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Orphan Medical Submits Xyrem sNDA to Include Improvement in Other Primary Symptoms of Narcolepsy

Orphan Medical Submits Xyrem sNDA to Include Improvement in Other Primary Symptoms of Narcolepsy; Approval Would Expand Addressable Market to Over $250 Million

MINNEAPOLIS -- Jan 18, 2005 - Orphan Medical, Inc. (Nasdaq:ORPH) announced today the submission of a Supplemental New Drug Application (sNDA) for Xyrem (sodium oxybate) oral solution to the Food and Drug Administration (FDA). Xyrem is currently marketed as the first and only approved treatment for cataplexy, a sudden loss of muscle tone that is a debilitating symptom of narcolepsy. The sNDA is expected to expand the Xyrem label to encompass improvement in the other primary symptoms of narcolepsy, specifically the reduction of excessive daytime sleepiness (EDS) and the improvement in fragmented nighttime sleep, in addition to the established efficacy of Xyrem in treating cataplexy.

Currently there is no medication approved to treat all of the primary symptoms of narcolepsy. Prior to approval of Xyrem, antidepressants were used off-label to treat cataplexy. EDS has been treated with stimulant medications and disrupted nighttime sleep by sedative-hypnotic medications. The sNDA includes two Phase III(b) trials with EDS as the primary efficacy measure, as well as positive data relating to the treatment of other components of narcolepsy. The FDA user fee (PDUFA) deadline is 10 months from the date the FDA receives the sNDA submission.

Dr. William Houghton, the Company's Executive Vice President and Chief Medical and Science Officer, said, "We have submitted strong data that make a compelling case for an expanded Xyrem label, addressing all the symptomatic components of the narcolepsy syndrome. This submission completes the intensive development program we have designed to address narcolepsy. Our attentions will now focus on completing the proof-of-principle trial in fibromyalgia, and we expect the results of this study this summer. We are also exploring other indications for Xyrem for which there is early clinical experience and supportive scientific rationale."

John Bullion, Chief Executive Officer, stated, "Approval of this sNDA will allow us to market to all narcolepsy patients, effectively increasing the available market for Xyrem from approximately $50 million to an estimated $275 million. Moreover, these numbers are based on the assumption that only about half of narcolepsy patients are diagnosed, so there is the potential for growth in this market. We have programs to increase awareness of narcolepsy and, once the FDA approves the sNDA, we will have programs to build awareness that Xyrem treats all of narcolepsy's primary symptoms. Our proprietary direct-to-patient distribution program has been very effective in conveniently delivering Xyrem to patients and is fully capable of serving the needs of an expanded patient base."

Clinical and Safety Information

The first Phase III(b) trial known as SXB-15 generated strong positive data across both primary and secondary endpoints. The trial evaluated improvement in the EDS of patients with narcolepsy when a dose of 4.5, 6.0 or 9.0 grams of Xyrem was added to unchanged stimulant therapy. The trial results demonstrated dose-related improvement in the Epworth Sleepiness Scale (ESS) scores, statistically significant at the 6 and 9 gram daily doses. At the 9 gram dose, Xyrem produced statistically significant improvement in the Maintenance of Wakefulness Test (MWT), an established objective measure of EDS. Treatment of sleep continuity and structure was significantly improved at the 6 and 9 gram doses, with reductions in subjectively and objectively measured awakenings after sleep onset, and a marked increase in slow-wave (or Delta) sleep, thought to be the restorative period of sleep. Daytime functionality was assessed using the validated Functional Outcome of Sleep Questionnaire (FOSQ). The FOSQ outcomes demonstrated dose-related improvements in four of the five factorial assessments as well as significant improvement in the global score at the 6 and 9 gram dose levels. This double-blind, placebo-controlled, randomized trial assessed 228 patients over an eight-week treatment period in 40 sleep centers in North America and eight in Europe.

The second trial, known as EXCEEDS, was designed to evaluate the improvement of EDS associated with narcolepsy when Xyrem is used alone or with modafinil (Provigil(R)), a wakefulness-promoting agent approved for the treatment of EDS. The primary endpoint of the trial was EDS as measured by the objective Maintenance of Wakefulness Test (MWT). The secondary endpoint also measured EDS using the Epworth Sleepiness Scale (ESS). The trial demonstrated that Xyrem monotherapy is effective in the treatment of EDS associated with narcolepsy using both measures of EDS. The combined use of Xyrem and modafinil showed a greater response than either agent alone. EXCEEDS (Evaluation of Xyrem to Check Efficacy in Excessive Daytime Sleepiness) was a double-blind, double-dummy, placebo-controlled, parallel group multi-center randomized study.

In both trials, the safety profile is consistent with that of previous Xyrem trials and commercial use. The most commonly reported dose-related adverse events occurring in more than 5 percent of patients across all controlled trials are nausea, dizziness, headache, vomiting, somnolence and enuresis. No significant new or unexpected adverse events were seen in the SXB-15 trial. Occurring infrequently, but more often at the 9.0 gram dose, were disorientation, sleepwalking and enuresis, or bedwetting. These side effects occurred at reduced rates in the expanded safety dataset of the sNDA. The safety profile of Xyrem in the EXCEEDS trial was consistent with other previous controlled clinical trials. The side effect of nausea occurred more often for groups receiving Xyrem and both Xyrem and modafinil together, as did vomiting which had a markedly lower incidence. Headache was a common symptom in the EXCEEDS trial, including placebo, but dizziness and tremor were more common in the group on both drugs, as was anxiety. The incidence of sleep walking and enuresis, previously reported in our studies as associated with Xyrem showed a very low incidence in this study that was not significantly different between groups.

About Narcolepsy

Narcolepsy is a chronic, debilitating neurological disease whose primary symptoms are excessive daytime sleepiness, fragmented nighttime sleep and cataplexy. Cataplexy, a sudden loss of muscle tone, is usually triggered by strong emotions such as laughter, anger or surprise. All patients with narcolepsy suffer from EDS and an estimated 60 to 90 percent suffer from cataplexy. Patients often selectively isolate themselves from social interaction with others resulting in a worsening effect on a patient's quality of life. Narcolepsy afflicts 100,000 to 140,000 Americans of which an estimated 50,000 receive some form of treatment for their symptoms. The estimated total addressable narcolepsy market based on Xyrem pricing exceeds $250 million.

About Orphan Medical, Inc.

Orphan Medical acquires, develops and markets pharmaceuticals of high medical value for inadequately treated and uncommon CNS diseases treated by specialist physicians. Xyrem has now been assessed as a treatment for the full range of narcolepsy symptoms including excessive daytime sleepiness. The Company is also conducting a trial to evaluate Xyrem as a treatment for symptoms of fibromyalgia syndrome. Orphan Medical's Internet Web site address is www.orphan.com

The information in this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "expects," "anticipates," "intends," "may," "should," "plans," "believes," "seeks," "estimates," "could," "would" or the negative of such terms or other comparable terminology. Such forward-looking statements are based upon current expectations and beliefs and involve numerous risks and uncertainties, both known and unknown, that could cause actual events or results to differ materially from these forward-looking statements. A number of factors could cause actual results to differ materially from the Company's assumptions and expectations. These are set forth in the cautionary statements included in Orphan Medical's most recent Form 10-Q or Form 10-K filed with the Securities and Exchange Commission. (These documents can be accessed through the Orphan Medical Web site at http://www.orphan.com). All forward-looking statements are qualified by, and should be considered in conjunction with, such cautionary statements

Posted: January 2005

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