Aerovance Secures $38 Million in Equity Financing

BERKELEY, Calif., April 7 /PRNewswire/ -- Aerovance Inc. today announced that
it has secured $38 million in additional equity financing. In previous
transactions since formation in 2004, the company has raised $92 million in
equity financing and $10 million in debt financing.

This financing round, which consists of two tranches, was led by new investor
ProQuest Investments and includes the full pro rata participation of existing
investors Apax Partners, Clarus Ventures, Alta Partners, Lehman Brothers, NGN
Capital and Burrill & Co., as well as that of new investor BB Biotech
Ventures. Aerovance closed on $20 million and has the right to call the
remaining $18 million after six months.

The financing will support the company's recently initiated Phase IIb clinical
trial of inhaled Aerovant(TM) in patients with uncontrolled asthma and Phase
III enabling activities for this program. These activities will include
scale-up of the dry powder spray-drying process and preparation for a
long-term toxicology study.

In connection with the financing, Alain Schreiber, M.D., a partner with
ProQuest Investments, will join Aerovance's board of directors. Ann Hanham,
Ph.D., a managing director with Burrill & Company-and an original investor in
Aerovance, will also join the company's board of directors. Hingge Hsu, M.D.,
a former partner with Lehman Brothers, will step down from his role as a board
member.

"Our investment in Aerovance is in line with ProQuest's strategy of targeting
companies with breakthrough technology and products, proven management, large
market potential and achievable business strategies," said Dr. Schreiber.

Mark Perry, Aerovance's president and CEO, said: "This significant capital
raise at a time of great challenge and uncertainty in the financial markets is
an important indication of investor enthusiasm for our lead candidate,
Aerovant. We are pleased to advance Aerovant into the Phase IIb study,
AeroTrial(TM), to evaluate the compound's safety and efficacy in patients
living with uncontrolled asthma."

We welcome both Alain Schreiber and Ann Hanham to our board of directors. They
have extensive drug development and commercialization expertise that
complement the experience of our existing board members and senior management
team. On behalf of our board, I would like to thank Hingge Hsu for his
numerous contributions and valuable guidance since Aerovance's formation."

Aerovant is a recombinant human IL-4 variant that is a potent inhibitor of
both the IL-4 and IL-13 receptors. Aerovance acquired the worldwide rights to
the drug candidate when the company was formed as a spin-out of Bayer
Pharmaceuticals Corporation in 2004. Aerovant is currently in a Phase IIb
clinical trial for the treatment of uncontrolled asthma.

AeroTrial is a late-stage clinical study using a dry powder formulation and
follows positive clinical data from two Phase IIa studies in which Aerovant
demonstrated significant benefit in asthmatics who were experimentally
challenged with inhaled allergen (The Lancet 2007, 370: 1422-31). The dry
powder formulation that will be used in AeroTrial was well tolerated in a
recently completed Phase I study in asthmatics. By using a medication based on
a protein occurring naturally in the body, AeroTrial seeks a non-steroidal
solution to getting control of asthma. For more information, visit
www.aerotrial.com.

Aerovance Inc. is a Berkeley, Calif.-based biopharmaceutical company focused
on the development and commercialization of breakthrough therapies for the
treatment of respiratory and inflammatory diseases. For more information,
visit www.aerovance.com.

Contact: Andreas Marathovouniotis or David Schull
Russo Partners
212-845-4235 or 212-845-4271
andreas.marathis@russopartnersllc.com
david.schull@russopartnersllc.com

Dave Happel
Aerovance Inc.
510-549-5525
dave.happel@aerovance.com

SOURCE Aerovance Inc.

Andreas Marathovouniotis, +1-212-845-4235,
andreas.marathis@russopartnersllc.com or David Schull, +1-212-845-4271,
david.schull@russopartnersllc.com, both of Russo Partners; or Dave Happel,
Aerovance Inc., +1-510-549-5525, dave.happel@aerovance.com