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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

for the fiscal year ended December 31, 2004

OR

for the transition period from              to             .

Commission file number: 000-31145.

VICURON PHARMACEUTICALS INC.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:    None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes  x    No  ¨

On June 30, 2004, which was the last business day of our most recently completed second fiscal quarter, our public market value was approximately $683.1 million (based on 54.4 million shares of our common stock then held by non-affiliates and a closing price that day of $12.56 per share of our common stock on the Nasdaq National Market). These public market value calculations exclude shares held on the stated dates by our executive officers and directors and persons filing a Schedule 13D with the Securities and Exchange Commission in respect to our common stock. (Exclusion from these public market value calculations does not imply affiliate status for any other purpose).

On February 23, 2005, we had 60,631,269 shares of our common stock outstanding.

Documents Incorporated By Reference: Portions of the Proxy Statement for the 2005 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December 31, 2004, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part hereof.

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Cautionary Note Regarding Forward-Looking Statements

In addition to historical information, this Annual Report on Form 10-K, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts included in this Annual Report on Form 10-K, regarding our strategy, future operations, financial position, projected costs, prospects, plans and objectives of management are forward-looking statements. As contained herein, the words “expects,” “anticipates,” “believes,” “intends,” “will,” and similar types of expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements are based on information that is currently available to us, speak only as of the date hereof, and are subject to certain risks and uncertainties. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or to reflect any change in events, conditions, or circumstances on which any such forward-looking statement is based, in whole or in part. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to, those discussed in the sections in this Annual Report on Form 10-K entitled “Risk Factors.” Readers should carefully review the risk factors described in other documents the Company files from time to time with the Securities and Exchange Commission, including the Quarterly Reports on Form 10-Q that we will file in 2005.

All references to “dollars” or “$” in this Annual Report on Form 10-K are references to United States dollars; all references to “euros” or “€” are references to European Union, or EU, euros. On February 23, 2005, the median 4 p.m. Greenwich Mean Time spot rate for the euro expressed in dollars per euro was $1.32 to €1.00.

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PART I

ITEM 1. BUSINESS

In this Annual Report on Form 10-K, references to “the Company,” “Vicuron,” and “we,” throughout this Form 10-K shall all refer to Vicuron Pharmaceuticals, Inc. and its subsidiaries. This Annual Report contains trademarks and trade names of other entities.

Overview

We are a biopharmaceutical company focused on discovering, developing, manufacturing and commercializing vital medicine for seriously ill patients. We focus on seeking to develop antibiotics and antifungals that may have competitive advantages over existing products, such as greater potency, improved effectiveness against difficult to treat strains and reduced toxicity. Because the development process for anti-infective products is relatively efficient and well-defined, we believe the costs and time required to bring new anti-infective products to market can be significantly less than the time required to bring products to market in other major therapeutic categories.

In early 2003, we submitted a new drug application, or NDA, for our lead antifungal product candidate, anidulafungin, to the U.S. Food and Drug Administration, or FDA. Anidulafungin belongs to the first new class of antifungal agents, called echinocandins, introduced in more than 40 years. In May 2004, we received an approvable letter from the FDA for anidulafungin. Based on the approvable letter and our discussions with the FDA, we intend to pursue two paths for approval of anidulafungin, as follows:

In December 2004, we submitted an NDA for dalbavancin, a novel antibiotic for the treatment of complicated skin and soft tissue infections, or cSSTIs. In February 2005, we received from the FDA the acceptance file notification and were granted priority review status by the FDA for the NDA for dalabanvin for the treatment of complicated skin and soft tissue infections. Dalbavancin is a unique, once weekly IV lipoglycopeptide for the treatment of cSSTIs caused by Gram-positive bacteria, including the difficult-to-treat strains of Staphylococcus-methicillin-resistant Staphylococcus aureus, or MRSA. Dalbavancin is a second-generation lipoglycopeptide antibiotic belonging to the same class as vancomycin, a widely-used injectable antibiotic for Staphylococcal infections. The current Prescription Drug User Fee Act, or PDUFA date is June 21, 2005.

