Kosan Biosciences Incorporated (Nasdaq: KOSN) presented updated data from a Phase 1 clinical trial showing that alvespimycin, its second-generation Hsp90 inhibitor, demonstrated antitumor activity and tolerability in combination with trastuzumab (Herceptin(R)) in patients with refractory HER2-positive metastatic breast cancer, and in patients with refractory ovarian cancer who were progressing on standard chemotherapy. Data from the ongoing trial in patients with solid tumors were presented on Friday, September 7, 2007 by Shanu Modi, M.D., Memorial Sloan Kettering Cancer Center, in a poster, titled, "Alvespimycin (KOS-1022) and Trastuzumab (T): Activity in HER2+ Metastatic Breast Cancer (MBC)" at the 2007 Breast Cancer Symposium of the American Society of Clinical Oncology (ASCO), San Francisco, CA.

"Alvespimycin continues to demonstrate meaningful antitumor activity in patients with highly refractory HER2-positive metastatic breast cancer and ovarian cancer, with additional positive Phase 1 data showing sustained responses and clinical benefit," said Robert G. Johnson, Jr., M.D., Ph.D., Kosan's President and Chief Executive Officer. "Our strategy is to pursue potentially a broad and fast-to-market development pathway for alvespimycin in HER2-positive metastatic breast cancer. We are expanding the Phase 1 trial to include an alvespimycin plus trastuzumab plus paclitaxel regimen to establish a safety profile of this triplet regimen and to lay the groundwork for a potential larger Phase 2/3 trial. We expect to start our Phase 2 monotherapy trial in newly-diagnosed HER2-positive patients later this year. We believe that the clinical activity of alvespimycin seen in our breast cancer Phase 1 trials to date validates the compound's therapeutic potential as a novel anticancer agent and strengthens Kosan's leadership in the Hsp90 inhibitor area."

Phase 1 Updated Results

Alvespimycin is a second-generation Hsp90 inhibitor that has demonstrated the potential to disrupt the activity of multiple oncogenes and cell signaling pathways implicated in tumor growth, including HER2, a key signaling pathway in breast cancer.

Preliminary results from the Phase 1 trial of alvespimycin in combination with trastuzumab were presented at the 2007 ASCO annual meeting in June, and were updated in this presentation. The Phase 1 trial was designed to identify the recommended Phase 2 dose through the evaluation of toxicity and activity in patients with solid tumors. Patients were enrolled in three dose cohorts. The dosing schedule for alvespimycin was a one-hour weekly intravenous infusion of 60, 80 or 100 mg/m2 administered along with the standard dose of trastuzumab. Patients were assessed every 4 weeks for toxicity and every 8 weeks for response. Disease response was assessed by RECIST and by tumor markers, if available.

Of the 27 heavily-pretreated patients enrolled in the trial, 24 patients had HER2-positive breast cancer (with the majority of patients having had multiple trastuzumab-containing regimens prior to this study) and 3 patients had ovarian cancer (HER2 status unknown).

Clinical benefit was observed in 42% of evaluable patients (8 of 19 evaluable) with HER2-positive metastatic breast cancer:

-- 1 patient (13 prior regimens, including progression on single-agent lapatinib and 3 prior trastuzumab-containing regimens) showed complete resolution of lung metastases by CT/PET with significant improvement in dypsnea (shortness of breath);

-- 1 patient (11 prior regimens, 5 with trastuzumab, 2 with lapatinib) showed 10% reduction in tumor mass with change consistent with tumor necrosis and a decrease in 2 tumor markers (64% CEA, 63% CA27.29);

-- 1 patient (5 prior regimens) showed a partial response after 2 cycles, confirmed after 4 cycles, with 52% decrease hepatic lesions);

-- 5 patients had extended stable disease (4, 6+, 6+, 8 and 10 months).

Of the 3 patients with ovarian cancer,

-- 1 patient (13 prior regimens) who was on study for more than 19 months with evaluable disease had a near complete resolution of ascites and left pleural effusion at the end of cycle 2, and an 83% decrease in CA125.

