Tercica Initiates Phase II Clinical Trial with Next-Generation Growth Hormone Product...

Tercica Initiates Phase II Clinical Trial with Next-Generation Growth Hormone Product for the Treatment of Short Stature

BRISBANE, Calif.--(Business Wire)--Tercica, Inc. (NASDAQ: TRCA) today announced that the Company has
begun dosing the first patient in a Phase II clinical study evaluating
the combination of Genentech, Inc.'s recombinant human growth hormone
Nutropin AQ(R) (somatropin (rDNA origin)) and Tercica's recombinant
insulin-like growth factor-1 Increlex(R) (mecasermin (rDNA origin)
injection). The primary objective of this trial is to assess the
efficacy, measured as first-year height velocity, and safety of three
different combination regimens of growth hormone and IGF-1 compared to
growth hormone alone in the treatment of short stature associated with
IGF-1 deficiency.

"With demonstrated synergies in pre-clinical studies, the
combination of growth hormone and IGF-1 could have the potential for
several important therapeutic benefits compared to either growth
hormone or IGF-1 monotherapy alone for the treatment of patients with
short stature," said John A. Scarlett, M.D., Tercica's President and
Chief Executive Officer. "We are pleased to be starting the Phase II
clinical trial just six months after signing the agreement with
Genentech," continued Dr. Scarlett.

Development of GH/IGF-1 Combination Product in Short Stature

Potential of GH/IGF-1 Combination Product: The combination product
will be studied in children with short stature not associated with
growth hormone deficiency, who also have low IGF-1 levels. A potential
cause of short stature in this group of patients could be a suboptimal
IGF-1 secretion in response to growth hormone stimulation alone.
Pre-clinical studies suggest that co-administration of GH and IGF-1
may increase specific growth responses greater than growth hormone
alone. Therefore, Tercica believes that treatment with a combination
of both GH and IGF-1 may be superior to monotherapy of growth hormone
alone in a subpopulation of children with low IGF-1 and short stature
not associated with growth hormone deficiency.

Study design: This Phase II study, referred to as MS316, is a
randomized clinical trial comparing three different combination
regimens to growth hormone alone. The three combination arms each
contain a different ratio of IGF-1 to growth hormone. The primary
efficacy endpoint is height velocity during the first 12 months of
therapy. After evaluation of the primary endpoint, the study will be
continued to evaluate long-term effects. Approximately 100 patients
will be enrolled in the study. Tercica expects to complete enrollment
in mid-2009.

About the Genentech and Tercica Agreement

In July 2007, Tercica and Genentech entered into an agreement for
the development, manufacture and worldwide commercialization of two
products containing Genentech's recombinant human growth hormone
Nutropin AQ(R) and Tercica's recombinant insulin-like growth factor-1
Increlex(R). One product is for the treatment of short stature, and
the other product is for the treatment of adult growth hormone
deficiency (AGHD) and potentially other metabolic disorders.

According to the agreement terms, Genentech has certain rights to
opt-in to the development programs for both products. The opt-in
rights remain open until completion of a Phase II clinical study for
each product that is sufficient to enable a pivotal trial.

Upon exercise of any opt-in by Genentech, Genentech shall
reimburse certain incurred research and development costs. Following
such exercise by Genentech, a cost and profit share structure will
take effect for all future development and commercial activities of
combination products, and both Tercica and Genentech will have certain
commercialization rights, including the right to co-promote
combination products upon regulatory approval. If Genentech does not
exercise any of its opt-in rights, then Tercica will have full
development and commercialization rights to the combination products,
and will owe Genentech royalties on worldwide sales.

About Tercica

Tercica is a biopharmaceutical company committed to improving
endocrine health by partnering with the endocrine community to develop
and commercialize new therapeutics for pediatric and adult growth
disorders, and for adult metabolic disorders. For further information
on Tercica, please visit www.tercica.com.

Safe Harbor Statement

Except for the historical statements contained herein, this press
release contains forward-looking statements concerning Tercica's
prospects and expectations, including without limitation, that
Tercica: (A) believes treatment with a combination of both GH and
IFG-1 may offer several important therapeutic benefits or be superior
to monotherapy; and (B) expects to complete enrollment in the trial by
mid-2009. Because Tercica's forward-looking statements are subject to
risks and uncertainties, there are important factors that could cause
actual results to differ materially from those in the forward-looking
statements. These factors include, without limitation, risks and
uncertainties related to the following: (i) despite the encouraging
data in the pre-clinical studies, the combination therapy may not
result in safe or efficacious treatment in humans; (ii) due to the
uncertainty of enrollment for any clinical trial, the enrollment may
not be completed in mid-2009; and (iii) the risks and uncertainties
disclosed from time-to-time in reports filed by Tercica, including
most recently Tercica's Form 10-Q for the quarter ending September 30,
2007 filed with the SEC on November 1, 2007. Tercica disclaims any
obligation or undertaking to update or revise any forward-looking
statements contained in this press release.

Investor and Media Contact:
Tercica, Inc.
Fredrik Wiklund
Senior Director, Investor Relations &
Corporate Development
650-624-4992
fredrik.wiklund@tercica.com

Copyright Business Wire 2008