We have a two-fold approach to product discovery, development and marketing. Our primary strategy is to focus on the discovery and development of proprietary products, concentrating on injectable antibiotic and antifungal products for the hospital market. We expect to market these products in certain markets through a targeted and cost-effective sales and marketing infrastructure, including a direct sales force, that we plan to establish. Our product candidates target disease indications that represent markets where there is demand for new therapies.

Our secondary strategy is to collaborate with major pharmaceutical companies to discover and develop orally administered antibiotic and antifungal products for the community market. Major pharmaceutical companies are generally better suited to market these products, as these products require substantial expenditures for sales and marketing to reach their full market potential. Under our typical collaboration agreements, we are responsible for discovering the compounds and our collaborators are responsible for developing and marketing them. We expect to receive a combination of research funding, milestone payments and equity investments from our collaborators, as well as royalty fees if any products are commercialized.

Our discovery platform combines our proprietary expertise in the critical areas of functional genomics, mechanism-based rational drug design, high-throughput screening of our diversified library of microbial extracts, combinatorial chemistry, lead optimization and medicinal chemistry. We intend to leverage our technology

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platform to discover and supply lead compounds both for internal development and commercialization, in the case of hospital products, and for our pharmaceutical collaborations, in the case of community products.

Our revenues in the near term are expected to consist primarily of collaborative research payments, license fees and milestone payments to be received from our collaborators. Certain of these payments are dependent on the achievement of specified milestones. We expect these revenues to decrease in 2005. If the development efforts result in clinical success, regulatory approval and successful commercialization of our products, we will generate revenues from sales of proprietary products and from receipt of royalties on sales of collaboration products.

Our expenses have consisted primarily of costs incurred in research and development of new product candidates when in-licensing existing product candidates, and in connection with our collaboration agreements, and from general and administrative costs associated with our operations. We expect licensing costs to increase as development milestones are achieved, and our research and development expenses to increase as we continue to develop our product candidates. We expect to incur sales and marketing expenses during 2005 as we establish our sales and marketing organization.

Since our inception we have incurred significant losses. As of December 31, 2004, we had an accumulated deficit of $405.2 million. We anticipate incurring additional losses, which may increase for the foreseeable future, including at least through December 31, 2006.

We anticipate that our quarterly results of operations will fluctuate for the foreseeable future due to several factors, including payments made or received pursuant to licensing or collaboration agreements, progress of our research and development efforts, and the timing and outcome of regulatory approvals. The fluctuating nature of these factors makes predictions of our future operations difficult or impossible to ascertain.

Our Proprietary Products

Anidulafungin

Our lead antifungal product candidate, anidulafungin, is intended for the intravenous treatment of serious systemic fungal infections. Anidulafungin has potent activity against the principal yeasts, such as Candida, and molds, such as Aspergillus, that cause serious fungal infections. In addition, anidulafungin has fungicidal activity against yeast, which means that it kills the yeast. This is in contrast to many widely-used antifungal agents which only inhibit fungal growth. Because of anidulafungin’s novel mechanism of action, it is active against strains resistant to other agents, such as fluconazole. We believe anidulafungin will have competitive advantages over existing therapies because it combines potent fungicidal activity with a good resistance profile to date.

In early 2003, we completed a Phase 3 clinical trial with anidulafungin for the treatment of esophageal candidiasis. Based in part on the results of that trial, in April 2003 we filed an NDA for anidulafungin for the treatment of esophageal candidiasis, which was accepted for review by the FDA in June 2003. In May 2004, we received an approvable letter from the FDA indicating that the NDA submission for anidulafungin did not currently support a labeling claim for the initial treatment of esophageal candidiasis. In the approvable letter, the FDA provided that its basis for this conclusion was that we had not presented sufficient efficacy and safety data to establish a satisfactory risk/benefit rationale for the use of anidulafungin in the initial treatment of esophageal candidiasis, including the relapse rate at the two-week post-therapy visit. We intend to address these matters with the submission of additional efficacy and safety data as described below.

