Cardiokine’s wholly owned subsidiary, CARDIOKINE BIOPHARMA, was formed to specifically provide scientific research and development of pharmaceutical products in the cardiovascular therapeutic area. One such product is lixivaptan. Together with our world wide partner, Biogen Idec, the development of this compound will include its evaluation in hyponatremia and significant co-morbid conditions in the cardiovascular arena. In February 2008, the companies initiated THE BALANCE (Treatment of HyponatrEmia BAsed on LixivAptan in N YHA Class III/IV Cardiac Patient Evaluation) study.

THE BALANCE study is a 650-patient Phase III, global, multi-center, randomized, placebo-controlled, double-blind study of lixivaptan for hyponatremia in patients with heart failure. The primary objective is to evaluate the safety and effectiveness of lixivaptan, when compared to placebo, in increasing serum sodium from baseline in heart failure patients with hyponatremia. Results from the trial combined with other clinical and pre-clinical data being generated by Cardiokine Biopharma are expected to support the filing of a NDA with the US FDA. Information on studies conducted with lixivaptan can be found at www.clinicaltrials.gov.

In previous studies, lixivaptan improved blood sodium levels, lowered body weight and increased urine volume. Those studies suggest lixivaptan may play an important role in treating hyponatremia and the signs and symptoms of water retention associated with heart failure, Syndrome of Inappropriate Anti-Diuretic hormone (SIADH) and Liver Cirrhosis With Ascites (LCWA). In clinical trials involving patients with water volume overload, lixivaptan resulted in correction in hyponatremia together with a marked aquaresis (excretion of water without electrolyte loss).