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POZEN Monetizes Its Treximet Royalty Stream For $75 Million

POZEN Inc. (NASDAQ: POZN), a pharmaceutical company committed to transforming medicine that transforms lives, announced today that it has sold most of the future royalty and milestone payments under its collaboration and license agreement with Glaxo Group Limited, part of the GlaxoSmithKline group of companies (GSK), covering Treximet ® (sumatriptan/naproxen sodium) sales in the United States to a financial investor for $75 million. By virtue of the agreement, the financial investor will be entitled to receive royalties on net sales of Treximet and any other products containing sumatriptan and naproxen sodium developed and sold by GSK under the collaboration and license agreement in the United States on or after October 1, 2011. POZEN retains rights to 20% of royalties paid on net sales of Treximet and such other products in the United States, beginning in the second quarter of 2018. This agreement has no effect on any future royalties from MT400 that might originate from sales of the product outside of the United States.

“Monetizing this portion of the U.S. Treximet royalty unlocks its inherent value and significantly improves our balance sheet without dilution of existing shareholders. This enables us to negotiate with potential partners for PA32540 from a much stronger position and to continue to execute our strategic plan,” said Dr. John R. Plachetka, Chairman, President and Chief Executive Officer. “With the completion of this transaction, we now expect to end 2011 with greater than $110 million, or approximately $3.67 per share, in cash, cash equivalents and short-term investments.”

Morgan Stanley & Co. LLC acted as financial advisor to POZEN in connection with this transaction.

We will record the $75 million purchase price, less transaction costs, as revenue in the fourth quarter of 2011. Therefore, we are revising our earlier estimated full year 2011 revenue to be in the range of $86-$87 million. We are now estimating full year 2011 operating expenses to be in the range of $45-$47 million and estimating a full year after-tax net income of $39.5-$41.5 million. Based upon our current 2012 plan, which includes filing the NDA for PA32540, we also expect to have cash and short-term investments of >$85 million at the end of 2012, before recording any cash that may be realized from a partnership arrangement on PA32540 or other pipeline assets.

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