We plan to file an amendment to the esophageal candidiasis NDA, which will provide supplemental efficacy and safety data largely at the 100 mg dose, including from our completed invasive candidiasis/candidemia Phase 3 clinical trial. We expect to submit the amendment in the second quarter of 2005. Under this timeline, the fourth quarter of 2005 is the earliest anidulafungin could be approved for this indication. In December 2003, we also announced the filing of our marketing authorization application, or MAA for anidulafungin for the treatment of esophageal candidiasis with the European Agency for the Evaluation of Medicinal Products, or EMEA. We requested, and the EMEA granted us, a 90 day extension for submitting responses to the EMEA. Subsequently,

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we requested the withdrawal of the anidulafungin MAA for esophageal candidiasis from the EMEA in March 2005. We intend to resubmit a new MAA for anidulafungin in invasive candidiasis.

We intend to file a new NDA for anidulafungin for the treatment of invasive candidiasis/candidemia with updated efficacy and integrated safety data, including data from our completed Phase 3 clinical trial, the top line results of which were released on February 7, 2005. We plan to submit the NDA for this indication in the third quarter of 2005.

We began the Phase 3 clinical trial of anidulafungin for invasive candidiasis/candidemia in December 2002 and announced the completion of enrollment in September 2004. This double-blind, multi-center, randomized Phase 3 trial studied a 100 mg daily dose of anidulafungin versus a 400 mg daily dose of fluconazole in 256 patients with invasive candidiasis/candidemia. Patients received daily intravenous, or IV infusions of either anidulafungin or fluconazole for 10 to 42 days. The primary endpoint was the global response at the end of IV therapy, which required a successful clinical and a successful microbiological response.

Success in the global response at the end of IV therapy in the microbiological intent-to-treat, or ITT population was 75.6% (96/127) of patients with anidulafungin and 60.2% (71/118) with fluconazole. These results demonstrate statistical superiority (95% confidence interval of the difference: 3.85, 26.99) in favor of anidulafungin.

The secondary endpoint of successful global response at the two-week follow up visit in the microbiological ITT population was observed in 64.6% (82/127) of patients in the anidulafungin arm and 49.2% (58/118) of patients in the fluconazole arm, again demonstrating statistical superiority (95% confidence interval of the difference: 3.14, 27.68).

The secondary endpoint of successful global response at the six-week follow-up visit in the microbiological ITT population was observed in 55.9% (71/127) of patients in the anidulafungin arm and 44.1% (52/118) of patients in the fluconazole arm demonstrating non-inferiority (95% confidence interval of the difference: -0.6, 24.28). Anidulafungin demonstrated comparable tolerability to fluconazole in the study.

We also began a Phase 2/3 clinical trial of anidulafungin in combination with liposomal amphotericin for the treatment of invasive aspergillosis in the fourth quarter of 2001 and released results of this trial in March 2004. This open-label, non-comparative trial enrolled 30 hospitalized patients with a diagnosis of invasive aspergillosis. A single daily intravenous infusion of anidulafungin and a single daily intravenous infusion of a lipid-complexed formulation of amphotericin B was administered to patients for up to 90 days. We believe that the results of this clinical trial demonstrate that anidulafungin and liposomal amphotericin can be combined without increasing side effects.

