More than 640,000 people each year in the U.S. have an ischemic stroke. Stroke is the third leading cause of death and the leading cause of serious long-term disability in the U.S., according to the American Stroke Association. Approximately 80% of U.S. ischemic stroke patients reach an emergency room within 24 hours after the onset of stroke symptoms, according to DataMonitor. In contrast, only approximately 20% of U.S. ischemic stroke patients reach an emergency room within the FDA-mandated three-hour time window for treatment with the currently approved thrombolytic. However, due to the three-hour treatment window and other limitations, fewer than 4% of ischemic stroke patients in the U.S. currently are treated with a thrombolytic.

There are two emerging trends in ischemic stroke therapy: interventional therapy with a catheter and intravenous administration of a drug. Interventional therapy requires specialized facilities and trained personnel that enables localized treatment at the site of the clot. Intravenous administration can be initiated more quickly, such as in the emergency room, but it is not a therapeutic approach targeted directly to the site of the blood clot.

The first program is a group of clot-dissolving drugs, or thrombolytics, that are variants of urokinase, a natural human protein primarily produced in the kidneys that stimulates the body’s natural clot-dissolving processes. The second program, SonoLysis therapy, centers on a novel treatment that breaks blood clots apart by applying ultrasound to submicron-sized bubbles, which is called SonoLysis bubbles.

The Company has a broad portfolio of product candidates to treat ischemic stroke that is aimed at expanding the number of patients eligible for treatment. The Company’s ischemic stroke product portfolio consists of PROLYSE, one of its proprietary thrombolytics; SonoLysis therapy, its proprietary SonoLysis bubbles with ultrasound; and SonoLysis combination therapy, its SonoLysis bubbles with ultrasound and a thrombolytic.

PROLYSE is a recombinant pro-urokinase, or a pro-drug form of urokinase that does not become active until it reaches a blood clot, which may reduce the risk of bleeding. PROLYSE has been shown in a Phase 3 clinical trial of 180 patients to be well tolerated and to demonstrate activity in dissolving cerebral blood clots when administered as long as six hours after the onset of stroke symptoms. This treatment window is twice as long as the three-hour restriction that the U.S. Food and Drug Administration, or FDA, has imposed on alteplase, or tPA, the only thrombolytic approved for use in ischemic stroke patients.

SonoLysis therapy is the combination of SonoLysis bubbles and ultrasound that breaks up blood clots via a mechanical mechanism of action. Because SonoLysis therapy does not include a thrombolytic and its associated risk of bleeding, the Company believes SonoLysis therapy may offer several advantages over other treatments for ischemic stroke, including an extended treatment window, rapid initiation of treatment via intravenous administration and availability for use in patients for whom thrombolytics are contraindicated due to risk of bleeding.

Research and development expenses increased from approximately $764,000 in the first quarter of 2005 to approximately $1.7 million in the first quarter of 2006.

General and administrative expenses increased from approximately $661,000 in the first quarter of 2005 to approximately $1.6 million in the first quarter of 2006.

Interest and other income increased from approximately $23,000 in the first quarter of 2005 to approximately $105,000 in the first quarter of 2006.