Aradigm Shareholders Approve Collaboration Transaction With Grifols, S.A. to Develop and Commercialize Pulmaquin

  Aradigm Shareholders Approve Collaboration Transaction With Grifols, S.A. to
  Develop and Commercialize Pulmaquin

  Aradigm’s Proprietary Inhaled Ciprofloxacin Formulation is a Potential New
             Therapy for Patients with Severe Respiratory Disease

Business Wire

HAYWARD, Calif. -- July 16, 2013

Aradigm Corporation (OTC BB:ARDM.OB) (“Aradigm” or the “Company”)  today
announced that the Company’s shareholders approved all proposals at the
Special Meeting of Shareholders held on July 15, 2013, including those related
to the license agreement with Grifols, S.A. (MCE:GRF, MCE:GRF.P and
NASDAQ:GRFS)  (“Grifols”) for Aradigm’s proprietary formulations of inhaled
ciprofloxacin (Pulmaquin® and Lipoquin®) for the treatment of severe
respiratory diseases, including non-cystic fibrosis bronchiectasis (BE).

BE is a chronic condition that affects about 110,000 people in the United
States and many more in other countries and is characterized by abnormal
dilatation of the bronchi and bronchioles associated with chronic respiratory
infections. Aradigm has been granted orphan drug designation for BE in the
U.S. and there is currently no drug specifically approved for the treatment of
this condition.

Aradigm shareholders also approved the amendment to the Company’s Amended and
Restated Articles of Incorporation to increase the number of authorized shares
of Common Stock to allow the equity issuances contemplated by the
collaboration transaction. In conjunction with the licensing agreement,
Grifols will acquire 35% of Aradigm’s common stock on a fully diluted basis at
a price per share of $0.124 for a total investment of approximately $26
million. Existing Aradigm shareholders, including Tavistock Life Sciences
Company and accounts managed by First Eagle Investment Management, LLC, and
new investors Great Point Partners, LLC will co-invest in the stock purchase
transaction and purchase an additional approximately $15.4 million in Aradigm
common stock.

The transaction remains subject to certain closing conditions and is expected
to close in the third quarter of 2013. At that point, Grifols will be entitled
to designate two directors to serve on the Aradigm Board of Directors.

“Aradigm’s shareholders have demonstrated their approval of this transaction.
We are grateful for their continued support and we look forward to closing
this transaction and advancing Pulmaquin in the clinic as soon as possible,”
said Igor Gonda, President and CEO, Aradigm Corporation.

About inhaled ciprofloxacin (Pulmaquin and Lipoquin)

Ciprofloxacin is a widely prescribed antibiotic to treat infections of the
lung frequently experienced by cystic fibrosis (CF) and non-cystic fibrosis
bronchiectasis (BE) patients. It is often preferred because of its
broad-spectrum anti-bacterial action. The available oral and intravenous
formulations of the drug are used to treat episodes of acute exacerbations of
lung infections in CF patients. Aradigm’s once-a-day novel inhaled
formulations of ciprofloxacin are encapsulated in liposomes, allowing for a
sustained release of the drug within the lung and improving airway
tolerability. The formulations are to be used for chronic maintenance therapy
as they achieve much higher antibiotic concentration at the site of infection
and relatively low systemic antibiotic concentrations to minimize
side-effects. Lipoquin is a liposomal formulation of ciprofloxacin. Pulmaquin
is a dual release formulation that is a mixture of Lipoquin with
unencapsulated ciprofloxacin.

Pulmaquin has been tested extensively in preclinical tests, as well as in the
ORBIT-2 Phase 2b bronchiectasis study in which outstanding antimicrobial
activity coupled with good safety and tolerability was found, and, most
importantly, the positive impact on prevention of exacerbations compared to
placebo was also observed. Pulmaquin is ready to begin Phase 3 clinical
trials. Aradigm has been granted orphan drug designation for liposomal
ciprofloxacin for cystic fibrosis in the U.S. and the E.U., and for the
combination of liposomal ciprofloxacin and free ciprofloxacin for BE in the
U.S. Aradigm’s inhaled ciprofloxacin has been also successfully tested in
animal models of the bioterrorism infections inhalational tularemia, pneumonic
plague and Q-fever.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the
development and commercialization of drugs delivered by inhalation for the
prevention and treatment of severe respiratory diseases. Aradigm has product
candidates addressing the treatment of bronchiectasis, cystic fibrosis,
inhalation tularemia and anthrax infections, and prevention of respiratory and
other diseases in tobacco smokers through smoking cessation.

