Huntington’s Disease (HD) is a devastating, hereditary, degenerative brain disorder for which there is, at present, no effective treatment or cure. HD results from genetically programmed degeneration of brain cells, called neurons, in certain areas of the brain. This degeneration causes uncontrolled movements, loss of intellectual faculties, and emotional disturbance. HD is a familial disease, passed from parent to child through a mutation in the normal gene. Each child of an HD parent has a 50-50 chance of inheriting the HD gene. If a child does not inherit the HD gene, he or she will not develop the disease and cannot pass it to subsequent generations. A person who inherits the HD gene will sooner or later develop the disease. Whether one child inherits the gene has no bearing on whether others will or will not inherit the gene. Some early symptoms of HD are mood swings, depression, irritability, driving difficulties, learning new things, remembering a fact, making a decision. As the disease progresses, concentration on intellectual tasks becomes increasingly difficult and the patient may have difficulty feeding himself or herself and swallowing. The rate of disease progression and the age of onset vary from person to person. A genetic test coupled with a complete medical history and neurological and laboratory tests help physicians diagnose HD.

According to the Huntington’s Disease Society of America, more than 250,000 Americans have HD or are “at risk” of inheriting the disease from an affected parent. HD typically begins in mid-life, between the ages of 30 and 45, though onset may occur as early as the age of 2. The average lifespan after onset of HD is 10-20 years. The younger the age of onset, the more rapid the progression of the disease.

At this time, there is no way to stop or reverse the course of HD. There is no treatment to halt the progression, which leads to death after ten to twenty-five years. Most people with HD do not die as a direct result of HD but rather from medical problems that arise (infections, choking, pneumonia) from the effects of HD on the body.

In November 2005, the Company announced findings from pre-clinical studies which showed that a form of the gene XIAP (X-linked Inhibitor of Apoptosis Protein or “dXIAP”) may prevent the progression of Huntington’s disease. The Company further investigated the neuro-protective effects of dXIAP by injecting pre-symptomatic rodents with AAV vectors encoding dXIAP into the striatum, an area of the brain normally affected in patients with Huntington’s disease. In the study, rodents injected with this vector experienced significant reversal of motor dysfunction to the motor function level of normal rodents, while there was no improvement in the motor function of rodents treated with a control vector. dXIAP also improved the function of the diseased neurons in culture. Furthermore, no adverse effects due to dXIAP overproduction were observed.

In August 2008, the Company entered into a license agreement with Aegera Therapeutics, Inc. (the “Aegera License Agreement”) whereby the Company was granted an exclusive license for the worldwide rights, excluding China, for the use of dXIAP for therapeutic or prophylactic purposes in the treatment of Huntington’s disease.

In September 2009, the Company received orphan drug designation from the FDA for its Huntington’s disease product.

The Company’s development of this therapy for Huntington’s disease is currently in the pre-clinical phase. The Company reviewed and analyzed its initial pre-clinical results and determined that additional pre-clinical testing is required prior to seeking regulatory clearance to commence a Phase 1 clinical trial for this therapy. The timing of such trial is subject to the completion of additional pre-clinical testing, availability of funding, availability of AAV vector and infusion system, as well as receipt of applicable regulatory approvals.

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