Perlecan Pharma moves Dr. Reddy’s novel anti-diabetic drug candidate to Phase I clinical trial

Hyderabad, India, December 26, 2006: Perlecan Pharma announced today that the Phase I clinical trials for Dr. Reddy’s novel anti-diabetic drug candidate DRL-16536 have started.

DRL-16536 is a novel agent that works through activating the biological pathways (AMPK) responsible for beneficial effects of exercise. Targeting exercise pathway using the drug has provided robust glucose lowering and lipid lowering effects in pre-clinical disease models, while it additionally has the potential for weight loss. Current treatment options for type 2 diabetes work through other mechanisms and may not provide the overall beneficial clinical effects needed in this population which encompasses glycemic control, lipid control and body weight loss.

DRL 16536 has been extensively studied in pre-clinical pharmacokinetic and toxicology experiments. It has demonstrated good oral bioavailability in animal models with adequate safety established in GLP toxicology studies. Based on the in vivo pharmacology and pharmacokinetic data, DRL 16536 will be dosed once a day to achieve its therapeutic benefit in the clinic.

The Phase I clinical trials, being conducted in the Netherlands, would test the safety and tolerability of DRL-16536 in healthy volunteers.

Commenting on the development, Dr. K. Anji Reddy, Chairman, Perlecan Pharma and Founder-Chairman, Dr. Reddy's Laboratories Limited, said "DRL 16536 is the fourth asset from Perlecan and is the third "first-in-class" compounds from Dr. Reddy's discovery research, to go into clinical development. With the experience gained in modulation of this target, we at Dr.Reddy's are confident of discovering drugs for prevention and treatment of metabolic syndrome."

About Perlecan Pharma
Perlecan Pharma Private Limited is India’s first integrated drug development company, promoted in September 2005 by Dr. Reddy’s Laboratories Limited (NYSE:RDY) with equity capital investment from India leading venture capital investors, ICICI Venture Funds Management Company Limited and Citigroup Venture Capital International Mauritius Limited. Perlecan Pharma received assignment of 4 NCEs from Dr. Reddy’s including all titles and rights of the development and commercialization of these NCEs. Perlecan Pharma provides Dr. Reddy’s Drug Discovery program, a model, to rapidly advance its existing as well as future NCE assets through Phase II trials and seek out-licensing, co-development or joint commercialization opportunities thereby enhancing the value of the pipeline.

Contact Information
Girish T at girisht@drreddys.com or on +91-40-66511620