Dalbavancin

Our lead antibiotic product candidate, dalbavancin, is a second-generation lipoglycopeptide antibiotic belonging to the same class as vancomycin, a widely-used injectable antibiotic for Staphylococcal infections. Dalbavancin is intended for the treatment of serious systemic infections, particularly those caused by Staphylococci. Dalbavancin is more potent than vancomycin in vitro, in particular against methicillin-resistant Staphylococci, a common and difficult-to-treat bacterium. Dalbavancin has bactericidal activity, which means that it kills the bacteria rather than merely inhibiting their growth, as shown in both the laboratory and in infected animals. Because of its unique pharmacokinetic properties and the tolerability profile seen to date, dalbavancin has the potential to be dosed weekly, which may be a significant competitive advantage over other products that are typically dosed once or multiple times each day. We have completed Phase 3 clinical trials with dalbavancin for the treatment of both complicated and uncomplicated skin and soft tissue infections, or SSTIs. The results of the Phase 3 clinical trials met the primary endpoint of non-inferiority in evaluable patients’ clinical response at two weeks following therapy when compared to linezolid, cefazolin or vancomycin, three of the standard-of-care agents for SSTIs. Dalbavancin was also shown to be well tolerated. Based on these data, we filed in December 2004 an NDA for dalbavancin for

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the treatement of cSSTIs. In February 2005, we received the acceptance to file notification from the FDA and were granted priority review status by the FDA for the NDA for dalbavancin. The current PDUFA date is June 21, 2005.

In December 2002, we began two pivotal Phase 3 clinical trials evaluating weekly dosing of dalbavancin for treatment of SSTIs, the first in complicated skin and soft tissue infections, or cSSTIs, versus linezolid (Zyvox^™) and the second in uncomplicated skin and soft tissue infections, or uSSTIs, versus intravenous cefazolin followed by oral cephalexin. In August 2004, we announced the results of these trials. The cSSTI trial was a randomized, double-blind trial involving 854 patients randomized in a 2:1 ratio for dalbavancin:linezolid. The primary endpoint was clinical response at the follow-up visit in the evaluable patient population. Evaluable patients taking dalbavancin demonstrated an 88.9% response versus 91.2% for linezolid patients (95% confidence interval -7.3, 2.9), which met the pre-determined criterion for non-inferiority delta. In the ITT, group dalbavancin patients showed a 76.5% response versus 82.7% for linezolid (95% confidence interval -12.0, -0.3) demonstrating non-inferiority. Dalbavancin was well tolerated in this trial. The uSSSI trial was a randomized, double-blind trial involving 553 patients randomized in a 2:1 ratio for dalbavancin:intravenous cefazolin followed by oral cephalexin. The primary endpoint was clinical response at the follow-up visit in the evaluable patient population. Evaluable patients taking dalbavancin demonstrated an 89.1% response versus 89.1% for cefazolin (95% confidence interval -6.8, 6.8), which met the pre-determined criterion for non-inferiority. In the ITT group, dalbavancin patients showed a 76.0% response versus a 75.8% response for cefazolin (95% confidence interval -7.7, 8.2) demonstrating non-inferiority. Dalbavancin was well tolerated in this trial.

In addition, in October 2003, we initiated another Phase 3 clinical trial to evaluate the safety and efficacy of dalbavancin versus vancomycin in SSTIs in patients at risk for methicillin-resistant Staphylococcus aureus, or MRSA. In August 2004, we announced the results from this randomized, controlled, open-label trial of 156 patients randomized in a 2:1 ratio versus vancomycin in SSTIs suspected or confirmed to be caused by MRSA. The primary endpoint was clinical response at the follow-up visit in the evaluable patient population. Evaluable patients taking dalbavancin demonstrated an 89.9% response versus 86.7% for vancomycin (95% confidence interval -13.0, 19.4). In the ITT group, dalbavancin patients showed an 86.0% response versus 65.3% for vancomycin (95% confidence interval 4.3, 37.0). Dalbavancin was well tolerated in this trial. This trial is not pivotal, but was included with the NDA submission.

In addition to the SSTI trials, we have completed a Phase 2 clinical trial of dalbavancin administered weekly versus vancomycin for the treatment of catheter-related blood stream infections, or CR-BSI. In January 2004, we released results of this trial, which demonstrated the superiority of dalbavancin over vancomycin, a standard of care for this disease. This randomized, comparative, open-label trial enrolled 67 patients with CR-BSI due to a Gram-positive organism. The primary endpoint was the combined clinical and microbiological response at follow-up. The overall response rate was 87% for dalbavancin which was statistically superior to 50% for vancomycin.

