Kosan HSP90 update

KOSAN INITIATES PHASE I CLINICAL TRIAL OF ORAL HSP90 INHIBITOR KOS-1022

Hayward, CA – January 25, 2006 – Kosan Biosciences Incorporated today announced that it has initiated a Phase I multicenter trial of an oral formulation of KOS-1022 (DMAG), a second-generation heat shock protein 90 (Hsp90) inhibitor.

KOS-1022 is the first-reported Hsp90 inhibitor to be administered orally to patients with cancer. “Initiation of clinical testing of an oral formulation of KOS-1022 complements the development program for intravenous KOS-1022 and is an important step in our Hsp90 inhibitor program,” said Daniel V. Santi, M.D., Ph.D., Kosan Chairman and Chief Executive Officer. “In addition, given the convenience of oral dosing compared to intravenous dosing, the capsule formulation of KOS-1022 will allow us to investigate whether more continuous inhibition of Hsp90 will lead to enhanced antitumor activity.”

The Phase I clinical trial of oral KOS-1022 will evaluate the safety, pharmacokinetics, pharmacodynamics, and bioavailability of escalating doses of KOS-1022 in patients with advanced solid tumors, as well as assess any preliminary evidence of antitumor activity. The clinical trial will be conducted at the University of Colorado Health Science Center and the Presbyterian Hospital Medical Center at the University of Pennsylvania.

Intravenous KOS-1022 is currently being evaluated in a company-sponsored Phase I clinical trial in patients with hematologic malignancies as well as multiple Phase I clinical studies in patients with advanced solid tumors sponsored by the National Cancer Institute (NCI) under a Cooperative Research and Development Agreement between Kosan and the NCI Cancer Therapy Evaluation Program. Because of the complementary nature of oral and intravenous KOS-1022, Kosan plans to continue to develop both formulations.

In addition to oral and intravenous KOS-1022, Kosan’s first-generation Hsp90 inhibitor, a proprietary formulation of 17-AAG (KOS-953), is being investigated by Kosan in a Phase II clinical trial in combination with trastuzumab (Herceptin®) in patients with Her2 positive breast cancer, as well as clinical trials in patients with relapsed refractory multiple myeloma (both as single-agent and in combination with bortezomib (Velcade®)). Kosan may initially seek approval for KOS-953, in combination with Velcade, to treat relapsed refractory multiple myeloma. In 2004, Kosan obtained orphan drug designation for 17-AAG from both the U.S. Food and Drug Administration and the European Medicines Agency for the treatment of multiple myeloma as well as another hematologic cancer, chronic myelogenous leukemia.

About Hsp90 Inhibitors

KOS-1022 and 17-AAG are analogs of the polyketide geldanamycin that inhibit Hsp90. KOS-953 is Kosan’s proprietary formulation of 17-AAG. Hsp90 is a molecular “chaperone” which maintains the stability of numerous “client proteins” implicated in tumor growth and metastasis, including protein kinases and transcription factors. By blocking the activity of Hsp90, geldanamycin analogs lead to disruption of the Hsp90-client protein complexes and client protein degradation. By targeting multiple growth-signaling pathways involved in cancer, these compounds may have potential use in a variety of tumor types, both as single agents and in combination with other signal transduction inhibitors and cytotoxic drugs.

About Kosan

Kosan Biosciences is advancing two new classes of anticancer agents through clinical development. Kosan is developing Hsp90 (heat shock protein 90) inhibitors in collaboration with the NCI. Kosan’s proprietary formulation of 17-AAG (KOS-953) is in Phase I and II clinical trials for multiple myeloma and Her2 breast cancer. In addition, intravenous and oral formulations of a second-generation Hsp90 inhibitor, KOS-1022 (DMAG), are currently in Phase I clinical trials. For additional information on Kosan Biosciences, please visit the Company's website at www.kosan.com.

This press release contains "forward-looking" statements, including statements with respect to the further development and potential safety and efficacy of Hsp90 inhibitors, including KOS-1022, in the treatment of cancer and Kosan’s development strategy for its Hsp90 inhibitors. Any statements contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. There are a number of important factors that could cause the results of Kosan to differ materially from those indicated by these forward-looking statements, including, among others, the risk that the U.S. Food and Drug Administration may require changes to the protocols and informed consents for clinical trials of its Hsp90 inhibitors, which changes may have a material adverse effect on the timing of, and Kosan’s ability to conduct, those clinical trials, risks related to the clinical advancement of its Hsp90 inhibitors, including the risk that clinical trials for this product candidate may not demonstrate safety and efficacy sufficient to obtain the requisite regulatory approvals or to result in a marketable product, risks related to the potential for others to develop products containing or based on 17-AAG, risks related to Kosan’s dependence on the NCI for the development of its Hsp90 inhibitors and other risks detailed from time to time in the Company’s SEC reports, including its Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 and other periodic filings with the SEC. Kosan does not undertake any obligation to update forward-looking statements.

Herceptin® (trastuzumab) is a registered trademark of Genentech, Inc., and Velcade® (bortezomib) is a registered trademark of Millennium Pharmaceuticals, Inc.

Source: http://www.kosan.com