Toxicities were mainly Grade 1 and 2 (diarrhea, fatigue, headache, arthralgia, nausea). One patient with multiple prior trastuzumab and doxorubicin containing regimens experienced a dose-limiting toxicity of shortness of breath and left ventricular ejection fraction reduction at 100 mg/m2. Two patients treated at 80 mg/m2 experienced reversible Grade 3 ocular keratitis; following a treatment holiday both patients continued therapy with reduced doses (one patient remains on study). Kosan plans to continue to enroll patients at the 80 mg/m2 for further safety and efficacy evaluation.

Expanded Phase 1 Trial Includes Paclitaxel

Kosan has expanded the Phase 1 trial to add weekly dosing with paclitaxel (Taxol (R)). In this triplet combination regimen, patients will continue to receive trastuzumab at full dose on a continuous weekly schedule. Alvespimycin will be dosed weekly for 3 weeks out of 4, and paclitaxel will be given on the same schedule.

Alvespimycin Development Plan

In the fourth quarter of 2007, Kosan plans to initiate a Phase 2 trial of alvespimycin as monotherapy in patients with HER2-positive metastatic breast cancer who have not previously been treated with trastuzumab. This trial will be conducted in Eastern Europe. Kosan also plans to initiate a larger, international Phase 2/3 trial of alvespimycin in combination with trastuzumab in patients with HER2-positive metastatic breast cancer in 2008.

About Kosan

Kosan Biosciences is a biotechnology company advancing two new classes of anticancer agents through clinical development -- Hsp90 (heat shock protein 90) inhibitors and epothilones. Kosan is leveraging its proprietary discovery platform to generate a pipeline of potentially significant product candidates, primarily in the area of oncology.

Hsp90 inhibitors have a novel mechanism of action targeting multiple pathways involved in cancer cell growth and survival. Tanespimycin (KOS-953) is being tested in combination with bortezomib in patients with multiple myeloma in a registration program called TIME. Tanespimycin is also being studied in HER2-positive metastatic breast cancer in combination with Herceptin, and as monotherapy in metastatic melanoma. Intravenous and oral formulations of Kosan's second-generation Hsp90 inhibitor, alvespimycin (KOS-1022), are being evaluated in Phase 1 clinical trials in hematological cancers and in HER2-positive metastatic breast cancer.

Epothilones inhibit cell division with a mechanism of action similar to taxanes, one of the most successful classes of anti-tumor agents. KOS-1584 is in Phase 1 clinical trials in patients with solid tumors. Kosan's epothilone program is partnered with Roche through a global development and commercialization agreement.

Kosan's motilin agonist compound, KOS-2187, licensed to Pfizer, is in a Phase 1 trial in gastroesophageal reflux disease (GERD).

For additional information on Kosan Biosciences, please visit the company's website at kosan.

This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 (the "Act"). Such forward-looking statements include but are not limited to the further development and potential safety, efficacy, commercialization, and other characteristics of alvespimycin, Kosan's development plans with respect to alvespimycin, including but not limited to, plans to initiate a Phase 2 monotherapy trial in the fourth quarter of 2007 and a Phase 2/3 combination trial in 2008 and to continue enrolling patients in the ongoing Phase 1 trial. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of Kosan to differ materially from those indicated by these forward- looking statements, including, among others, risks related to the development of alvespimycin, including the risk that studies may not demonstrate safety and efficacy sufficient to initiate clinical trials, continue clinical development, obtain the requisite regulatory approvals or result in a marketable product; risks related to our need for additional financing and other risks detailed from time to time in the Company's SEC reports, including its Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and other periodic filings with the SEC. Kosan does not undertake any obligation to update forward-looking statements.

Velcade(R) (bortezomib) is a registered trademark of Millennium Pharmaceuticals, Inc.

Herceptin(R) (trastuzumab) is a registered trademark of Genentech, Inc.

Taxol (R) (paclitaxel) is a registered trademark of Bristol-Myers Squibb

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View drug information on Herceptin; Taxol.