Event Brief of Aradigm To Discuss Expanded AERx iDMS Licensing Deal With Novo Nordisk - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Bryan Lawlis, Aradigm Corp., President & CEO . Rick Thompson, Aradigm Corp., Chairman of the Board . Tom Chesterman, Aradigm Corp., SVP & CFO . Stephen Farr, Aradigm Corp., SVP & Chief Scientific Officer

OVERVIEW

Novo Nordisk and ARDM announced an agreement giving Novo Nordisk full development and mfg. rights to the AERx iDMS program. Under the agreement, Novo Nordisk will purchase mfg. equipment and leasehold improvements currently utilized by ARDM in the AERx iDMS program for an estimated cash payment of $55m. Q&A Focus: Expenses and burn rate.

PRESENTATION SUMMARY

S1. Introduction (B.L.) 1. Agreement: 1. Today, ARDM and Novo Nordisk licensed the AERx pulmonary insulin delivery system, has been significantly expanded, and ARDM's relationship has been restructured. 2. ARDM and Novo Nordisk announced an important change to their original 1998 licensing agreement. 1. Expands Novo Nordisk's license to include both development and mfg. 1. Novo Nordisk will be establishing a new affiliate, Novo Nordisk delivery technologies at ARDM's site in Hayward, California. 2. Final development of the AERx insulin Diabetes Management System (iDMS) will be completed at the above-mentioned location. 3. ARDM believes that this transaction clearly demonstrates Novo

Nordisk's ongoing commitment to inhaled insulin and the AERx

iDMS program. 1. It represents a significant new investment and an obligation for Novo Nordisk to complete clinical development, mfg. development and commercial scale-up.

S2. Agreement Terms Review (R.T.) 1. Details: 1. In 1998, Novo Nordisk and ARDM entered into a licensing agreement for the commercialization of the AERx iDMS. 1. In that agreement, the rules and responsibilities of the two companies were carefully laid out. 1. ARDM Responsibilities: 1. Product development. 2. Mfg. development. 3. Commercial mfg. 2. Novo Nordisk Responsibilities:

1. Clinical development. 2. Commercial activities. 2. Developments:

1. As development progressed, it became clear that commercial

mfg. was going to be a very large task. 1. In recognition of this, ARDM and Novo Nordisk modified the original agreement in 2001. 1. Novo Nordisk would be responsible for all mfg. other than

that produced at the first factory owned by ARDM. 2. As the prospects for pulmonary insulin continued to build, ARDM's first factory is going to be needed to be dedicated to AERx iDMS.

3. The financial commitment implied for ARDM is substantial, as

any capital raised by ARDM would have to be applied to iDMS

with little opportunity for investment in other programs.

1. With this in mind, the senior executives of both companies discussed alternative structures that would better serve the project, Novo Nordisk and ARDM. 3. Tasks: 1. With product development substantially complete, commercial scale-up underway and commercial launch ahead, it now makes sense to consolidate the remaining tasks for AERx iDMS under Novo Nordisk. 1. Therefore, ARDM has broadened the original license to include development and mfg. rights. 2. To support the establishment of the new Novo Nordisk wholly …