Cobalis commenced Phase III Clinical Trials for PreHistin™ in November 2004, when the Company engaged its first Phase III study with four arms and 714 patients during the Mountain Cedar allergy season in central Texas. The primary endpoint of the study was reduction in Total Nasal Symptom Score (TNSS). In July 2006, Cobalis began two twin 10 week pivotal trials with 1551 patients designed to determine the efficacy and safety of 3.3mg of PreHistin BID versus placebo in seasonal ragweed sufferers, with the primary endpoint being the TNSS for weeks 4, 5 and 6. Data from the Mountain Cedar study were used to design the pivotal ragweed studies.

Phase III trials are conducted to provide data for statistical evaluation of efficacy and safety, with an end result of FDA approval for specific marketing claims and required packaging disclosure and documentation. Government regulation in the US is a significant factor in the production and marketing of new drugs. The FDA must approve all new OTC and prescription drugs, which includes any new use for a substance, even if previously used safely for a different purpose. In the US, companies are subject to rigorous requirements in order to engage in human clinical testing to, in turn, gain approval of a drug.

The primary indication being studied was the reduction of the symptoms of seasonal allergic rhinitis (outdoor allergies or hay fever).

Based on the FDA's requirement, two sets of well-controlled, multi-site, double-blind, placebo-controlled studies were conducted. Cobalis enrolled 714 patients in its first Phase III study which commenced in late 2004. The study included three treatment arms and a placebo arm to evaluate the effectiveness and safety of different treatment regimens. Results of this study demonstrated reduced allergy symptoms compared with placebo, and provided the basis for design of our twin pivotal studies intended to meet the FDA’s approval requirements.

In July 2006, the Company commenced two twin Phase III Trials across the eastern and mid-U.S. ragweed allergy regions. These pivotal studies enrolled a total of 1551 ragweed sensitive seasonal allergy patients in central and eastern United States with demonstrated history of moderate to moderately severe allergy to ragweed. Each study had two arms, consisting of a placebo lozenge BID and 3.3mg cyanocobalamin BID, and a primary endpoint of reduction in TNSS for weeks 4,5, and 6. Patients received PreHistin or placebo for six weeks, beginning two weeks prior to the expected onset of the ragweed allergy season, and were to maintain symptom diaries for an additional four weeks, for a total of ten weeks. Our observations and belief were that a low pollen count contributing to reduced nasal symptom severity scores in both groups during the study rendered the outcome inconclusive. Importantly, though, the PreHistin treated group had a definite blunting of increase in serum ragweed specific IgE levels from pre-treatment to post-treatment (in kU/ml): the average for the 737 PreHistin patients increased from 6.27 to 7.68 (increase of 1.41), compared to the average for the the 735 placebo patients increase from 6.34 to 9.20 (increase of 2.86), a difference of 1.50 between the groups. Ig E levels in allergic individuals generally increase during the allergy season. PreHistin blunted this expected seasonal rise in IgE. Additionally, the PreHistin treated group demonstrated a significant average increase of more that 250% in post-treatment blood serum cobalamin (Vitamin B12) levels across two PreHistin treated patient groups compared with essentially no B12 level increase in placebo treated patients.

Cyanocobalamin, the primary active ingredient in PreHistin™, has been extensively studied and has an established safety record.

Clinical Trials and Product Milestone Timetable

• First Phase III Clinical Trial completed with 714 patients in Texas in 2004 - 05
• Pivotal twin Phase III Clinical Trials commenced July 2006 and completed November 2006
• PreHistin sales and marketing as a Dietary (Cobalamin) Supplement successfully launched in May 2009
• Further Phase III clinical trials are planned in order to seek FDA approval as an over-the counter allergy medication for seasonal allergic rhinitis

Supplemental Indications Timetable

Cobalis may sponsor clinical research for approval of additional indications.

• Conduct pediatric clinical trials for seasonal allergic rhinitis for gaining FDA approval of supplementary indication of PreHistin™ for pediatric use
• Consider conducting clinical trials for gaining FDA approval of supplementary
  indication of atopic asthma
• Consider conducting clinical trials for gaining FDA approval of supplementary
  indication for atopic migraine

Additional Delivery Mechanisms Timetable

Cobalis may also consider sponsoring and conducting studies to develop and gain marketing approval for additional delivery mechanisms.

– Conduct bio-equivalency studies to determine additional delivery mechanisms that can provide similar or greater delivery to the bloodstream as the sublingual lozenges; Mechanisms being considered include quick dissolve tablets, chewing gum, liposomal spray, drops, rice paper, transdermal patch and others.

Read PREHISTIN™ INDICATIONS PREHISTIN™FOR THE PREVENTION OF SEASONAL ALLERGIC RHINITIS (HAY FAVER).