Ulcerative Colitis

We anticipate selling, general and administrative expenses for 2006 to be approximately 38% of total product revenue.

Additionally for 2006, we anticipate a charge of $4.0 to $4.5 million related to the amortization of intangible assets associated with the InKine merger in 2005 and the acquisition of AZASAN(R), ANUSOL-HC(R) and PROCTOCORT(R) in prior years.

For 2006, we expect total Company product revenue will be at least $205 million.

We believe we will be able to deliver earnings per share of at least $0.85, on a fully diluted basis, assuming a 5% tax rate, for the year ending December 31, 2006.

During 2006 we intend to continue increasing profits by focusing our efforts and leveraging our resources to grow our established therapeutic franchises.

We believe that our focused and leveraged efforts should generate operating margins in excess of 30% in 2007 and increasing thereafter." Commenting on 2005, Carolyn Logan, President and Chief Executive Officer, stated, "We are pleased with the progress the Company made during the year to build and expand upon our three therapeutic franchises in gastroenterology: inflammatory bowel disease; bacteria-related disease and bowel-cleansing.

COLAZAL continues to provide a solid b...

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