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<PAGE>
[CORTECH LOGO]
DON'T THROW AWAY THE VALUE OF YOUR COMPANY'S TECHNOLOGY PORTFOLIO!
VOTE THE WHITE PROXY CARD.
Dear Fellow Stockholder:
Cortech stockholders have a very clear and important choice to make at the
upcoming stockholder meeting on September 4, 1998. A slate of nominees led by
Paul Koether and his self styled "Asset Value Fund" is soliciting your vote in
an attempted hostile takeover of Cortech. Koether's slate includes Koether and
several of his business partners. But Koether and his partners have no
biotechnology or pharmaceutical industry experience, and they do not appear to
have any understanding of Cortech's science and technology or to have made any
attempt to gain such insight. Furthermore, they have offered no explanation as
to what they might do if they were in control of the Company.
Consider the following:
BIOTECH AND PHARMACEUTICAL INDUSTRY EXPERIENCE:
YOUR CURRENT BOARD AND NOMINEES: KOETHER AND HIS ASSOCIATES:
________________________________ ___________________________
Dr. Lawrence Gold:
Chairman and Chief Scientific Officer
of NeXstar, a biopharmaceutical company NONE.
engaged in the development, manufacture
and sale of pharmaceutical products.
Mr. Joachim von Roy: NONE.
Past President of Bristol Myers Squibb, Europe.
Dr. John Repine:
President and Director of the Webb-Waring
Antioxidant Research Institute and The James NONE.
J. Waring Professor of Medicine and Pediatrics
at the University of Colorado Health Sciences Center.
FUTURE PLANS FOR CORTECH:
_________________________
Near term strategy: NONE,
To seek and secure collaborative
partners to advance and fund future
development while conserving current (other than to "explore
cash resources. the possibilities")
VOTE FOR EXPERIENCE. VOTE FOR EXPERTISE.
VOTE THE WHITE PROXY.
The current Cortech Board and this year's nominees are in a position to
capitalize on the Company's future potential. We can do this because we
understand the technology and business environment in which it operates. Can
Koether and his hand-picked nominees make the same claim? Does Koether's promise
to "explore the possibilities" without the benefit of scientific, biotechnology
or pharmaceutical expertise or experience sound like a viable strategy? We think
not and urge you to vote your enclosed WHITE proxy card to elect the board
committed to extracting value from the years of effort and tens of millions of
dollars already invested in Cortech's technology.
The Cortech board believes that the value of the Company's technology portfolio
can best be realized by establishing new partnerships for the individual
components of that portfolio. We are encouraged by the recent results of our
partnering discussions and are working on several promising options. We also
believe that the Company, as presently configured, can continue its efforts in
this regard without unduly depleting its current cash resources. Our near term
strategy is to seek and secure collaborative partners for the portfolio while
remaining opportunistic with respect to other business arrangements which may
arise. If we are not successful in this regard, we will aggressively pursue
other opportunities.
Since its inception, Cortech has been dedicated to the development of novel
therapies to treat serious medical conditions that have a high unmet need.
According to The Wall Street Journal, "nine out of every ten medicines that
enter clinical testing are discarded before reaching the market."1 In addition,
it takes on average 15 years and $500 million to bring one new medicine to
market. Despite these long odds, Cortech was successful in bringing three novel
compounds into clinical development and two of these compounds continue to hold
promise as potential therapies.
As a result of the difficulties inherent in drug development, the Company
believes that there is a need for continued persistence in order to extract the
value of Cortech's established technology. Quick buck artists may come and go,
but the value of Cortech's research and technology is what the Board believes to
be the real asset value of your Company.
ASPECTS OF CORTECH'S PORTFOLIO WHICH WE THINK
OFFER EXCITING POSSIBILITIES FOR STOCKHOLDERS.
Bradykinin Antagonists:
Cortech's bradykinin antagonists offer significant potential as novel therapies
for the treatment of head injuries and stroke, two different types of injuries
that are felt to share many of the same inflammatory processes. Data from a
Phase II, North American trial of BradycorTM in 133 patients with severe head
injury, that was analyzed independently by the American Brain Injury
Consortium2, showed that BradycorTM improved the outcome of those patients at 3
and 6 months after the injury. Moreover, the improvements were statistically
significant in the most severely injured patients. The improvements in outcome
were seen across a battery of neuropsychological tests including the Glasgow
Outcome Scale, which is considered an approvable endpoint by the FDA. These,
together with other favorable trends, led the Technical Director of the
Consortium to state publicly that:
"...of all the compounds that have been studied in severe traumatic
brain injury, including NMDA antagonists, oxygen radical scavengers and
calcium channel blockers, BradycorTM has exhibited the most encouraging
response in terms of functional outcome and safety thus far."3
Manuscripts describing the positive effects of BradycorTM in two separate trials
in patients with head injury have been prepared for publication in peer-reviewed
journals. One has been accepted for publication and the other will be submitted
for review shortly.
