A. Company Profile

Kosan (NASDAQ: KOSN) uses its proprietary technologies to develop drug candidates from an important class of natural product compounds known as polyketides. Kosan's strategy is to apply its technologies to create new polyketides for pharmaceutical development, to make improved versions of known polyketide pharmaceuticals.

B. Technology

Polyketides are made in very small amounts in microorganisms and are difficult to make or modify chemically. Kosan's technologies enable the creation, modification and production of polyketides in ways that are not otherwise possible. Kosan can introduce specific alterations in the structure of known polyketides in order to improve on existing drugs and to rapidly create novel polyketides as potential new drugs. Genetic instructions for making a polyketide out of one microorganism can be engineered, manipulated, and transferred into another microorganism that provides a more favorable environment to grow and produce more of the polyketides.

C. �Products

Product Pipelines

Product

Indication

Clinical Status

KOS-862

(Epotholine D)

Breast, colorectal, and non-small cell lung cancers

Phase II

Kidney cancer and melanoma

Phase I

17 AAG

Various tumors

Phase I/II

1. KOS-862

KOS-862, or Epotholine D, inhibits cancer cells by the same mechanism as paclitaxel, and is also effective against paclitaxel-resistant tumors. Paclitaxel is a cytotoxic agent with a mechanism of action that induces cell death by inhibiting cell division.KOS-862 demonstrated superior anti-tumor therapeutic effects to paclitaxel in animal models. Furthermore, KOS-862 exhibited potent or curative effects in paclitaxel-resistant tumors. In pre-clinical studies, KOS-862 did not exhibit severe toxicity at curative therapeutic doses.

2. 17 AAG

Heat shock protein 90 (Hsp90) is a protein chaperone that binds to several sets of signaling proteins, known as "client proteins." These client proteins include a list of cancer-relevant targets such as mutated p53, Bcr-Abl, Raf-1, ErbB2 and other kinases, as well as steroid hormone receptors. Disruption of the Hsp90-client protein complexes leads to proteosome-mediated degradation of client proteins. The polyketide geldanamycin, and certain analogs such as Kosan's lead product in this program, 17-AAG, bind to Hsp90 and cause its dissociation from, and consequently, degradation of, the client proteins. Because the Hsp90 client proteins are so important in signal transduction and in transcription (processes critical to the growth and survival of cancer cells), geldanamycin analogs such as 17-AAG may serve as chemotherapeutic agents in a number of cancers. Studies suggest that these compounds are synergistic with certain other inhibitors of the signal transduction client proteins, as well as several conventional anticancer agents.

D. �Job Opportunities at Kosan

E. Information for Investor