X0202 3 2007-11-08 0 0000893970 INTERPHARM HOLDINGS INC IPA 0001350778 Aisling Capital II LP 88 SEVENTH AVE 30TH FL NEW YORK NY 10106 0 0 0 1 See Footnote 1 0001376172 AISLING CAPITAL PARTNERS, LP 888 SEVENTH AVENUE 30TH FLOOR NEW YORK NY 10106 0 0 0 1 See Footnote 1 0001376171 AISLING CAPITAL PARTNERS LLC 888 SEVENTH AVENUE 30TH FLOOR NEW YORK NY 10106 0 0 0 1 See Footnote 1 0001250195 ELMS STEVE 888 SEVENTH AVE 29TH FL NEW YORK NY 10106 0 0 0 1 See Footnote 1 0001297291 Purcell Dennis J AUXILIUM PHARMACEUTICALS, INC. 160 WEST GERMANTOWN PIKE NORRISTOWN PA 19401 0 0 0 1 See Footnote 1 0001172252 SCHIFF ANDREW N PLANET ZANETT INC 135 E 57TH ST NEW YORK NY 10022 0 0 0 1 See Footnote 1 Common Stock, par value $.01 per share 548315 D Series C-1 Convertible Preferred Stock 1.5338 Common Stock, par value $.01 per share 4474276 D Warrant 1.639 2011-09-11 Common Stock, par value $.01 per share 2281914 D All of the securities reported herein are held for the account of Aisling Capital II, LP ("Aisling"). Aisling Capital Partners, LP, a Delaware limited partnership ("Aisling Partners"), is the general partner of Aisling. Aisling Capital Partners LLC, a Delaware limited liability company ("Aisling Partners GP"), is the general partner of Aisling Partners. Mr. Steve Elms, Mr. Dennis Purcell and Mr. Andrew Schiff are the managing members of Aisling Partners GP. The Series C-1 Convertible Preferred Stock reported in this Form 3 was issued to Aisling on September 11, 2006 and consists of 10,000 shares, par value $0.01 that were initially convertible, at the holder's option, into shares of Common Stock at a conversion price of $1.5338. The Series C-1 Preferred Stock has no expiration date. The warrant was issued to Aisling on September 11, 2006 and was immediately exercisable. The Certificate of Designation for the Series C-1 Preferred Stock contains a blocker provision (the "Blocker") under which a holder of the Series C-1 Preferred Stock does not have the right to convert the Series C-1 Preferred Stock into Common Stock to the extent that such conversion would result in beneficial ownership by such holder of more than 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such conversion. The Warrant contains a similar provision. As a result of the Blocker, the Reporting Persons are reporting in this Form 3 only those shares of the Common Stock that may be acquired upon the conversion of the Series C-1 Preferred Stock or the exercise of the warrant representing 9.99% of the current outstanding shares. If the Blocker were not in place, as of the date hereof, the Reporting Persons would report an additional 2,110,320 shares of Common Stock. (2) Dennis Purcell is signing in his capacity as Senior Managing Director of Aisling Capital Partners LLC, as Managing Member of Aisling Capital Partners, LP, as General Partner of Aisling Capital II, LP. (3) Dennis Purcell is signing in his capacity as Senior Managing Director of Aisling Capital Partners LLC, as Managing Member of Aisling Capital Partners, LP. (4) Dennis Purcell is signing in his capacity as Senior Managing Director of Aisling Capital Partners LLC. On November 8, 2007, Aisling and Tullis-Dickerson Capital Focus III, L.P. ("TD III") were granted an irrevocable proxy (the "Proxy") over approximately 35.7 million shares of Common Stock (the "Proxy Shares") held by either Raj Sutaria, Perry Sutaria or by LLCs established and maintained for the benefit of the Sutaria family. Under the Proxy, a committee comprised of a designee of Aisling, a designee of TD III and Perry Sutaria acting by majority vote, will vote the Proxy Shares only with respect to (i) electing or removing members of the Board of Directors of the Issuer and (ii) voting on amendments, additions, deletions or modifications to the Issuer's by-laws. As a result, the reporting persons may be deemed to be a member of a "group" with TD III and Perry Sutaria, owning more than 10% of the common stock, for purposes of the Securities Exchange Act of 1934. The reporting persons disclaim beneficial ownership of any securities deemed to be owned by the group that are not directly owned by the reporting persons. This statement shall not be deemed an admission that any of the reporting persons is, for any or all purposes, a member of such a group. See Exhibit 99.1 /s/ Dennis Purcell 2007-11-15 /s/ Dennis Purcell 2007-11-15 /s/ Dennis Purcell 2007-11-15 /s/ Steve Elms 2007-11-15 /s/ Dennis Purcell 2007-11-15 /s/ Andrew Schiff 2007-11-15