Ramoplanin

Our third product candidate, ramoplanin, is an oral non-absorbable form of antibiotic called a lipopeptide. Ramoplanin selectively inhibits Gram-positive bacteria, including MRSA, and all types of vancomycin-resistant enterococci, or VRE, and Clostridia, including Clostridium difficile. Ramoplanin does not show a propensity to select resistant mutants in vitro and does not have cross-resistance with known antibiotics. Oscient Pharmaceuticals Corporation, formerly Genome Therapeutics Corp., our licensee in North America, is developing ramoplanin. Oscient Pharmaceuticals initiated a Phase 3 clinical trial for the reduction of VRE bloodstream infections in patients at risk in June 2000. However, our licensee announced in July 2004 that it prematurely terminated enrollment in this trial because of slow enrollment. Oscient Pharmaceuticals also recently completed a Phase 2 clinical trial of ramoplanin for the treatment of Clostridium difficile-associated diarrhea, or CDAD, and data have been publicly presented. Pending the completion of full analysis of the Phase 2 data and the outcome of planning discussions with the FDA, Oscient Pharmaceuticals has indicated that it expects to commence a Phase 3 clinical trial in CDAD by the end of this year.

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VIC-Acne

Our fourth product candidate, VIC-Acne, is a novel antibiotic which we are developing as a topical cream. VIC-Acne has a new mechanism of action and shows selective activity against Propionibacterium acnes, a bacteria associated with acne, including drug resistant strains, while it shows only modest activity against normal skin flora. As a result, it might have the potential to selectively eliminate the Propionibacterium acnes without significantly affecting the natural skin flora. We completed a Phase I clinical trial with VIC-Acne in the second quarter of 2003 which showed that the drug was safe and well-tolerated. We plan to out-license this product candidate to a company with a dermatology business who will agree to develop and commercialize the product candidate. We would expect to receive milestone payments and a royalty on our contemplated licensee’s sales.

VIC-5555

VIC 5555 is the lead product candidate in our lincosamide research program. It is designed as an improvement of clindamycin, an antibiotic often used for anerobic bacterial infections. VIC-5555 has shown improved in vivo and in vitro activity when compared to clindamycin. We plan to file an IND for VIC-5555 in 2005.

Research Collaborations

Our most advanced collaboration is with Novartis Pharma AG and is designed to develop deformylase inhibitors as new antibacterial agents and to provide novel target-based screens. Deformylase is an essential enzyme in bacteria but not in human cells, and thus represents a good target for the discovery of selective inhibitors that can serve as broad spectrum antibacterial agents. We have identified several lead inhibitor molecules that are active against multi-drug resistant strains, as well as respiratory pathogens such as S. pneumoniae, H. influenzae and M. catarrhalis. Several lead compounds have demonstrated activity in pre-clinical in vivo studies when administered orally, representing an example of the de novo design of an active antibacterial agent. Our collaboration with Novartis began in April 1999. In January 2002, we received a fifth milestone payment as a result of our delivery of our fifth target-based screen, which we expect will be used in Novartis’ high-throughput screening laboratory to identify new anti-infectives. In March 2002, we amended the original agreement in order to extend the research term an additional year and to provide that Novartis will make an additional payment upon our achievement of a new milestone. In February 2003, we amended the original agreement in order to extend the research term through March 31, 2005. In September 2003, we announced that we received a milestone payment from Novartis for achieving a late-stage pre-clinical milestone and in December 2003, we received a further milestone payment associated with the entry into Phase 1 of a drug candidate stemming from the ongoing research collaboration with Novartis. In March 2005, we announced that Novartis has opted to suspend the Phase 1 compound and intends to advance a second compound. We received a milestone for the designation of this second compound as a late stage preclinical compound.

