The analysis of the Trial results showed that the primary objective (Primary End-Point) of the Trial was successfully achieved. The use of the Accordion Zaleplon product resulted in substantial improvement with statistical significance in the prolongation of the Total Sleep Time (TST) of patients suffering from chronic Insomnia. Additional important secondary End-points were also achieved successful with statistical significance:

• Improvement of time to sleep onset (LPS) (Latency to Persistent Sleep)
• Prevention of side effects in the "next morning".
• Improvement of the level of patient alertness in the "next morning".
• Improvement of sleep quality.

Company's management believes that the clinical effect achieved with regard to the prolongation of the Total Sleep Time, along with the high safety profile shown in the Trial, points to the potential of the Accordion Zaleplon product to become a leading medication in the field of Insomnia treatment.

Eighty three Insomnia chronic patients, who suffer from difficulties in falling asleep and in maintaining a persistent sleep, participated in the Trial. The Trial was conducted in five leading sleep clinics in the U.S. (81 patients) and in the sleep clinic in Ramabam Medical Center in Israel (2 patients) (the "Subjects"). The Trial was conducted as a Double Blind study. The efficacy of the Accordion Zaleplon product versus a placebo was tested in a crossover design with the relevant Insomnia objective and subjective criteria.

These criteria included, inter alia, the use of Polysomnography (comprehensive sleep testing performed at night and includes, among other things, registration of brain waves, eye movements, etc.), memory and cognitive tests in the next morning, filling of questionnaires by patients, etc.

The analysis of the patients' brain waves records showed that the Total Sleep Time was substantially prolonged with statistical significance. It was also found that the latency to persistent sleep (LPS) was substantially shortened with statistical significance.

The analysis of the results of the objective tests for the evaluation of the patients' level of alertness in the next morning showed that no residual effects (Residual Sedation) were found with the patients who were treated with the Accordion Zaleplon product, in comparison to the placebo.

The results of the subjective tests (questionnaires handed out to the patient with regard to several parameters of sleep and with regard to the level of alertness in the morning) also indicated (with statistical significance) on substantial prolongation of the sleep duration and on improvement in its quality, on substantial shortening of the latency to persistent sleep and on improvement in the level of alertness in the next morning.

It is important to point out that currently, the Zaleplon medication is not approved for the indication of Sleep Maintenance. 

It is also important to point out that to the Company's best knowledge, there is an increasing concern among the regulatory authorities in the U.S. as to the residual effects, in the next morning, of currently approved sleep medications. In a recently held discussion, the FDA addressed the risk of sedatives and their link to next-day effects, such as dangerous sleep driving.

Sleep Disorders

Pursuant to public sources (Datamonitor, Forecast Insight, Insomnia, Aug 2008) the market for medications for sleep disorders was estimated at approximately 4.1 billion U.S. dollars in the year 2007 in the seven major markets (USA, Japan, UK, France, Germany, Switzerland and Italy). It is estimated that the market potential will grow to approximately 6.8 billion U.S. dollars in the seven major markets by the year 2017.

Accordion Pill Zaleplon for the Treatment of Sleep Disorders

The Accordion pill Zaleplon is a product developed by the Company, designed to improve the Zaleplon drug currently marketed for sleep disorders, by administering it inside the Accordion pill and thereby retaining the drug (Zaleplon) in the stomach for the majority of the night and releasing it continuously in order to maintain continuous sleep and prevent the "hangover" phenomenon in the following day.

The development of the Accordion Zaleplon Pill is part of the activity of the Company which engages in the  enhancement of existing drugs based on a patented technology, which prolongs the absorption duration of these drugs through their retention in the stomach for longer periods of time. The improvement of the drugs can be expressed by enhancing effectiveness, significantly reducing the side effects caused by the use of the drugs, significantly decreasing the number of administrations throughout the day, etc.

The Company's estimates regarding the future development and expected trials with respect to the Company's products are forward looking information based on the information that the Company has in its possession today pertaining to the potential of drugs development, and the indications the Company received from the relevant health care authorities. These estimates may not be realized, in whole or in part, and/or may be realized differently than estimated, as a result of different factors, including the failure to reach the objectives of the trials and/or schedules and/or to obtain the necessary funding for the continuation of development of the drugs as well as failure to obtain regulatory approvals required for further development, failure to reach agreements with international companies, other factors which are not within the Company's control and the materialization of any of the risk factors detailed in Section 5.31 of the Company`s shelf prospectus published on May 5, 2011. 

Sincerely,

Intec Pharma Ltd.