Under European guidelines, Orphan Medicinal Product Designation provides 10 years of potential market exclusivity if the product candidate is the first product candidate for the indication approved for marketing in the European Union. Orphan drug designation also allows the candidate's sponsor to seek assistance from the EMEA in optimizing the candidate's clinical development through participation in designing the clinical protocol and preparing the marketing application. Additionally, a drug candidate designated by the Commission as an Orphan Medicinal Product may qualify for a reduction in regulatory fees as well as a European Union-funded research grant.

“We are very pleased that the EMEA granted our liposomal ciprofloxacin Orphan Drug Designation for the treatment of cystic fibrosis,” said Dr. Igor Gonda, the Company’s CEO and President. “This designation is an important step in our development of a new chronic treatment for management of respiratory infections commonly experienced by CF patients. Our once-a-day dosing has the potential to significantly decrease the burden of therapy for these patients.”

Ciprofloxacin is a widely prescribed antibiotic in the form of oral and intravenous formulations to treat acute exacerbations of infections of the lung frequently experienced by cystic fibrosis patients. It is often preferred because of its broad-spectrum anti-bacterial action. The Company’s once-a-day novel inhaled formulation of ciprofloxacin delivered in liposomes is to be used for chronic maintenance therapy as it is expected to achieve high antibiotic concentration for efficacy at the site of infection and relatively low systemic antibiotic concentrations to minimize side-effects.

The Company was granted previously orphan drug designations by the U.S. Food and Drug Administration for inhaled liposomal ciprofloxacin for the management of CF and for non-cystic fibrosis bronchiectasis. The Company is also developing inhaled liposomal ciprofloxacin as a potential treatment for prevention and treatment of bioterrorism infections such as inhaled anthrax.

About cystic fibrosis

Cystic fibrosis is a genetic disease that causes thick, sticky mucus to form in the lungs, pancreas and other organs. In the lungs, the mucus tends to block the airways, causing lung damage and making these patients highly susceptible to lung infections. According to the Cystic Fibrosis Foundation, CF affects roughly 30,000 children and adults in the United States and roughly 70,000 children and adults worldwide. According to the American Lung Association, the direct medical care costs for an individual with CF are currently estimated to be in excess of $40,000 per year.

About Aradigm

The Company is an emerging specialty pharmaceutical company focused on the development and commercialization of a portfolio of drugs delivered by inhalation for the treatment of severe respiratory diseases by pulmonologists. Current activities include self-initiated development programs addressing the treatment of cystic fibrosis, bronchiectasis, inhalation anthrax infections and smoking cessation.

More information about the Company can be found at www.aradigm.com.

Forward-Looking Statements

Except for the historical information contained herein, this news release contains forward-looking statements that involve risk and uncertainties, including dosing regimens and the advancement of product development, as well as the other risks detailed from time to time in Aradigm Corporation's Securities and Exchange Commission (SEC) Filings, including the Company's Annual Report on Form 10-K, and quarterly reports on Form 10-Q.

Aradigm and the Aradigm Logo are registered trademarks of Aradigm Corporation.

Contact:

Aradigm Investor Relations, 510-265-8850/9370