Our second most advanced collaboration is with Pfizer Inc. and is aimed at discovering second and third generation oxazolidinones. The oxazolidinones represent one of the first new major classes of antibacterial products to enter the market in over 30 years. In test tubes, our collaboration compounds are active against a broad range of bacteria, including multi-drug resistant Staphylococci, Streptococci and Enterococci. Pfizer received approval from the FDA, independent of us, for the first generation oxazolidinone called Zyvox^™. We have identified several structurally novel second generation oxazolidinone candidates, certain of which have either a broader spectrum of activity or improved potency as compared to Zyvox^™. Some of these compounds also show good activity in pre-clinical in vivo studies when administered orally. This collaboration began in April 1999 with Pharmacia Corporation, and continued when Pharmacia was acquired by Pfizer. In October 2000, Pfizer increased its research support payments to us by 30% and, in June 2002, we amended our agreement with Pfizer to extend the research term for an additional three years. In May 2003, we announced an agreement to continue this collaboration with Pfizer after their acquisition of Pharmacia, our original collaborator.

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Another collaboration program is called “VITACHEM” and is designed to investigate the pharmaceutical and non-pharmaceutical utility of our collection of microbial chemicals in markets outside of the anti-infectives market. We offer two types of collaborations under the VITACHEM program: fee-for-service collaborations, under which our collaborators pay us research fees, plus milestone payments and royalties calculated as a percentage of net sales; and equal collaborations, based on cost-sharing and reward-sharing. Currently, we have one equal collaboration—with Myriad Genetics Inc. on oncology, cardiovascular and viral targets.

Internal Discovery Research

In addition to our external research collaborations, we have internal research programs both in the United States and in Italy. The objective of internal research is primarily to discover novel antimicrobials for hospital use for development by us. This effort combines our internal expertise in functional genomics-based target selection, novel assay development, mechanism-based rational drug design, combinatorial chemistry, high-throughput screening of our diversified library of microbial extracts and medicinal chemistry. We are currently investigating several in vivo active leads.

Our Strategy

Our objective is to be a leader in the discovery, development and marketing of pharmaceutical products for the treatment of bacterial and fungal infections in the hospital setting. We intend to achieve this goal through the implementation of four strategies:

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Our Proprietary Product Candidates

The table below summarizes our product candidates, their target infections, their nature of activity and their development status.

Anidulafungin—A Novel Antifungal for the Treatment of Serious Infections

Clinical Experience

On the basis of Phase 1 dose ranging studies and a successful Phase 2 study, we began a pivotal Phase 3 trial of anidulafungin for the treatment of esophageal candidiasis in the first quarter of 2001 and completed enrollment in October 2002. In this randomized, double-blind, double-dummy trial involving 601 patients, we compared anidulafungin at a daily maintenance dose of 50 mg with oral fluconazole at a 100 mg daily dose. Treatment continued for between 14 and 21 days, with the primary assessment of response made at the end of therapy. Additional evaluations were made at a follow-up visit approximately two weeks later. Endoscopic response was the primary endpoint, with both clinical responses and eradication of fungi as secondary endpoints. In early 2003, we completed this clinical trial. The Phase 3 esphogeal candidiasis trial demonstrated a 97.2% endoscopic response for anidulafungin (N=249) versus a 98.8% endoscopic response for fluconazole (N=255) at the primary endpoint at end of treatment.demonstrating non-inferiority (95% confidence interval of the difference: -4.1, 0.8). The endoscopic response at follow-up, a secondary endpoint, was 64.4% for anidulafungin versus 89.5% for fluconazole which was statistically significant (95% confidence interval of the difference: -32.5%, -17.8%).

Based in part on the results of that trial, in April 2003 we filed an NDA for anidulafungin for the treatment of esophageal candidiasis, which was accepted for review by the FDA in June 2003. We received a 90-day review extension due to a major amendment. In May 2004, we received an approvable letter from the FDA indicating that the NDA submission for anidulafungin did not currently support a labeling claim for the initial

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treatment of esophageal candidiasis. In the approvable letter, the FDA provided that its basis for this conclusion was that we had not presented sufficient efficacy and safety data to establish a satisfactory risk/benefit rationale for the use of anidulafungin in the initial treatment of esophageal candidiasis, including the relapse rate at the two-week post-therapy visit. We intend to address these matters with the submission of additional efficacy and safety data as described below.

