XenoPort Mails Letter to Stockholders Highlighting ISS’s Recommendation That XenoPort Stockholders Vote “FOR ALL” of

  XenoPort Mails Letter to Stockholders Highlighting ISS’s Recommendation That
  XenoPort Stockholders Vote “FOR ALL” of XenoPort’s Director Nominees on the
  WHITE Card

Business Wire

SANTA CLARA, Calif. -- June 3, 2014

XenoPort, Inc. (Nasdaq: XNPT) today announced that it is mailing a letter to
stockholders in connection with the Company's upcoming Annual Meeting, which
will be held onJune 11, 2014. The letter reviews the May 29, 2014 report
issued by Institutional Shareholder Services (ISS), the leading independent
proxy advisory firm, recommending that XenoPort stockholders vote on the WHITE
proxy card “FOR ALL”  of XenoPort’s director nominees. On June 2, 2014, a
second independent proxy advisory firm, Egan-Jones Proxy Services, also
recommended that XenoPort stockholders vote “FOR ALL” of XenoPort’s director
nominees on the WHITE proxy card.

Highlights of the letter include:

  *ISS has recommended that XenoPort stockholders vote on the WHITE proxy
    card “FOR ALL”  of XenoPort’s director nominees: Ronald W. Barrett,
    Ph.D.,Jeryl L. HillemanandWendell Wierenga, Ph.D.;
  *In supporting XenoPort's entire slate of director nominees, ISS
    recommended that stockholders "do not vote" on the gold proxy card or for
    any of the three nominees proposed by Clinton Relational Opportunity
    Master Fund, L.P. and its affiliates (Clinton);
  *In its May 29, 2014 report, ISS recognized the commercialization strategy
    that XenoPort’s Board of Directors and leadership are executing for
    HORIZANT^®(gabapentin enacarbil) Extended-Release Tablets;
  *ISS also recognized the stepsXenoPortis taking to develop XP23829, a
    potential treatment for psoriasis and/or relapsing forms of multiple
    sclerosis (MS);
  *In addition, ISS recommended XenoPort stockholders vote "FOR" the approval
    of the XenoPort, Inc. 2014 Equity Incentive Plan, vote "FOR" the approval,
    on an advisory basis, of the compensation of XenoPort's named executive
    officers, and vote "FOR" the ratification of the selection by the audit
    committee of the Board of Directors of Ernst & Young LLP as XenoPort's
    independent registered public accounting firm for the fiscal year ending
    December 31, 2014;
  *XenoPort believes Clinton’s agenda would put XenoPort stockholders’
    investment at risk; and
  *The only way to vote for the XenoPort director nominees is to vote the
    WHITE card.

The full text of the letter follows:

 ISS, THE LEADING PROXY ADVISORY FIRM, RECOMMENDS XENOPORT STOCKHOLDERS VOTE
                   FOR ALL OF XENOPORT’S DIRECTOR NOMINEES

June 2, 2014

Dear Fellow XenoPort Stockholder:

We are writing to inform you about an important development regarding
XenoPort’s upcoming Annual Meeting on June 11, 2014.

The leading independent proxy advisory firm, Institutional Shareholder
Services (ISS), has recommended that XenoPort stockholders vote on the WHITE
proxy card “FOR ALL” of XenoPort’s director nominees: Ronald W. Barrett,
Ph.D.,Jeryl L. HillemanandWendell Wierenga, Ph.D. ISS recommends that
stockholders "do not vote" on the gold proxy card or for any of the three
nominees proposed by Clinton Relational Opportunity Master Fund, L.P. and its
affiliates (Clinton).

ISS issues proxy research and vote recommendations on approximately 39,000
companies in 115 countries each year.* ISS’s clients, who include
institutional investors, pension funds and money managers, rely on ISS’s
expertise, analysis and recommendations in making their voting decisions. The
XenoPort Board of Directors appreciates that ISS is recommending that
stockholders vote “FOR ALL” of XenoPort's director nominees.

