Avalon Pharmaceuticals Announces Positive Interim Results for AVN944 Phase I Trial

Multiple Patients with Stabilized Disease and Affirmative Biomarker Data



GERMANTOWN, Md., Dec. 13  /PRNewswire-FirstCall/ -- Avalon Pharmaceuticals, Inc. (Nasdaq and NYSE Arca: AVRX), today released updated interim results from its Phase I study of AVN944, the company's lead product candidate for the treatment of hematologic malignancies. Interim data from the study indicates that AVN944 is well tolerated, has dose-dependent pharmacokinetics, induces biomarkers of programmed cell death in cancer cells from patients, and has resulted in stabilized disease after a one-month treatment cycle in half of the patients that have been treated thus far.

"We are encouraged by the positive interim results from the AVN944 trial," said Michael Hamilton, M.D., Avalon Pharmaceuticals' Chief Medical Officer. "The fact that we have not seen any drug-related serious adverse events, combined with several indications of biological drug effects and disease stabilization in multiple patients indicates that there will likely be a good therapeutic window from which to establish an effective treatment protocol. Based on pre-clinical data and the positive trends that we have seen thus far in the Phase I, we believe that the immediately upcoming dose levels in the Phase I trial should provide sufficient information to support a goal of initiating multiple Phase II studies during the first half of 2007."

Background: AVN944 is an oral small molecule drug that inhibits inosine monosphospate dehydrogenase (IMPDH), a critical enzyme for synthesis of guanosine triphosphate (GTP), a molecule required for DNA synthesis and cellular signaling. IMPDH is over expressed in many cancer cells, especially from hematological malignancies. Pre-clinical studies showed that AVN944 is a highly specific inhibitor of IMPDH, suppresses pools of GTP, and in cultured cells has a selective growth inhibition effect on cancer cells vs. normal cells.

An earlier single-dose, dose-escalation, healthy volunteer clinical trial conducted in the United Kingdom showed that AVN944 was well tolerated at all tested doses with no notable side effects; had good pharmacokinetic properties; and had a significant inhibitory effect on IMPDH enzyme activity.

Study Design: The current U.S. Phase I study is a repeat-dose dose escalation trial in patients with advanced hematologic malignancies. Patients are dosed for 21 days on a 28-day cycle. A minimum of three patients are treated at each dose level. The study is divided into two arms, one for treatment of leukemia patients and the other for treatment of patients with lymphoma and myeloma. For the leukemia arm of the study, patients are currently being treated at the fourth dose level, 100 mg twice daily. For the lymphoma and myeloma arm, patients are currently being treated at the fifth dose level, 125 mg twice daily.

Positive Safety and Tolerability Data: The goal of the Phase I study is to establish the safety, tolerability and pharmacokinetics of the drug.  Thus far, 63 one-month cycles of AVN944 have been initiated in 28 patients. There have been no drug-related Serious Adverse Events (SAEs), indicating that AVN944 is being well tolerated thus far at all dose levels. Pharmacokinetics measurements indicate dose proportional plasma levels of AVN944 during treatment and sustained plasma concentrations at the dose levels tested thus far.

Early Activity Indicators:  This Phase I study has also been designed to evaluate several pharmacodynamic and efficacy-related endpoints. Upon entering the trial, all patients have refractory, progressive disease and have failed all prior therapies. Thus far, 12 of 24 patients have had stabilized disease after one cycle of treatment with AVN944.  These include patients with both leukemia and multiple myeloma. Patients who have achieved stable disease following completion of a one-month treatment cycle with AVN944, as determined by the clinical investigator, may be advanced to a subsequent cycle.

Four multiple myeloma patients in the study have maintained stabilized disease for several months of treatment with AVN944; two of these patients completed five months of treatment and two others completed eight successive cycles. These two patients continue to have stable disease and are in their ninth month of treatment.

