NeoPharm Announces PRECISE Trial Update; Independent Data Monitoring Committee Recommends PRECISE Trial Continue to Final Efficacy Analysis

NeoPharm, Inc. (Nasdaq:NEOL) today announced that theindependent Data Monitoring Committee (DMC) responsible for overseeingthe CINTREDEKIN BESUDOTOX (IL13-PE38QQR) pivotal Phase III PRECISETrial for the treatment of glioblastoma multiforme (GBM) has analyzedthe data from the trial's interim efficacy analysis (160 deaths) andhas recommended that the trial continue to the final efficacy analysisat 215 deaths. The DMC's role was to conduct the interim analysis todetermine if efficacy could be proven early, or to proceed to thefinal efficacy analysis at 215 deaths.

"We knew that reaching the interim efficacy endpoint was anextremely high statistical hurdle and we look forward to the finalstudy endpoint, which we currently expect to occur in the firstquarter of 2007," said Guillermo A. Herrera, President and ChiefExecutive Officer of NeoPharm. "We continue to be encouraged by thepreviously reported prolonged survival times observed in the PhaseI/II trials and view these prolonged survival times as providingevidence that the PRECISE Trial milestones will eventually beachieved. Our trial investigators continue to be encouraged about ourchances for a positive outcome for the trial. Based on this, wecontinue to be optimistic about obtaining a positive final studyoutcome."

The final efficacy analysis of the PRECISE trial will be based onthe comparison of the overall patient survival curves of the twotreatment groups. If there is a statistically significant difference,or separation, in the overall survival curves of cintredekin besudotoxand Gliadel(R), then the PRECISE trial will have met its endpoint. Inorder to reach statistical significance at the Final Efficacyanalysis, the survival advantage for cintredekin besudotox overGliadel Wafer must achieve a p-value of less than or equal to 0.048versus the p-value of less than or equal to 0.005 required to reachstatistical significance at interim efficacy analysis.

"I remain confident in the potential of CINTREDEKIN BESUDOTOX totreat this dismal disease, based on the median survival resultsobserved to date in the Phase I/II studies," said Sandeep Kunwar, MD,Associate Professor of Neurological Surgery, University of Californiaat San Francisco (UCSF) and principal investigator of the PRECISEtrial.

Conference Call

NeoPharm will host a conference call to discuss the DataMonitoring Committee's recommendation on:
Thursday, June 22, 2006 at 11:00 a.m. Eastern/8:00 a.m. Pacific
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Domestic: 866-203-3436, passcode 47368399
International: 617-213-8849, passcode 47368399

Audio replays will be available through June 29, 2006.

Domestic: 888-286-8010, passcode 95197698
International: 617-801-6888, passcode 95197698

The live call and replay will also be available via webcast atwww.neopharm.com.

About Glioblastoma Multiforme

Glioblastoma multiforme (GBM) is the most common type of malignantprimary brain tumor in adults. According to the Central Brain TumorRegistry of the United States (www.cbtrus.org), GBM tumors usuallyaffect men more commonly than women, particularly men between the agesof 60 and 85 years. According to the CBTRUS, approximately 10,000people are diagnosed annually with malignant glioma (GBM andanaplastic astrocytoma) and this disease is eventually fatal for mostpatients. Survival time for GBM patients ranges from six months forrecurrent disease to 12 months with newly diagnosed disease despiteaggressive treatments including surgery, radiation therapy andchemotherapy.

GBM tumors mainly arise in the cerebral hemispheres (the mainportions of the brain), but they can also occur in the brainstem,cerebellum, or spinal cord. Symptoms of a GBM can include headachesthat are caused by increased intracranial pressure, neurologicaldeficits such as weakness, sensory loss, coordination difficulties,visual impairment, cognitive impairment affecting memory and language,seizures, and personality changes.

About CINTREDEKIN BESUDOTOX

CINTREDEKIN BESUDOTOX is a recombinant protein consisting of asingle molecule composed of two parts: a tumor-targeting molecule(Interleukin-13 or IL13) and a cytotoxic agent (Pseudomonas Exotoxin,or PE38). IL13 receptors are present in appreciable numbers onmalignant glioma cells, but only to a minimal amount if at all onhealthy brain cells. The IL13 portion is designed to bind to receptorson tumor cells like a key fits into a lock. The cancer cell appears tolatch onto and absorb the IL13 and the attached PE38, causingdestruction of the cancer cell. Healthy brain cells appear to beunharmed because they do not internalize the PE. The drug is deliveredvia Convection Enhanced Delivery (CED), a novel drug delivery systemusing catheters placed following tumor resection (removal), in areaswith microscopic tumor spread or at risk of tumor spread around thetumor resection cavity.

CINTREDEKIN BESUDOTOX has received Orphan Drug designation andFast Track designation from the U.S. Food and Drug Administration(FDA). CINTREDEKIN BESUDOTOX was also accepted into FDA's Pilot 2Program for continuous marketing applications. CINTREDEKIN BESUDOTOXhas also received Orphan Drug designation in Europe.

Promising data for this potential therapeutic advance in thetreatment of GBM has been observed in Phase I/II trials, the resultsof which have been previously reported by the Company. In addition,the importance of adequate catheter positioning in order to achieveoptimal distribution of CINTREDEKIN BESUDOTOX in brain tissue wasassessed, leading to the specific guidelines for catheter positioningand deferred catheter placement used in the Company's ongoing PhaseIII PRECISE Trial. Improved catheter placement translated into abetter patient outcome for the 45 (complete Phase I/II patient set)recurrent GBM patients treated post-tumor resection in the Phase I/IItrials, with an overall median survival of 44.0 weeks (95% ConfidenceInterval (CI): 36.1-55.6) including 42 percent of patients with lessthan 2 adequately positioned catheters, while patients with greaterthan or equal to 2 catheters adequately positioned surviving with amedian of 53.6 weeks (95% CI: 36.1-70.3). Separately, one-year andtwo-year survival rates for recurrent GBM patients were 40 percent and13 percent respectively.