We plan to file an amendment to the esophageal candidiasis NDA, which will provide supplemental efficacy and safety data largely at the 100 mg dose, including data from our completed invasive candidiasis/candidemia Phase 3 clinical trial. We expect to submit the amendment in the second quarter of 2005. Under this timeline, the fourth quarter of 2005 is the earliest anidulafungin could be approved for this indication

We intend to file a new NDA for anidulafungin for the treatment of invasive candidiasis/candidemia with updated efficacy and integrated safety data, including data from our completed Phase 3 clinical trial, the results of which were released in February 2005. We plan to submit the NDA for this indication in the third quarter of 2005.

We began the Phase 3 clinical trial of anidulafungin for invasive candidiasis/candidemia in December 2002 and announced the completion of enrollment in September 2004. This double-blind, multi-center, randomized Phase 3 trial studied a 100 mg daily dose of anidulafungin versus a 400 mg daily dose of fluconazole in 256 patients with invasive candidiasis/candidemia. Patients received daily intravenous, or IV infusions of either anidulafungin or fluconazole for 10 to 42 days. The primary endpoint was the global response at the end of IV therapy, which required a successful clinical and a successful microbiological response.

Success in the global response at the end of IV therapy in the microbiological ITT population, the primary endpoint, was 75.6% (96/127) of patients with anidulafungin and 60.2% (71/118) with fluconazole. These results demonstrate statistical superiority (95% confidence interval of the difference: 3.85, 26.99) in favor of anidulafungin.

The secondary endpoint of successful global response at the two-week follow up visit in the microbiological ITT population was observed in 64.6% (82/127) of patients in the anidulafungin arm and 49.2% (58/118) of patients in the fluconazole arm, again demonstrating statistical superiority (95% confidence interval of the difference: 3.14, 27.68).

The secondary endpoint of successful global response at the six-week follow up visit in the microbiological ITT population was observed in 55.9% (71/127) of patients in the anidulafungin arm and 44.1% (52/118) of patients in the fluconazole arm demonstrating non-inferiority (95% confidence interval of the difference: -0.6, 24.28). Anidulafungin demonstrated comparable tolerability to fluconazole in the study.

Global Response

We began a Phase 2/3 trial of anidulafungin for the treatment of aspergillosis in the fourth quarter of 2001. Aspergillosis has a very high rate of mortality, therefore, new therapies are urgently needed. For this reason, and because our Phase 1 trial demonstrated that higher doses of anidulafungin were well-tolerated by volunteers, we have taken an anidulafungin dose of a 200 mg loading dose followed by daily maintenance doses of 100 mg directly into our Phase 2/3 trial. This open-label, non-comparative study enrolled 30 hospitalized patients with a

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diagnosis of invasive aspergillosis. A single daily intravenous infusion of anidulafungin and a single daily intravenous infusion of a lipid-complexed formulation of amphotericin B was administered to patients for up to 90 days. The primary endpoint was combined global response, i.e., clinical and radiographic responses, at the conclusion of therapy. We believe that the results of this clinical trial demonstrate that anidulafungin and liposomal amphotericin can be combined without increasing side effects.

Characteristics of Anidulafungin

Anidulafungin, our lead antifungal product candidate, belongs to the echinocandin class of antifungal agents. It is being developed for the treatment of serious fungal infections, including disseminated or bloodstream infections, organ infections and esophagitis, or severe infections of the esophagus. The most serious fungal infections generally occur in individuals who have impaired immune systems. In vitro anidulafungin is fungicidal for Candida, which means that it kills, rather than just inhibits, the pathogen. Anidulafungin is active against candida and aspergillus strains resistant to azoles, such as fluconazole.

Anidulafungin is a chemically modified derivative of a natural product that was chosen for development because of its improved properties over existing treatments. In May 1999, we obtained an exclusive worldwide license for its development and commercialization from Eli Lilly.

