Arete Therapeutics Reports Preclinical and Clinical Data at ADA

-- Results Reported at the American Diabetes Association Meeting Validate Mechanistic and Therapeutic Potential of sEH Inhibitor in Treating Type 2 Diabetes --

SOUTH SAN FRANCISCO, Calif.—June 9, 2009—Arete Therapeutics Inc. today announced the presentation of three posters that validate the mechanistic activity and therapeutic potential of the company’s lead drug candidate, AR9281, an orally-administered soluble epoxide hydrolase (sEH) inhibitor that is in a Phase II clinical program for the treatment of type 2 diabetes. sEH is an enzyme involved in the metabolism of arachidonic acid, a key signaling molecule implicated in diabetes, hypertension and inflammatory disorders.

Presented at the 69th Scientific Sessions of the American Diabetes Association (ADA) the data demonstrate that AR9281 exerts sEH mechanism-based improvement in glucose tolerance in preclinical models of type 2 diabetes. In addition, clinical data demonstrate a linear relationship between AR9281 exposure and blood sEH activity.

“Taken together, these data showing AR9281’s safety and attractive pharmaceutic properties in normal healthy volunteers and strong evidence of its efficacy in animal models of type 2 diabetes support the further development of this novel drug candidate for the treatment of type 2 diabetes,” said James A. Sabry, MD, PhD, Arete’s President and Chief Executive Officer. “We anticipate that the results from our ongoing phase IIa clinical program in pre-diabetic patients will establish proof of concept that sEH inhibition modulates glucose metabolism or blood pressure in patients with impaired glucose tolerance and hypertension to further corroborate the clinical importance of this novel therapeutic approach.”

Three Posters Presented at ADA

The data presented by Arete scientists and colleagues are described as follows.

* “AR9281, a Soluble Epoxide Hydrolase Inhibitor – Efficacy in a DIO Mouse Model plus Pharmacokinetics and Pharmacodynamics in Mice and Men” (Whitcomb, R, Chen, D, Wang, J, Anandan, S-K, Gless, R and Webb, H).

This poster describes the direct correlation between the concentration of AR9281 in blood and the activity of its target, sEH, in both mice and humans. The data further demonstrate that AR9281 improves glucose metabolism in rodent models of type 2 diabetes.

* “A Novel Inhibitor of Soluble Epoxide Hydrolase, AR9281, Improves Glucose Homeostasis in Diet-Induced Obese Mice” (Wong, K, Zhang, L-N, Vincelette, J, Chen, D, Mehra, U, Cheng, Y, Gless, R, Anandan, S-K, Webb, H).

Data presented in this poster show that in diet-induced obese mice, AR9281 inhibits sEH and improves glucose tolerance in a highly-dose dependent manner. Improvement of glucose tolerance by AR9281 is not observed in sEH knock-out mice indicating that the action of AR9281 is sEH mechanism-based. These positive effects are associated with reductions in plasma insulin, IL-6, an inflammatory molecule elevated in people with type 2 diabetes, and resistin, a hormone that plays a role in predisposing obese individuals to diabetes.

* “Improvement of Glucose Homeostasis by AR9281, a Novel Inhibitor of Soluble Epoxide Hydrolase, in Diet-Induced Obese Mice Does Not Depend on Active Nitric Oxide Synthase” (Vincelette, J, Chen, D, Mehra, U, Cheng, Y, Gless, R, Anandan, S-K, MacIntyre, E and Wang, J).

Data presented in this poster show the correlation between treatment with AR9281 and the lowering of the glucose levels after an oral glucose tolerance test and demonstrate that these effects are not inhibited by concurrent treatment with the nitric oxide synthase inhibitor L-NAME (NG-nitro-L-arginine methyl ester), thus furthering the understanding of the mechanism of action of this novel drug candidate.

AR9281 Phase II Program Underway

Arete is conducting a Phase IIa multicenter, double-blind, placebo-controlled study of AR9281 in pre-diabetic patients with impaired glucose tolerance, mild obesity and mild to moderate hypertension. All 150 enrolled patients will be treatment-naïve for type 2 diabetes medications. The trial is evaluating two schedules of AR9281 and placebo using a parallel design to determine the feasibility of twice-a-day dosing. Each patient receives 28 days of treatment. Endpoints for the trial include safety, tolerability, reduction of blood pressure and various measures of glucose and lipid metabolism, with results expected in the first quarter of 2010.

The Phase I clinical program for AR9281, consisting of two double-blind, placebo-controlled studies, demonstrated that AR9281 was safe and well tolerated in healthy volunteers. The studies met all safety, tolerability, pharmacokinetic and pharmacodynamic endpoints. In addition, AR9281 has shown favorable results in various published and proprietary in vitro and in vivo assays for potency, selectivity, efficacy, ADME, toxicity and safety.

About AR9281

AR9281, an orally-administered soluble epoxide hydrolase (sEH) inhibitor, operates within the third branch of the arachidonic acid pathway and represents a novel and potentially more effective approach to treating type 2 diabetes, hypertension and inflammatory disease. The first two branches of this critical regulatory pathway have been targeted by several commercially successful marketed anti-inflammatory drugs including Aspirin® (acetylsalicylic acid), Motrin® (ibuprofen), Singulair® (montelukast) and Celebrex® (celecoxib). AR9281 has demonstrated an excellent safety profile and activity in multiple animal models of type 2 diabetes, and has the advantage of inhibiting a novel drug target that differentiates it from currently marketed diabetes medications. With this promising drug profile, AR9281 has the potential to provide safe and effective therapy for patients with type 2 diabetes either as monotherapy or in combination with existing treatment regimens.

About Arete Therapeutics Inc.

Arete Therapeutics is a privately-held biotechnology company dedicated to the discovery and development of novel drugs to treat type 2 diabetes, hypertension and inflammatory disorders. It is the world’s leading company focused on sEH, an important enzyme for the metabolism of arachidonic acid that plays an essential role in metabolic, inflammatory and cardiovascular physiology. The Company has raised a total of over $51 million in Series A financing led by Frazier Healthcare Ventures, Alta Partners, Three Arch Partners, Burrill & Company and Altitude Life Science Ventures. For more information on Arete Therapeutics, please visit www.aretetherapeutics.com.

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CONTACT For Arete Therapeutics Inc.

JANE GREEN (415) 348-0010 jane@jmgcomm.com

ANGELA BITTING (925) 202-6211 a.bitting@comcast.net

Angela Bitting Bitting Communications

Corporate Communications and Investor Relations (925) 202-6211 a.bitting@comcast.net

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Posted: June 2009

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