Study of COLAL-PRED to Treat Moderate to Severe Ulcerative Colitis

This is a multi-center, randomized, double-blind, placebo-controlled, parallel-design,
dose-ranging study. Eligible patients with a DAI score of 6 to 10 (inclusive), plus
endoscopic evidence of moderate to severe ulcerative colitis as assessed by flexible
sigmoidoscopy, unless colonoscopy is clinically indicated, and rectal bleeding will be
randomized to placebo or one of four doses of COLAL-PRED (equivalent to 40, 60, 80, or 120 mg
of prednisolone). The effectiveness and safety of COLAL-PRED will be evaluated at baseline,
and after 2 weeks and 4 weeks of treatment. Additional follow-up measurements will take place
7 days post cessation of treatment.

The systemic absorption of COLAL-PRED will be determined by measuring blood levels of
prednisolone, prednisolone sodium metasulfobenzoate (PMSBS) and metasulfobenzoate at Week 4.

Hypothalamic-pituitary-adrenocortical (HPA) axis response will be monitored by measuring
morning serum cortisol levels at Baseline, Week 2, Week 4, and at follow-up visit and
cortisol levels following adrenocorticotrophic hormone (ACTH) stimulation testing at Baseline
and Week 4.

Inclusion Criteria:

- Females must be of non-childbearing potential evidenced by being surgically sterile,
postmenopausal for at least 12 months or be using acceptable contraception methods
such as contraceptive pill, or two forms of barrier contraception.

- Disease Activity Index (DAI) Score of 6-10 (inclusive) at the Baseline Visit.

- Previous colonoscopic and biopsy diagnosis of ulcerative colitis with negative
evaluation of the ileum within 3 years of the screening visit.

- Endoscopic evidence of moderate or severe mucosal disease as assessed by flexible
sigmoidoscopy, with a minimum confirmed diagnosis of moderate ulcerative colitis.

- The following concomitant prescription medications for ulcerative colitis are
permitted if the following conditions are met:

1. Oral 5-aminosalicylic acid (5-ASA )therapy if the following 2 criteria are met:

1. Must be on a stable dose 2 weeks prior to baseline

2. Must maintain the stable dose until treatment end.

2. Azathioprine or 6-mercaptopurine or methotrexate if the 4 following criteria are
met:

1. On therapy continually for at least 3 months prior to baseline.

2. And on a stable dose for at least 2 weeks prior to baseline.

3. And must maintain the stable dose until the end of study drug treatment.

Exclusion Criteria:

- History of colonic or rectal surgery, excluding hemorrhoidal surgery or an
appendectomy.

- Pregnant or breast-feeding females.

- Diagnosis of diabetes, heart failure, unstable angina, hepatic cirrhosis, kidney
failure, adrenocortical insufficiency, or any other unstable medical condition.

- Known hypersensitivity to corticosteroids

- Use of oral 5-aminosalicylic acid (5-ASA) or oral corticosteroids during the immediate
screening period.

- Use of immunosuppressive drugs or antibiotics at any time within four weeks prior to
screening.

- Diagnosis of Crohn's disease; indeterminate colitis; microscopic colitis; ischemic,
infectious (e.g., salmonella, shigella, etc.), or amebic colitis; or gonococcal
proctitis; Clostridium difficile colitis.

- History of tuberculosis or HIV

- Clinically significant abnormal laboratory test results, unless regarded by the
Investigator as related to ulcerative colitis

- History of alcohol or drug abuse

- Known malignancy or history of malignancy that would reduce life expectancy

- Recent immunization with live viral vaccines

- History of or active peptic ulcer disease or gastritis

- Generalized infections such as systemic fungal or hepatitis B or C

- History of steroid induced severe hypertension, steroid-induced psychosis, or any
other severe steroid-related adverse reaction