months, we plan to take advantage of the opportunity to present XOPENEX HFA’s unique attributes and underscore XOPENEX HFA’s appropriate role in the treatment of these patients.

BROVANA™ Brand Arformoterol Tartrate
We successfully achieved U.S. Food and Drug Administration (FDA) approval of BROVANA as a longterm maintenance treatment of COPD, in October 2006. Today, COPD is the fourth leading cause of death in the U.S. There are more than 12 million people in the U.S. diagnosed with COPD. An estimated 24 million people have evidence of impaired lung function as seen with COPD, indicating that COPD may be underdiagnosed, and the incidence of COPD in this country is expected to increase. BROVANA is the first approved long-acting bronchodilator that can be inhaled with the use of a nebulizer. Since COPD typically develops later in life, and older adults frequently favor inhaling their medications with the use of a nebulizer, we believe that this differentiated product will be a welcome addition for patients with COPD and the physicians who care for them.

We plan to complete our launch preparations and commercially introduce BROVANA during the second quarter of 2007. Upon launch, our sales force will promote BROVANA in hospitals and to primary care physicians and pulmonologists who treat patients with COPD.

Research & Development Pipeline
In addition to the ongoing clinical activities relating to commercialized products, we advanced SEP-227162, a serotonin and norepinephrine reuptake inhibitor, into Phase I for the treatment of depression.We have also completed a Phase I study for SEP-225289, which is a serotonin, norepinephrine and dopamine triple reuptake inhibitor that we are investigating for treatment of patients with depression who do not respond after a trial use of an antidepressant.We expect to advance both candidates into Phase II proof-of-concept studies in 2007.

Increasingly, our focus will be on future opportunities in the form of candidates that we generate from our internal

discovery capabilities. In 2007, we expect to substantially increase our overall commitment to research and development, particularly to our discovery efforts.

It is also our objective to move at least two new compounds from our discovery programs through to Investigational New Drug (IND) application submissions to the FDA in 2007.We are currently focused on four main initiatives:

We believe that these mechanisms hold great promise as new treatment paradigms for depression, anxiety, cognition, schizophrenia and neuropathic pain.

We are committed to the success of our shareholders and our employees, and to the welfare of the patients we serve. We believe 2006 was a year in which the company achieved several significant milestones, which should contribute to the long-term success of all of our stakeholders.

We look forward to reporting on our continued progress in the future.

Sincerely,

Timothy J. Barberich
Chairman and Chief Executive Officer

Adrian Adams
President and Chief Oprating Officer