As compared with current therapies, we believe that anidulafungin has a number of potential advantages, including the following:

The above table was published in Antimicrobial Agents and Chemotherapy, 2003.

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In vitro data also demonstrated that to inhibit growth of Aspergillus fumigatus, less anidulafungin is needed as compared with existing agents voriconazole, itraconazole, caspofungin and amphotericin B (Diagnostic Microbiology and Infectious Disease 2003-45 131-135).

As compared with other antifungal agents, these data illustrate that anidulafungin is more potent in vitro than available therapies. Anidulafungin also demonstrated impressive activity in a variety of animal models of Candida and Aspergillus infection. These included quite severe infections in immunosuppressed animals, such as disseminated infections and pulmonary aspergillosis. Efficacy was shown against different species and strains of Candida, including strains resistant to fluconazole. For example, in animal models the number of Candida in the liver, spleen, kidneys and lungs were reduced by 99.99% at the anidulafungin dosage of 0.5 mg/kg. In animals infected with Aspergillus, 80% of those treated with 2.5 mg/kg/day of anidulafungin survived until the end of the experiment (ten days), whereas all untreated animals died within four days.

Dalbavancin—A Next-Generation Antibiotic for the Treatment of Serious Gram-Positive Infections

Clinical Experience

Dalbavancin is a novel next-generation lipoglycopeptide antibiotic, a chemically modified derivative of a natural product. We are developing dalbavancin as an alternative to vancomycin for the treatment of serious Gram-positive infections, predominantly in hospitalized patients. Dalbavancin has potent in vitro activity against Gram-positive bacteria. In particular, we are targeting infections caused by Staphylococci, including methicillin-resistant strains, the principal indication for vancomycin. Serious infections caused by Staphylococci include skin and soft tissue infections, bloodstream infections and osteomyelitis. An additional advantage of dalbavancin is its ease of administration, because of its once weekly dosing regimen.

We also initiated a Phase 2 trial in catheter-related bloodstream infections in the first quarter of 2002. In January 2004, we announced the results of this Phase 2 clinical trial for catheter-related bloodstream infections which demonstrated that dalbavancin showed superior activity to vancomycin, a current standard of care for the treatment of Gram-positive catheter-related bloodstream infections (CR-BSI). The Phase 2 CR-BSI trial enrolled 67 patients who were randomized to receive either dalbavancin (one gram on day one, 500mg on day eight) or 14 days of twice daily vancomycin. At the primary endpoint, the follow-up visit in evaluable patients, dalbavancin had an overall success (clinical and microbiological) of 87.0% (20/23) versus vancomycin 50.0% (14/28) in the microbiological ITT population, which was statistically significant. CR-BSIs are one of the most common hospital-acquired infections.

In December 2002 we started two Phase 3 trials with dalbavancin for the treatment of SSTIs. These randomized, double-blind trials each enrolled at least 550 patients who were examined for overall clinical and

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microbiological responses at the conclusion of therapy. In the first trial, patients with cSSTIs received either a one gram intravenous dose of dalbavancin on study day one followed by a 500 mg dose on study day eight or approved doses of linezolid for 14 days. In the second study, patients with uncomplicated skin and soft tissue infections received either a one gram intravenous dose of dalbavancin on study day one, with the option of adding a 500 mg doses on study day eight, or intravenous cefazolin, followed by oral cephalexin. On day eight, the investigator decided the duration of the study medication therapy (seven or 14 days) based on the clinical status of the patient.

In addition, in October 2003 we initiated another Phase 3 clinical trial, which will include up to 150 patients to evaluate the safety and efficacy of dalbavancin, relative to vancomycin, one of the current standards of care for the treatment of SSTIs. Patients received either dalbavancin, one gram intravenous dose on day one plus 500 mg on day eight, or approved daily doses of vancomycin for 14 days.

In August 2004, we announced results from our three Phase 3 SSTI studies.

Phase 3: cSSTI

Phase 3: uSSTI

Phase 3: At Risk for MRSA