Xyrem® Demonstrates Overall Improvement for Narcolepsy Patients

Minneapolis, MN - May 25, 2001

Orphan Medical announced positive results of an additional open label clinical trial submitted in its New Drug Application (NDA) for Xyrem® (sodium oxybate) oral solution for narcolepsy. The announcement was made at the Annual Meeting of Shareholders in Minneapolis. Company officials also briefed shareholders on the progress of the Xyrem NDA.

What is Narcolepsy?

Narcolepsy is a chronic neurological disorder affecting an estimated 100,000 to 125,000 Americans, whose main symptoms are excessive daytime sleepiness and cataplexy, (a sudden loss of muscle tone). Narcolepsy patients typically have abnormal sleep architecture, or patterns of sleep stages. This means they don't sleep effectively at night, and cannot maintain effective wakefulness during the day. Narcolepsy may be caused by abnormalities in an area of the brain called the hypothalamus, and has serious social, emotional and economic impact.

Clinical Trial Data

The data from this trial, conducted over a period of 14 weeks with 21 individuals with narcolepsy, demonstrated an overall improvement in both the quality and integration of sleep for narcolepsy patients being treated with Xyrem, as well as a reduction in daytime sleepiness.

According to the company, trial results indicated that:

Xyrem improved the quality of sleep in narcolepsy patients and caused it to be better integrated.

Xyrem produced a dose-related increase in slow-wave (Stage 3-4) sleep, with a corresponding reduction in Stage 1 sleep. Slow wave sleep is the restorative stage of sleep. Delta power, a derived index of all slow wave signals used in the research of sleep, also showed a highly significant increase across all doses. These changes in the restorative components of sleep were accompanied by a decrease in the number of nocturnal awakenings, reaching statistical significance at the 7.5- and 9-gram doses.

After the first night of dosing, a significant and acute increase in REM sleep was measured in all-night recordings. Over the course of the trial as the time spent in stage 3 and 4 sleep increased, the total time spent in the Rapid Eye Movement (REM) stages of sleep decreased. These changes were accompanied by a decreasing trend in the shifts between sleep stages across the doses, although the total sleep time did not change across the length of the trial.

Xyrem Works in Addition to Stimulants That Patients Take to Stay Awake

Individuals with narcolepsy typically take stimulants during the day to help with their daytime sleepiness and to reduce uncontrolled sleep attacks. While still taking their standard doses of stimulants, prior to therapy with Xyrem, the narcolepsy patients in the trial showed a strong tendency to fall asleep quite quickly as measured by the Maintenance of Wakefulness Test (MWT). This daytime test is used to measure how quickly a person falls asleep under controlled soporific conditions while trying to stay awake. Improvement as measured by the MWT was seen after 4 weeks of Xyrem dosing at the 4.5-gram dose. Even greater improvement was seen after 10 weeks of treatment, during which the dose was titrated up to 9 grams per night. Moreover, these results, using the objective MWT measure of daytime sleepiness, were consistent with improvements seen in this study and previous Xyrem studies using a subjective measure of daytime somnolence, the Epworth Sleepiness Scale while these patients maintained stable stimulant dosing.

Narcolepsy patients typically enter into REM sleep soon after falling asleep. This abnormal phenomenon is part of the diagnostic profile of narcolepsy. During MWT testing, the number of patients demonstrating sleep-onset REM episodes decreased significantly, suggesting improvement in narcolepsy status.

Xyrem NDA Status

On October 2, 2000, Orphan Medical submitted a New Drug Application (NDA) for Xyrem, which the Food and Drug Administration has under priority review. A meeting of the Peripheral and Central Nervous System Advisory Committee is scheduled for June 6, 2001, and will provide advice and recommendations to the FDA regarding the safety, efficacy and risk management of Xyrem.

In addition to obtaining the recommendations of the Advisory Panel, the FDA's approval will address:

• The product's indication and labeling
• The distribution system proposed by the Company
• Manufacturing control and Good Manufacturing Procedures (GMP)
• Marketing materials from the Company

Following FDA approval, marketing of Xyrem is expected by the end of the third quarter.