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Aradigm Submits Marketing Authorisation Application (MAA) to EMA for EU Marketing Approval of Linhaliq in Non-Cystic Fibrosis Bronchiectasis

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Aradigm Corporation (NASDAQ:ARDM) (the "Company") today
announced it has submitted its Marketing Authorisation Application (MAA)
to European Medicines Agency (EMA) for Linhaliq™ for the treatment of
non-cystic fibrosis bronchiectasis (NCFBE) patients with chronic lung
infection with Pseudomonas aeruginosa (P. aeruginosa).

In accordance with Article 8(3) and Annex I, Part II.7 of Directive
2001/83/EC, Aradigm is submitting a mixed MAA for Linhaliq that is based
on the positive Phase 3 pivotal clinical trial ARD-3150-1202 (ORBIT-4)
and supporting evidence from Phase 3 study ARD-3150-1201 (ORBIT-3) and
Phase 2b study ARD-3150-0902 (ORBIT-2), together with other supporting
evidence from proprietary preclinical and clinical studies, as well as
referencing additional information about ciprofloxacin from publicly
available sources.

The EMA has a 21-day validation review period to determine whether the
MAA is complete before starting the procedure.

Additional Information about Linhaliq Phase 3 Trials and Regulatory
Development

Linhaliq, formerly known as Pulmaquin®, is composed of a mixture of
liposome encapsulated and unencapsulated ciprofloxacin. Ciprofloxacin,
available in oral and intravenous formulations, is a widely prescribed
antibiotic. It is used often to treat acute lung infections because of
its broad-spectrum antibacterial activity against various bacteria, such
as P. aeruginosa. There are currently no treatments approved for
NCFBE patients to prevent and reduce the number of pulmonary
exacerbations (PEs).

Linhaliq was evaluated in two Phase 3 studies (ORBIT-3 and ORBIT-4) to
determine its safety and effectiveness as a once- a-day inhaled
formulation for the chronic treatment of patients with NCFBE who have
chronic lung infections with P. aeruginosa.

The Phase 3 clinical program for Linhaliq in NCFBE consisted of two
worldwide, double-blind, placebo-controlled pivotal trials (ORBIT-3 and
ORBIT-4) that were identical in design except for a pharmacokinetics
sub-study that was conducted in one of the trials. Each trial enrolled
NCFBE patients (278 in ORBIT-3 and 304 in ORBIT-4) into a 48-week
double-blind period consisting of 6 cycles of 28 days on treatment with
Linhaliq or placebo plus 28 days off treatment, followed by a 28 day
open label extension in which all participants received Linhaliq (total
treatment duration, including the double-blind period, of approximately
one year). The superiority of Linhaliq vs. placebo during the
double-blind period was evaluated in terms of the primary endpoint -
time to first PE, while key secondary endpoints included the reduction
in the number of PEs, the number of PEs requiring the administration of
antibiotics, the number of severe PEs, as well as improvements in
quality of life measures. Lung function was monitored as a safety
indicator.

Aradigm discussed the results of the Phase 3 studies at pre-submission
meetings with EMA in October and November 2017. Based on these
discussions, the statistical analysis of the results was changed from
the pre-specified plan to stratification based on sex and the frequency
of pulmonary exacerbations in the prior year, as the stratum for current
smokers contained a small number of subjects.

Top-line efficacy results for the two Phase 3 studies using the new
stratification and pooled safety analyses are described below:

In ORBIT-4 the median time to first PE was 230 days in the Linhaliq
treatment group as compared to 158 days in the placebo group. This
increase of 72 days in the median time to first PE was statistically
significant (p=0.0323) using stratified unweighted log-rank analysis.
For the first secondary efficacy endpoint, there was a 37% reduction in
the frequency of PEs over the 48-week treatment period in the Linhaliq
treatment group as compared to the placebo group. This result was
statistically significant (p=0.0006). In the secondary endpoints of
frequency of PEs requiring the administration of antibiotics a
statistically significant 42% reduction (p=0.0001), and of severe PEs a
statistically significant 60% reduction (p=0.0031) was observed in the
Linhaliq group compared with placebo.

