causing thrombocytopenia. This condition can result in uncontrolled bleeding or bruising and is currently treated by high-cost blood transfusions.

The introduction of effective and potent platelet stimulating drugs will greatly improve the treatment of thrombocytopenia and could give rise to a market worth hundreds of millions of dollars. Such products may also increase platelet levels prior to blood donation in normal donors, or in surgery patients whose own blood is used for post-surgical transfusion.

TPO products are under development. Phase I/II randomized, placebo-controlled clinical trials have shown that they increase platelet counts when used prior to or subsequent to chemotherapy. They are also generally well tolerated. Dragon!|s TPO has been tested in animals and is now ready to enter phase I clinical trials in cancer patients. Our first regulatory approvals for this product are expected in 2005.

Dragon has developed a novel system for manufacturing TPO, using Pichia yeast. We expect this technology to produce better yields of TPO than other available production systems, resulting in lower unit costs.

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Human Insulin


Dragon is developing an engineered version of insulin, a naturally occurring hormone produced by the pancreas. Insulin is critical for regulating the level of glucose in the blood and, since glucose is the primary energy source for the body, is essential for normal metabolism. A defect in insulin production, or an abnormal response to insulin, leads to high glucose concentrations and diabetes. Diabetes takes two major forms: insulin dependent diabetes mellitus (IDDM or Type 1), an autoimmune disease; and non-insulin dependent diabetes mellitus (NIDDM or Type 2), a far more common condition associated with an affluent lifestyle.

Approximately 135 million people worldwide have diabetes, 10% of whom have Type 1 disease. There is no cure for either type of the condition, and insulin injections to regulate blood glucose are required by all Type 1 and approximately 20% of Type 2 patients to permit a near normal lifestyle. The injectable human insulin market was developed by two major pharmaceutical companies, Eli Lilly and Novo Nordisk, and is currently worth $2.76 billion. This market continues to grow as the number of patients with diabetes, particularly Type 2 disease, reaches epidemic proportions.

Dragon has developed a proprietary process for the production of insulin, based on our Pichia yeast cell culturing technology . We believe that this process will result in greater yields and lower production costs than insulin produced by current manufacturers. Preclinical studies with our product should be completed by the end of 2002 and clinical studies are expected to commence in mid-2003. We anticipate first launch of Dragon insulin by the end of 2004.

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Slow-Release EPO*


Industry analysts estimate the market for slow-release EPO at $5 billion per year, with application in the treatment of anemia in patients with kidney failure and cancer patients undergoing chemotherapy.

In June 2000, Dragon acquired rights to a novel and patentable formulation for slow-release EPO by entering into a co-development agreement with Renapharm AB of Sweden and Transworld Pharmaceuticals Corp. of Portugal. This agreement provides Dragon with exclusive worldwide manufacturing rights and exclusive Asian marketing rights, including Japan, to this second generation product.

A pilot clinical trial conducted in 101 patients at the University Hospital, Uppsala University in Sweden, demonstrated that monthly administration of EPO in our slow-release formulation had the same therapeutic effect as four times per week administration of conventional EPO, with the total dose of each form of EPO being identical.

We are currently working with our partners to finalize the formulation for our slow-release product and expect to enter human clinical trials in 2003.

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