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PTIE and KG Sign $400 million Deal

In November 2005, we entered into a strategic alliance with King Pharmaceuticals, Inc. (NYSE: KG) to develop and commercialize Remoxy and other abuse-resistant opioid painkillers. The value of the alliance could exceed $400 million, plus royalties.

Under the terms of the alliance, King made an upfront payment of $150 million in cash to Pain Therapeutics. PTI will receive additional milestone payments of up to $150 million in cash for the successful clinical and regulatory development of Remoxy and other abuse-resistant opioids. King is responsible for all R&D expenses related to this alliance, which could total $100 million.

PTI has sole responsibility for Remoxy´┐Żs drug development through the completion of Phase II trials. PTI and King will jointly manage Phase III and U.S. NDA submissions. Upon receiving regulatory approval, King will be solely responsible for exclusively commercializing Remoxy and additional abuse-resistant opioids.

King will record net sales of all products and pay Pain Therapeutics a 20% royalty, except for the first $1 billion in cumulative net sales, which royalty is set at 15%.