Ardana: On the way up

Taken from Piper Jaffrays research note on the 20th, which should answer your query:

Teverelix LA - Watch this space for licensing deal

Teverelix LA is a long-acting formulation of Teverelix that blocks gonadotropin releasing hormone (GnRH) receptors. GnRH
stimulates the production of male and female sex hormones and hence its inhibition has potential as a treatent for prostate cancer,
benign prostatic hypertrophy and endometriosis, which are diseases that can be controlled by reducing the production of sex hormones.

During the year Ardana has delivered positive preliminary phase I results for Teverelix in Endometriosis and today announced further
positive data from a phase IIb trial in BPH patients. Preliminary analysis of the dose-ranging study (ARD-0301-001) showed that
Teverelix LA, administered as a single injection, demonstrated an improvement in the International Prostate Symptom Score (IPSS)
from week two, with a duration of effect in the order of 8 weeks. Analysis is ongoing and more detail on the statistical significance of
the reduction of IPSS scores and potentially other secondary endpoints will be reported in H1-07, along with the results of a repeat
dose trial, which is currently on-going. These results will enable Ardana to select an optimal dose of Teverelix LA to take forward into
phase III trials. The company believes that a phase III study could be initiated mid-07.

Management 'comfortable' with licensing deal negotiations
A licensing deal for Teverelix LA remains the key catalyst for Ardana and the company remains comfortable that it could sign a
licensing deal before the start of phase III clinical development, and potentially before the end of its financial year in March.

We continue to believe that Teverelix LA ticks all the necessary boxes to make it a highly desirable product, which has been
strengthened further during the last six months by the preliminary phase II results in BPH announced today and the granting of a US
patent, which gives Teverelix LA protection until 2023. We believe that Teverelix LA has potentially best-in-class attributes and could
be on the market in 2009/2010.

In all the indications that it is being developed for, Teverelix targets markets worth almost $10bn currently.

Unjustifiably overlooked. We believe that Ardana continues to be overlooked and
the stock remains undervalued. We are confident about the stock's upside potential,
particularly relating to clinical data and a licensing deal for Teverelix.

Price Target 298p