More information about Aradigm can be found at www.aradigm.com.

About Grifols

Grifols is a global healthcare company with a 70-year legacy of improving
people’s health and well being through the development of life-saving plasma
medicines, hospital pharmacy products and diagnostic technology for clinical
use.

As a leading producer of plasma medicines, Grifols has a presence in more than
100 countries and is the world leader in plasma collection, with 150 plasma
donation centers across the U.S. Grifols is committed to increasing patient
access to its life-saving plasma medicines through significant manufacturing
expansions and the development of new therapeutic applications of plasma
proteins. The company is headquartered in Barcelona, Spain and employs more
than 12,000 people worldwide.

Grifols is the Global leader in the treatment of Alpha-1 antitrypsin
deficiency – a disease that often leads to emphysema. Grifols has a dedicated
Pulmonary sales force in the United States, Germany, Canada and Spain with
full coverage of COPD prescribers.

In 2012, Grifols’ sales exceeded 2,620 million euros. The company’s class A
shares are listed on the Spanish Stock Exchange, where they are part of the
Ibex-35 (MCE:GRF). Its non-voting class B shares are listed on the Mercado
Continuo (MCE:GRF.P) and on the U.S. NASDAQ via ADRs (NASDAQ: GRFS). For more
information visit www.grifols.com

Disclaimer and Forward-Looking Statements

The facts and figures contained in this news release which do not refer to
historical data are “projections and forward-looking statements’”. The words
and expressions like “believe”, “hope” “anticipate”, “predict”, “expect”,
“intend”, “should”, “try to achieve”, “estimate”, “future” and similar
expressions, insofar as they are related to Aradigm, Grifols, the prospects
for Aradigm’s inhaled ciprofloxacin product formulations to successfully
complete clinical trials and to result in approved products, and the ability
of Grifols to successfully commercialize these products, are used to identify
projections and forward-looking statements. These expressions with respect to
Aradigm reflect the assumptions, hypothesis, expectations and anticipations of
the management team of Aradigm at the date of preparation of this news
release, which are subject to a number of factors that could make the real
results differ considerably, such as the uncertainties associated with
clinical trials including lack of effectiveness, lack of statistical
significance of results, adverse side effects or other safety issues,
uncertainties regarding the process of obtaining regulatory approval for the
sale of new drugs, uncertainties concerning the development of demand for new
products, uncertainties regarding the level of reimbursement for new products,
manufacturing and supply issues and the like. The future results of Grifols
Group could be affected by events related to its own activity, such as
shortages of raw materials for the manufacture of its products, the launch of
competitive products or changes in the regulations of markets in which it
operates, among others. At the date of the preparation of this news release
Grifols Group has adopted measures it considers necessary to offset the
possible effects of these events. Grifols, S.A. does not assume any obligation
to publicly inform, review or update any projections and forward-looking
statements to adapt them to facts or circumstances following the preparation
of this news release, except as specifically required by law.

Except for the historical information contained herein, this news release
contains forward-looking statements that involve risk and uncertainties,
including the closing of the transaction, as well as the other risks detailed
from time to time in Aradigm's filings with the Securities and Exchange
Commission (SEC), including its Annual Report on Form 10-K for the year ended
December 31, 2012 filed with the SEC on March 27, 2013, and Aradigm’s
Quarterly Reports on Form 10-Q.

Aradigm, Pulmaquin, Lipoquin and the Aradigm Logo are registered trademarks of
Aradigm Corporation.

Contact:

Aradigm
Nancy Pecota, 510-265-8800
Chief Financial Officer
 
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