There are approximately 500,000 people hospitalized each year in the U.S. with a
head injury and the Company estimates that approximately 100,000 of these would
be candidates for treatment with BradycorTM. Unfortunately, SmithKline Beecham
terminated its collaboration with Cortech on BradycorTM before the trial had
been completed and before the long-term results were known. However, it is our
belief that an adequately sized, properly designed Phase III trial would have a
good chance of yielding positive results in this regard and we are currently
seeking a partner to undertake Bradycor's(TM) future development.
Cortech's lead, second-generation bradykinin antagonist, CP-0597, has shown
significant neuroprotective effects in animal models of stroke. A manuscript
describing some of these experiments along with a favorable editorial review was
published in the July 1997 issue of the journal Stroke. The journal's guest
editors commented that bradykinin antagonism:
"...reveals an attractive new target for neuroprotection in ischemic
and other forms of brain damage."
Neutrophil Elastase Inhibitors:
Ono Pharmaceutical Co., Ltd. is in the process of developing a selective
neutrophil elastase inhibitor for oral administration using Cortech's research.
Neutrophil elastase inhibitors have potential therapeutic application in a
variety of acute and chronic pulmonary disorders including emphysema and chronic
bronchitis. After providing approximately $10 million in funding to Cortech, Ono
is now continuing to fund and advance the program on its own. Cortech has
retained all rights to any compounds which arise from the collaboration in all
territories except for Japan, Korea, Taiwan and China, which comprise Ono's
territory.
Broader Protease Targets:
Cortech also has a portfolio of compounds with activities against a broader
array of elastases, including neutrophil elastase. These elastases are felt to
be important in the pathophysiology of pulmonary, vascular and dermatologic
disorders, including atherosclerosis, restenosis, psoriasis and atopic
dermatitis. CE-1037 is the most advanced of these compounds and we are currently
in discussions with potential partners regarding these applications.
Cortech's broader protease inhibitor technology is an enabling technology which
serves as a platform to facilitate the synthesis of a broad range of protease
inhibitors including those targeted against viral and inflammatory diseases and
cancer. We and our scientific advisors believe that this technology may have
significant potential value for Cortech's stockholders and we are exploring the
best way in which to maximize its value.
KOETHER MIGHT JUST SHUT IT DOWN
In contrast to the Board's plan to use the Company's technology to try to yield
significant value for its stockholders, Koether and his group have stated that
they might shut Cortech down. Such action might provide a modest, quick return
to stockholders who, like Koether, bought stock in the Company at low prices,
but it will not permit long-term stockholders to realize the potential value of
Cortech's technology. A fire sale of Cortech is not in the best interests of all
stockholders. Instead, the Cortech Board is committed to seeking ways in which
to generate long-term value for our stockholders and while the Company cannot
warrant that its partnering efforts will be successful or that products will
eventually be developed or commercialized, the Board remains committed to its
efforts in this regard.
Mr. Koether gives our science an "F" for failure and says that it has "failed
test, after test, after test." He attacks us for trying to maximize the return
on your investment by capitalizing on the Company's technology portfolio. Paul
Koether and his disruptive and costly proxy contest is jeopardizing the
Company's asset value, not adding to it. We urge you to reject him and his hand
picked slate of business associates, none of whom we believe have the expertise
or experience to capitalize on, or even understand, the real value in Cortech.
Please sign, date and mail the enclosed WHITE proxy card today. Even if you have
already signed a green "Asset Value" proxy card, you have every right to change
your vote on the WHITE proxy card.
Sincerely,
Bert Fingerhut
Chairman of the Board and
Acting Chief Executive Officer
August 17, 1998
IMPORTANT
Please sign, date and return your WHITE PROXY CARD today in the enclosed,
postage paid envelope.
If you have any questions or need assistance in voting your shares, please
contact the Company's proxy solicitor, D.F. King & Co., Inc. at 1-800-848-3051.
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1 S. Moore, "Failure is no Stranger in Drug Research," The Wall Street Journal,
June 15, 1998.
2 A Consortium of trauma centers that treat large numbers of
patients with traumatic brain injury and are dedicated to improving outcome in
these patients.
3 A. Marmarou, quotation, Cortech's press release issued August
25, 1997.
Permission was neither sought nor obtained to use the above quotes.