In supporting XenoPort's entire slate of director nominees and recommending
that stockholders "do not vote" for any of the three nominees proposed by
Clinton, ISS stated in its May 29, 2014 report that “The dissident has not
made a compelling case for the need for change at the board level.”**

                        HIGHLIGHTS FROM THE ISS REPORT

ISS recognized the commercialization strategy that your Board of Directors and
leadership are executing for HORIZANT^®(gabapentin enacarbil)
Extended-Release Tablets. ISS stated:

  *"the company's strategy to measure the uptake on a marketing program which
    truly promoted the product appears justified. Moreover, the company's
    decision to leverage$40 millionand 50 metric tons of active ingredient
    acquired as part of settlement, implement state-of-the-art promotional
    tools, personally promote and focus marketing efforts in 40 territories,
    appears to be gaining traction. Using just 40 sales reps - compared to
    GSK's 300 reps - that called on 10% of the potential market the company
    has achieved the following results: a 24% increase in national prescribed
    tablets, a 64% increase in XP territories prescribed tablets, and a 630%
    increase in tablets prescribed per sales rep."
  *"the board's reasons for terminating the licensing agreement with GSK,
    reacquiring the rights to Horizant, and re-launching the drug in a
    measured manner, to verify its potential appear justified by the early
    results of that re-launch. Given the company is less than a year into the
    re-launch, it appears too early to conclude a value maximizing decision
    would not include the steps being currently undertaken at the company."
  *"management's contention that ‘now may be the worst time to abandon
    Horizant commercialization' - given that the heavy lifting of the initial
    investment in the commercial operation has been completed, the investments
    in marketing initiatives and programs are largely committed, and the
    positive trajectory of actual sales will likely enhance the value of a
    potential partnership or future divestiture of Horizant - appears to have
    merit. So too do the facts that Horizant could generate meaningful revenue
    to fund further XP23829 development, and that diverting funding from
    Horizant to XP23829 will not accelerate XP829's development."

ISS also recognized the stepsXenoPortis taking to develop XP23829, a
potential treatment for psoriasis and/or relapsing forms of multiple sclerosis
(MS):

  *"we find no evidence to support the dissident claim that XP829's
    development is being neglected, capital starved, or that company's efforts
    to maximize the value of Horizant have come at the expense of the
    development of XP829. To the contrary, the strategy management has chosen
    to move forward in psoriasis appears the quickest pathway towards value
    creation for this asset and is echoed in analyst comments."

ISS also recommends XenoPort stockholders vote “FOR” the approval of XenoPort,
Inc. 2014 Equity Incentive Plan, vote “FOR” the approval, on an advisory
basis, the compensation of XenoPort’s named executive officers, and vote “FOR”
the ratification of the selection by the audit committee of the Board of
Directors of Ernst & Young LLP as XenoPort’s independent registered public
accounting firm for the fiscal year ending December 31, 2014.

  WE BELIEVE CLINTON’S AGENDA WOULD PUT YOUR INVESTMENT IN XENOPORT AT RISK

ISS’s recommendation further reinforces our belief that XenoPort has the right
Board, the right leadership, and the right strategy to realize the full
potential of XenoPort's assets and enhance stockholder value. In contrast,
Clinton is pushing an agenda that we believe is short-term and puts at risk
the opportunity for long-term value creation. Keep in mind: Clinton reportedly
holds only 1.6% of XenoPort's common stock and began buying and selling
XenoPort's shares just last year.

As ISS observed, XenoPort’s targeted commercialization strategy is building
value in HORIZANT. Results of XenoPort's promotional efforts in just the first
three full quarters since we re-acquired HORIZANT's rights demonstrate that
our confidence in HORIZANT’s potential is justified. Initial investments in
HORIZANT's commercial infrastructure are complete, and marketing budgets are
largely committed. Now is the worst time to abandon commercialization as
Clinton has suggested, particularly given the upward sales trends we are
achieving.

