Phenomix Initiates Phase 2b Clinical Trial of Phx1149 for Type 2 Diabetes; Will Present Phx1149 Data At EASD

San Diego, CA, September 11, 2007 Phenomix Corporation, a drug discovery and development company, announced today the initiation of a Phase 2b clinical trial of PHX1149, an internally discovered product candidate for the treatment of Type 2 diabetes. The trial is being conducted at multiple sites worldwide and will assess the safety and efficacy of PHX1149 in combination with anti-diabetes medications for Type 2 diabetes. PHX1149 is a novel orally administered inhibitor of the protease dipeptidyl peptidase-4 (DPP4).

In Phenomix' double-blind, randomized, placebo-controlled Phase 2b study, patients with Type 2 diabetes who are currently receiving metformin, a glitazone, or metformin and a glitazone will be treated with either 200 milligram or 400 milligram doses of PHX1149, or placebo, administered orally, once daily over a 12-week period. The primary efficacy endpoint of the study is hemoglobin A1c (HbA1c). Secondary endpoints will measure postmeal glucose and fasting blood glucose. The trial will evaluate approximately 400 patients. After completing the 12-week blinded trial, study participants will be allowed to enroll in an open label extension study and will be monitored on PHX1149 therapy for up to two years.

"PHX1149 really hit the mark in the completed four-week Phase 2a proof of concept study. We are excited to expand those results in the ongoing, larger 12-week study to obtain additional data supporting the safety and efficacy of our drug," said Julie M. Cherrington, Ph.D., executive vice president of research and development for Phenomix. "The extension phase of the 2b study will provide us with long-term safety data, which will be important for registration of PHX1149."

Safety and efficacy data from Phenomix' successfully completed Phase 2a trial of PHX1149 will be presented on September 19, 2007 in Amsterdam at the 43rd Annual Meeting of the European Association for the Study of Diabetes. The abstract, entitled "PHX1149, a selective DPP4 inhibitor, improves postprandial blood glucose control in patients with Type 2 diabetes," will be presented by Hans-Peter Guler, M.D., vice president of clinical development for Phenomix. As previously reported by Phenomix, statistical analyses of the Phase 2a trial data showed that the study reached its primary endpoint by demonstrating significant improvement of postprandial blood glucose levels across all dose levels with once daily dosing. Potent, durable inhibition of DPP4 was achieved throughout the 24-hour period post PHX1149 administration. There was no apparent pattern of drug related adverse events and PHX1149 demonstrated a tolerability profile comparable to placebo at all dose levels tested. The favorable tolerability data are consistent with the high selectivity of this compound, along with its low peak-to-trough pharmacokinetic characteristics, low cellular permeability, and low volume of distribution.

Type 2 diabetes is reaching epidemic proportions and is a health risk for a significant percent of the industrialized and developing world population. There is a pressing need for new safe and effective therapies. PHX1149 is a potent and selective inhibitor of DPP4, a serine protease that has emerged as an important target for the treatment of Type 2 diabetes. Inhibiting DPP4 increases the physiological levels of regulatory peptides, such as GLP-1, which is an important modulator of postmeal glucose control.

About Phenomix Corporation

Phenomix is a drug discovery and development company building a portfolio of internally discovered, novel therapeutics for the treatment of major human diseases. Phenomix' lead program, PHX1149, is a DPP4 inhibitor in Phase 2b clinical trials as a once daily oral treatment for Type 2 diabetes. Phenomix' second program is directed at the treatment of hepatitis C infections through inhibition of the NS3/4A viral protease. Phenomix is based in San Diego, California. For more information, visit www.phenomix.com.