Pharmacopeia Advances First Therapeutic Program With GlaxoSmithKline

Pharmacopeia Earns Milestone Payment as a Result of Lead Compound Identification

PRINCETON, N.J., July 17, 2007 /PRNewswire-FirstCall/ -- Pharmacopeia , an innovator in the discovery and development of novel small molecule therapeutics, announced today that it has identified a lead compound for advancement six months ahead of the original schedule in its collaboration with GlaxoSmithKline , a global pharmaceutical company, through its Center of Excellence for External Drug Discovery (CEEDD). This compound is being evaluated as a potential treatment for inflammatory pain and will now enter lead optimization as it continues to progress towards development. As a result of this identification, Pharmacopeia will receive a $500,000 milestone payment from GSK.

Under the terms of the companies' collaboration, Pharmacopeia has already received $10 million from GSK and is entitled to an additional $5 million payment upon the completion of additional early discovery activities. Pharmacopeia is also entitled to success-based milestone payments totaling up to $83 million per program for any drug development program pursued through the multi-program alliance and up to double-digit royalties on the sales of any product commercialized by GSK from the alliance. Should GSK decline its option to complete pivotal trials of these programs resulting from the alliance, Pharmacopeia may independently pursue development of these programs, subject to its obligations to GSK under the agreement.

"Over the past year, our work with Pharmacopeia has exemplified the high standard of collaboration and productivity that we believe will contribute to the future of drug development," said Hugh Cowley, Senior Vice President of GSK and head of the Center of Excellence for External Drug Discovery (CEEDD) at GSK. "The identification of this lead compound, sooner than expected, is a clear indication of the significant progress that has been made in a short period of time. We look forward to potentially advancing this, as well as other programs, that emerge from the CEEDD-Pharmacopeia alliance."

"The collaboration has progressed remarkably quickly due to the skill and expertise on both sides," said Les Browne, Ph.D., President and Chief Executive Officer of Pharmacopeia. "I am especially proud that in little more than one year from the initiation of this alliance, Pharmacopeia scientists have identified a validated lead candidate worthy of optimization with the goal of identifying a preclinical development candidate. We look forward to advancing this program towards preclinical development and repeating this success in the other ongoing programs under our alliance with GSK."

About The CEEDD

GlaxoSmithKline is enhancing the way it discovers and develops drugs by creating a small dedicated team who will feed the GSK pipeline solely through the efforts of its external alliances. The CEEDD (Center of Excellence for External Drug Discovery) was formed as further validation of GSK's strategy to create small, independent and accountable R&D teams (Centers of Excellence for Drug Discovery or CEDDs). In essence, the CEEDD will 'virtualize' a portion of the GSK pipeline; namely, from Target to Clinical Proof of Concept, by forming multiple risk-sharing/reward-sharing alliances. Capitalizing on the speed and efficiency of its collaborators will allow GSK to deliver pharmaceuticals products faster to patients.

About Pharmacopeia

Pharmacopeia is committed to discovering and developing novel therapeutics to address significant medical needs. The Company has a broad portfolio advancing toward clinical validation, both independently and with partners. Pharmacopeia's most advanced internal program is a dual-acting angiotensin and endothelin receptor antagonist (DARA) for hypertension and diabetic kidney disease for which Phase 1 clinical trials are underway. Other internal proprietary programs address primarily immunoregulation. Pharmacopeia's collaborative efforts have resulted in a portfolio that includes one partnered program currently in Phase 2 clinical trials targeting chronic obstructive pulmonary disease (COPD) and four partnered programs in Phase 1 clinical trials targeting rheumatoid arthritis, oncology, metabolic and inflammatory diseases. Four additional partnered compounds are in preclinical development. Pharmacopeia's current strategic alliances are with Cephalon, GlaxoSmithKline, Organon and Wyeth.

    Pharmacopeia Contact:

    Brian M. Posner

    Executive Vice President and Chief Financial Officer

    609-452-3643

    

ir_pr@pcop.com

This press release, and oral statements made with respect to information contained in this press release, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include those which express plan, anticipation, intent, goal, contingency or future development and/or otherwise are not statements of historical fact. These statements are based upon management's current expectations and are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements. These forward- looking statements include, but are not limited to, statements about the successful implementation of Pharmacopeia's strategic plans, Pharmacopeia's ability to successfully perform under its collaboration with GlaxoSmithKline, Pharmacopeia's expectations concerning the development priorities of its collaborators, their ability to successfully develop compounds and its receipt of milestones and royalties from the collaborations, Pharmacopeia's plans to develop PS433540, a product candidate from its DARA program, Pharmacopeia's Phase 1 clinical studies and proposed Phase 2 clinical studies with respect to PS433540, including timing and expected outcomes of such studies, Pharmacopeia's estimates of the market opportunities for its product candidates, including PS433540, Pharmacopeia's ability to successfully perform under its other collaborations with Cephalon, Organon and Wyeth, Pharmacopeia's ability to build its pipeline of novel drug candidates through its own internally-funded drug discovery programs, third party collaborations and in-licensing, Pharmacopeia's ability to raise additional capital, Pharmacopeia's anticipated operating results, financial condition, liquidity and capital resources, Pharmacopeia's expectations concerning the legal protections afforded by U.S. and international patent law, Pharmacopeia's ability to pursue the development of new compounds and other business matters without infringing the patent rights of others, additional competition, and changes in economic conditions.

Further information about these and other relevant risks and uncertainties may be found in Pharmacopeia's Reports on Form 8-K, 10-Q and 10-K filed with the U.S. Securities and Exchange Commission. Pharmacopeia urges you to carefully review and consider the disclosures found in its filings which are available in the SEC EDGAR database at http://www.sec.gov. All forward-looking statements in this press release and oral statements made with respect to information contained in this press release are qualified entirely by the cautionary statements included in this press release and such filings. These risks and uncertainties could cause actual results to differ materially from results expressed or implied by such forward-looking statements. These forward-looking statements speak only as of the date of this press release. Pharmacopeia undertakes no obligation to (and expressly disclaims any such obligation to) publicly update or revise the statements made herein or the risk factors that may relate thereto whether as a result of new information, future events, or otherwise.

CONTACT: Brian M. Posner, Executive Vice President and Chief FinancialOfficer of Pharmacopeia, +1-609-452-3643, ir_pr@pcop.com

Ticker Symbol: (NASDAQ-NMS:PCOP),(NYSE:GSK)

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Posted: July 2007


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