INHA-21

Inhibitex (NASDAQ: INHX) focuses on infectious diseases and two of its antibody-based therapies are in Phase III and Phase II clinical trials for Staphylococcus aureus (staph) infections. The company’s most advanced product candidate is Veronate, which is in a Phase III clinical trial for the prevention of staph infections in infants with very low birthweights. Veronate is targeting an unmet need, noting that 18% of these infants succumb to staph infections each year in the U.S. The primary endpoint of the pivotal Phase III trial is to demonstrate efficacy in the prevention of hospital-associated infections due to staph in this infant population. Veronate, which is a concentrated polyclonal immune globulin, has been granted both fast- track designation and Orphan Drug status in the U.S. and has been recommended for Orphan Medicinal Product designation in Europe. The company has retained all worldwide rights to Veronate and, if it is approved, anticipates commercializing it independently in the U.S. This is huge for Inhibitex, which could stand to make a significant profit. To put this in perspective, Synagis, which is marketed by Medimmune (NASDAQ: MEDI) to treat respiratory syncytial virus infection in newborns, has reached blockbuster status and is a major revenue stream for Medimmune. Inhibitex’s other promising candidate in clinical trials is Aurexis, a monoclonal antibody specific for Staphylococcus aureus. It is Phase II clinical as a first-line therapy, in combination with standard of care antibiotics, for treatment of serious staph bloodstream infections in hospitalized patients. Compared to patients receiving standard of care treatment alone, patients also receiving Aurexis had a shorter duration of stay in the intensive care unit and less time on mechanical ventilators. Based on these findings, Inhibitex plans to initiate additional clinical studies in this indication in 2006. Serious staph infections represent a growing problem at hospitals, particularly as antibiotic resistance increases. In addition to the challenges these infections pose to hospitals, staph infections that are serious and often resistant to antibiotics are now appearing in the community at an increasing rate. Thus, new treatments are absolutely necessary if we are to contain the spread of antibiotic-resistant bacteria. We believe Inhibitex will have a winner in Veronate. Early results from the Phase III clinical trial look promising, and we think will carry through the remainder of the study, which is anticipated to be completed in the second half of 2006. This by itself should be good enough to cause share price appreciation. 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