As ISS recognized, XenoPort is taking appropriate steps to develop XP23829.
Contrary to Clinton’s assertions, drug development is a step-wise and
regulated process that requires much more than an ability to write a check. We
have been fully investing in XP23829 and executing a thoughtful development
plan that is appropriate for its stage of development.

All three of XenoPort’s director nominees, collectively and individually,
bring expertise and skills critical to XenoPort’s success.

          PROTECT YOUR INVESTMENT - VOTE THEWHITEPROXY CARD TODAY

Your Board is committed to realizing the full potential of XenoPort's assets
and acting in the best interests of allXenoPortstockholders. We are making
meaningful progress commercializing HORIZANT and are committed to optimizing
the value of XP23829.

To follow the ISS recommendation on the election and XenoPort’s proposals, and
protect your investment, vote the enclosedWHITEproxy card today "FOR ALL" of
XenoPort's nominees:Ronald W. Barrett, Ph.D.,Jeryl L. HillemanandWendell
Wierenga, Ph.D. and “FOR” the approval of XenoPort, Inc. 2014 Equity Incentive
Plan, vote “FOR” the approval, on an advisory basis, the compensation of
XenoPort’s named executive officers, and vote “FOR” the ratification of the
selection by the audit committee of the Board of Directors of Ernst & Young
LLP as XenoPort’s independent registered public accounting firm for the fiscal
year ending December 31, 2014. Your Board also urges you to vote "FOR"
Proposals 9 through 14 and "AGAINST" Clinton Proposals 5 through 8.

 THE ONLY WAY TO VOTE FOR THE XENOPORT DIRECTOR NOMINEES IS TO VOTE THE WHITE
                                     CARD

On behalf of your Board of Directors and management team, we thank you for
your continued support.

Sincerely,

/s/ Ronald W. Barrett     /s/ John G. Freund
Ronald W. Barrett, Ph.D.   John G. Freund, M.D.
Chief Executive Officer    Lead Independent Director

* Source: ISS website
** Permission to use quotes was neither sought nor obtained

Forward-Looking Statements

This communication contains “forward-looking” statements, including, without
limitation, all statements related to the potential value of XenoPort’s assets
and XenoPort’s ability to achieve its goal of enhancing stockholder value
through the execution of its strategic plan, including all statements related
to the commercial, revenue and value opportunity for HORIZANT and the
suitability of XP23829 as a potential treatment for psoriasis or relapsing
forms of MS; XenoPort’s ability to build value in HORIZANT through, and the
potential of, its targeted commercialization strategy; XenoPort’s current
strategy for advancing the XP23829 clinical development program; potential
partnering efforts for HORIZANT; and other statements that are not historical
facts. Any statements contained in this press release that are not statements
of historical fact may be deemed to be forward-looking statements. Words such
as “believe,” “could,” “may,” “potential,” “will,” “would” and similar
expressions are intended to identify forward-looking statements. These
forward-looking statements are based upon XenoPort’s current expectations.
Forward-looking statements involve risks and uncertainties. XenoPort’s actual
results and the timing of events could differ materially from those
anticipated in such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation: risks related to XenoPort’s
lack of commercialization experience and its ability to successfully market
and sell HORIZANT, including XenoPort’s ability to maintain sales, marketing,
distribution, supply chain and other sufficient capabilities to sell HORIZANT;
XenoPort’s dependence on the success of its strategies for HORIZANT
commercialization, promotion and distribution, as well as its ability to
successfully execute on these activities and to comply with applicable laws,
regulations and regulatory requirements; the competitive environment for and
the degree of market acceptance of HORIZANT; obtaining appropriate pricing and
reimbursement for HORIZANT in an increasingly challenging environment; the
difficulty and uncertainty of pharmaceutical product development and the
uncertain results and timing of clinical trials and other studies, including
the risk that success in preclinical testing and early clinical trials does
not ensure that later clinical trials will be successful; XenoPort’s ability
to successfully advance XP23829 development and to conduct or initiate
clinical trials in the anticipated timeframes, or at all; the uncertainty of
the FDA’s review process and other regulatory requirements, including the risk
that FDA action, including with respect to the investigational new drug
application for XP23829, would delay or prevent the initiation of future
clinical trials of XP23829; XenoPort’s need for and the availability of
resources to develop XP23829 and to support XenoPort’s operations; XenoPort’s
dependence on collaborative partners; the uncertain therapeutic and commercial
value of HORIZANT and XP23829; as well as risks related to future
opportunities and plans, including the uncertainty of future operating
results. These and other risk factors are discussed under the heading “Risk
Factors” in XenoPort’s Quarterly Report on Form 10-Q for the quarter ended
March 31, 2014, filed with the Securities and Exchange Commission on May 9,
2014. XenoPort expressly disclaims any obligation or undertaking to release
publicly any updates or revisions to any forward-looking statements contained
herein to reflect any change in the Company’s expectations with regard thereto
or any change in events, conditions or circumstances on which any such
statements are based.