Affirmative Biomarker Data:  Using Avalon's proprietary biomarker technology, AvalonRx(R), analysis of selected markers from patient samples showed a correlation of changes in gene expression to dose level and duration of exposure.  Importantly, several of these markers displayed a durable, sustained stress response indicative of cancer cell death, particularly in cancer cells from AML patients. Specifically, it was found that the gene HspA1A, a marker of stress response found to correlate with depleted GTP pools in cancer cell lines, is induced within hours of the first treatment of the drug in patients, even at the trial's lowest doses. Other genes directly related to IMPDH inhibition showed similar response characteristics.

Teleconference and Webcast: The company will host a conference call on Thursday, Dec. 14, 2006 at 8 a.m. Eastern Standard Time to discuss the interim results of the AVN944 Phase I clinical trial.  Interested investors, analysts, members of the media and the general public can listen to the call live over the Internet from the investor section of the company's Web site or by dialing the numbers listed below. A detailed PowerPoint presentation will accompany the webcast.

  Conference Call Details:
  ------------------------
  Dial-In:  [phone] (U.S.)
            [phone] (International)
            Pass code:  78269925
  Webcast:  Please go to http://www.avalonrx.com/, Investor Relations, within 15
            minutes prior to the call and select the webcast link.  The
            conference call replay will be available through June 1, 2007 on
            Avalon's website (http://www.avalonrx.com/).

  About Avalon Pharmaceuticals


Avalon Pharmaceuticals is a biopharmaceutical company using its proprietary technology, AvalonRx(R), to discover and develop cancer therapeutics.  Avalon has a lead product in Phase I clinical development (AVN944 - IMPDH inhibitor), preclinical programs to discover inhibitors for the Beta-catenin, Aurora and Survivin pathways, and drug discovery collaborations with MedImmune, Novartis, ChemDiv and Medarex. Avalon Pharmaceuticals was established in 1999 and is headquartered in Germantown, Md.

About AvalonRx(R)

AvalonRx(R) is a comprehensive, innovative and proprietary suite of technologies based upon large-scale gene expression analysis. This platform facilitates drug discovery by expanding the range of therapeutic targets for drug intervention, including targets and target pathways frequently considered intractable using conventional HTS approaches, allows more informed decisions about which compounds to advance towards clinical trials, and facilitates drug development through identification of biomarkers of efficacy that can stratify patients or provide early indicators of response.

Safe Harbor Statement

This announcement contains, in addition to historical information, certain forward-looking statements that involve risks and uncertainties, in particular, related to clinical progress in the development of AVN944.  Such statements reflect the current views of Avalon management and are based on certain assumptions.  Actual results could differ materially from those currently anticipated as a result of a number of factors, risks and uncertainties including the risk that AVN944 will not progress successfully in its clinical trials, and other risks described in our SEC filings.  There can be no assurance that our development efforts will succeed, that AVN944 will receive required regulatory clearance or, even if such regulatory clearance is received, that any subsequent products will ultimately achieve commercial success. The information in this Release should be read in conjunction with the Risk Factors set forth in our 2005 Annual Report on Form 10-K and updates contained in subsequent filings we make with the SEC.

  Contacts:
  Avalon Pharmaceuticals, Inc.            Noonan Russo
  Gary Lessing                            Wendy Lau (Media)
  Executive Vice President & CFO          Tel: [phone]
  Tel: [phone]
  Fax: [phone]                     The Trout Group LLC
  Email:                 Chad Rubin (Investors)
                                          Tel: [phone] ext. 47


DATASOURCE: Avalon Pharmaceuticals, Inc.



CONTACT:  Gary Lessing, Executive Vice President & CFO of Avalon

Pharmaceuticals, Inc., [phone], Fax: [phone],

; or Media: Wendy Lau of Noonan Russo, [phone]; or

Investors: Chad Rubin of The Trout Group LLC, [phone] ext. 47



Web site:  http://www.avalonrx.com/ 

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