In ORBIT-3 the median time to first PE was 214 days in the Linhaliq
treatment group as compared to 136 days in the placebo group. This
increase of 78 days in the median time to first PE was similar to
ORBIT-4 but was not statistically significant (p=0.9743). For the first
secondary efficacy endpoint, there was a 15% reduction in the frequency
of PEs over the 48-week treatment period in the Linhaliq treatment group
as compared to the placebo group but it was not statistically
significant (p=0.2565). In the secondary endpoints of frequency of PEs
requiring the administration of antibiotics a non-significant 22%
reduction (p=0.0998), and of severe PEs a non-significant 20% reduction
(p=0.4827) was observed in the Linhaliq group compared with placebo.

Neither trial demonstrated a statistically significant improvement for
Linhaliq compared to placebo in the secondary endpoint, quality of life,
when the difference in the Respiratory Domain score of the QoL-B
questionnaire was examined between baseline and Week 48.

Both studies demonstrated a statistically significant reduction in P.
aeruginosa density at Day 28, the end of the first on- treatment period
(ORBIT-3: p= < 0.0001; ORBIT-4: p= < 0.0001). For each study, the
magnitude of this antibiotic effect remained persistent throughout all
on-treatment periods. Similarly, the Phase 2b trial ORBIT-2 met its
primary efficacy endpoint of reduction of P. aeruginosa density at Day
28 (p=0.002).

Linhaliq was generally safe and well tolerated in both Phase 3 studies.
For each Phase 3 study, the randomization rate of Linhaliq-treated
subjects to placebo was 2 to 1. In the pooled safety analyses there were
no significant differences in the changes of lung function (FEV1 %
predicted and FVC % predicted) or symptoms of airway irritation between
the Linhaliq and placebo groups in the two studies. Overall, the
incidence of all treatment emergent adverse events ("TEAE") was similar
between the Linhaliq and placebo groups (Linhaliq: 88.2%; placebo:
94.3%). The most frequently observed treatment- related TEAEs were
respiratory/thoracic/mediastinal of nature and were reported by 20.8% of
subjects with Linhaliq and in 20.7% of subjects with placebo. The rates
of serious TEAEs were 23.4% with Linhaliq and 26.9% with placebo. During
the double blind and open label course of both studies there were 7
deaths in the Linhaliq and 7 deaths in the placebo group. None of the
deaths was considered related to Linhaliq or placebo by the
investigators. There were no deaths in ORBIT-2.

Further information about the analyses of the Phase 3 results is
presented at Aradigm's website www.aradigm.com.

About Non-Cystic Fibrosis Bronchiectasis

NCFBE is a severe, chronic and rare disease characterized by abnormal
dilatation of the bronchi and bronchioles, frequently associated with
chronic lung infections. It is often a consequence of a vicious cycle of
inflammation, recurrent lung infections, and bronchial wall damage.
NCFBE represents an unmet medical need with high morbidity and mortality
that affects more than 150,000 people in the U.S. and over 200,000
people in Europe. There is currently no drug approved for the treatment
of this condition. NCFBE patients who have chronic infections with P.
aeruginosa
have a 6.5-fold increase in hospitalization, three times
higher mortality, and a worse quality of life compared with those
without P. aeruginosa infections.

About Aradigm

Aradigm is an emerging specialty pharmaceutical company focused on the
development and commercialization of drugs for the prevention and
treatment of severe respiratory diseases. Aradigm has completed Phase 3
development of Linhaliq (an investigational proprietary formulation of
ciprofloxacin for inhalation) for the treatment of NCFBE. Aradigm's
inhaled ciprofloxacin formulations including Linhaliq are also product
candidates for treatment of patients with cystic fibrosis and
non-tuberculous mycobacteria, and for the prevention and treatment of
high threat and bioterrorism infections, such as inhaled tularemia,
pneumonic plague, melioidosis, Q fever and inhaled anthrax.

More information about Aradigm 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 the risk that the regulatory authorities may
not agree with our interpretation of the data from our clinical trials
of Linhaliq and may require us to conduct additional clinical trials;
Linhaliq may not receive regulatory approval or be successfully
commercialized, including as a result of the FDA's or other regulatory
authorities' decisions regarding labeling and other matters that could
affect its availability or commercial potential;, as well as the other
risks detailed from time to time in the Company's filings with the
Securities and Exchange Commission (SEC), including the Company's Annual
Report on Form 10-K for the year ended December 31, 2016 filed with the
SEC on March 30, 2017, and the Company's Quarterly Reports on Form 10-Q.

Aradigm, Pulmaquin and the Aradigm Logo are registered trademarks of
Aradigm Corporation. Linhaliq is a registered trademark of Grifols, S.A.

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