Novartis cancels Emisphere Technologies' Convertible Promissory Note

Emisphere Technologies, Inc. (OTCBB:EMIS) (the "Company") today announced that it has entered into an expanded relationship with Novartis Pharma AG ("Novartis") pursuant to which Novartis has cancelled the Company's Convertible Promissory Note (the "Note"). The Note was originally issued to Novartis on December 1, 2004 in connection with the Research Collaboration and Option License Agreement between the parties of that date and was originally due December 1, 2009. Previously, Novartis had agreed to extend the maturity date to June 4, 2010.

In connection with the cancellation of the Note, the parties have agreed to modify the royalty and milestone payment schedule for the Research Collaboration and Option Agreement and License Agreement between the parties for the development of an oral salmon calcitonin product for the treatment of osteoarthritis and osteoporosis. Additionally, the Company has granted Novartis the right to evaluate the feasibility of using Emisphere's Eligen^® Technology with two new compounds to assess the potential for new product development opportunities. If Novartis chooses to develop oral formulations of these new compounds using the Eligen^® Technology, the parties will negotiate additional agreements. In that case, Emisphere could be entitled to receive development milestone and royalty payments in connection with the development and commercialization of these potentially new products.