     If you have any questions, require assistance with voting your WHITE
 proxy card or need additional copies of the proxy materials, please contact:

                           MACKENZIE PARTNERS, INC.

                              105 Madison Avenue
                              New York, NY 10016

                         proxy@mackenziepartners.com

                        (212) 929-5500 (Call Collect)
                                      Or
                           TOLL-FREE (800) 322-2885

Important Additional Information and Where to Find It

XenoPort, Inc., its directors and certain of its executive officers may be
deemed to be participants in the solicitation of proxies from stockholders in
connection with XenoPort’s 2014 Annual Meeting of Stockholders. XenoPort has
filed with the SEC and provided to its stockholders a definitive proxy
statement and a WHITE proxy card in connection with such solicitation.
XENOPORT STOCKHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PROXY STATEMENT
(INCLUDING ANY AMENDMENTS AND SUPPLEMENTS) AND THE ACCOMPANYING WHITE PROXY
CARD, AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE
THEY CONTAIN IMPORTANT INFORMATION.

Information regarding the names of XenoPort’s directors and executive officers
and their respective interests in XenoPort by security holdings or otherwise
is set forth in XenoPort’s definitive proxy statement for the 2014 Annual
Meeting of Stockholders, filed with the SEC on April 22, 2014, including
Appendix B thereto.

The definitive proxy statement (and amendments or supplements thereto) and the
accompanying WHITE proxy card, and any other relevant documents and other
material filed by XenoPort with the SEC, are or will be available for no
charge at the SEC’s website at www.sec.gov and at XenoPort’s investor
relations website at http://investor.xenoport.com/index.cfm. Copies may also
be obtained free of charge by contacting XenoPort Investor Relations by mail
at 3410 Central Expressway, Santa Clara, California 95051 or by telephone at
(408) 616-7200.

About XenoPort

XenoPort, Inc. is a biopharmaceutical company focused on developing and
commercializing a portfolio of internally discovered product candidates for
the potential treatment of neurological disorders. XenoPort is currently
commercializing HORIZANT in the United States and developing its novel fumaric
acid ester product candidate, XP23829, as a potential treatment for patients
with moderate-to-severe chronic plaque type psoriasis and/or relapsing forms
of multiple sclerosis. REGNITE^® (gabapentin enacarbil) Extended-Release
Tablets is being marketed in Japan by Astellas Pharma Inc. XenoPort's pipeline
of product candidates also includes a potential treatment for patients with
Parkinson's disease.

To learn more about XenoPort, please visit the website at www.XenoPort.com.

XNPT2G

Contact:

XenoPort, Inc.
Jackie Cossmon, 408-616-7220
ir@XenoPort.com
 
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