Pivotal Phase III Trial - PRECISE

PRECISE, an acronym for Phase III Randomized Evaluation ofConvection Enhanced Delivery of IL13-PE38QQR with Survival Endpoint,www.precisetrial.com, is a randomized, controlled Phase III clinicaltrial. It was designed to enroll up to 300 patients in order to obtain270 patients with confirmed GBM at first recurrence at study entrysurgical resection for the intent-to-treat patient population, andcompare overall survival, drug safety and quality of life of patientsreceiving CINTREDEKIN BESUDOTOX with patients receiving Gliadel Waferin the treatment of first recurrent GBM following surgical tumorresection.

PRECISE achieved the 270 patient intent-to-treat milestone (276intent-to-treat) in early December after enrolling 294 patients.Patients were randomized so that 2 patients received CINTREDEKINBESUDOTOX via CED for every 1 patient that received Gliadel Waferplaced in the resection cavity at the time of resection. The primaryefficacy analysis of the trial will be based on the comparison of theoverall patient survival curves of the two treatment groups.

In December 2005, the DMC recommended that the PRECISE Trialcontinue as planned under the approved protocol. The DMC observed notreatment related adverse or serious adverse events that differed fromthose seen in the Phase I/II trials, and observed that, at that time,optimal catheter placement (greater than or equal to 2 cathetersadequately positioned) had been achieved in more than 80% of patients.A final efficacy analysis (triggered at 215 deaths) is currentlyexpected to occur late in the fourth quarter of 2006 or first quarterof 2007.

About GLIADEL(R) Wafers

A GLIADEL(R) Wafer delivers BCNU (known as carmustine), a commonlyused chemotherapeutic anti-tumor agent for GBM, directly to the braintumor resection cavity. Up to eight dime-sized wafers are placed inthe space once occupied by the tumor at the time of resection. Thewafers slowly dissolve over the next two to three weeks, bathing thesurrounding cells with BCNU. GLIADEL Wafer has been approved by theFDA for the treatment of recurrent and newly diagnosed GBM. By design,the wafers can only kill cells that the released carmustine comes incontact with and the drug is limited by diffusion in reaching viabletumor cells outside the tumor resection cavity.

In an earlier Phase III clinical trial sponsored by GuilfordPharmaceuticals, median survival of 28 weeks was obtained with theGLIADEL Wafer compared to 20 weeks for placebo in 145 recurrent GBMpatients, a 40% difference. Separately, 1-year and 2-year survivalrates for recurrent GBM patients were 20% and 10%, respectively. Apost hoc analysis of the GLIADEL Wafer data for favorable prognosticfactors did not measurably change the difference in median survivalbetween the GLIADEL Wafer and the placebo groups (from 8 weeks to 9weeks). However, the difference in overall median survival between thetwo arms decreased to 29% from 40%.

NeoPharm's Commitment to Oncology

NeoPharm employees share a common goal: bringing hope to cancerpatients and their families through the research and development ofnew cancer drugs and therapies. The Company's oncology portfolio isbuilt on two novel, proprietary platforms: a tumor-targeting platform,and the NeoLipid(R) Liposomal Drug Delivery platform. Through itsresearch and clinical studies, as well as its work with physicians,scientists, and advocacy groups, NeoPharm is helping to enhance thelives of cancer patients.

About NeoPharm, Inc.

NeoPharm, Inc., based in Waukegan, Illinois, is a publicly tradedbiopharmaceutical company dedicated to the research, development andcommercialization of new and innovative cancer drugs for therapeuticapplications. Additional information, including ongoing clinicaltrials, can be obtained by visiting NeoPharm's Web site atwww.neopharm.com.

Forward Looking Statements - This press release contains"forward-looking statements" within the meaning of Section 27A of theSecurities Act of 1933 and Section 21E of the Securities Exchange Actof 1934. The Company has tried to identify such forward-lookingstatements by use of such words as "expects," "intends," "hopes,""anticipates," "believes," "could," "may," "evidences" and"estimates," and other similar expressions, but these words are notthe exclusive means of identifying such statements. Such statementsinclude, but are not limited to, any statements relating to theCompany's drug development program, including, but not limited toclinical trials involving cintredekin besudotox, future patientsurvival in the Company's ongoing Phase I/II studies and PRECISE trialfor cintredekin besudotox, and any other statements that are nothistorical facts. Such statements involve risks and uncertainties,including, but not limited to, those risks and uncertainties relatingto difficulties or delays in financing, development, testing, filingfor and obtaining regulatory approval, the date when the finalefficacy analysis will be reported, production and marketing of theCompany's drug and non-drug compounds, including, but not limited to,cintredekin besudotox, uncertainty regarding the availability of thirdparty production capacity, unexpected adverse side effects orinadequate therapeutic efficacy of the Company's drug and non-drugcompounds, including, but not limited to, cintredekin besudotox, thatcould slow or prevent products coming to market, uncertainty regardingthe Company's ability to market its drug and non-drug products,including, but not limited to, cintredekin besudotox, directly orthrough independent distributors, the uncertainty of patent protectionfor the Company's intellectual property or trade secrets, including,but not limited to, cintredekin besudotox, and other risks detailedfrom time to time in filings the Company makes with the Securities andExchange Commission including its annual reports on Form 10-K andquarterly reports on Forms 10-Q. Such statements are based onmanagement's current expectations, but actual results may differmaterially due to various factors, including those risks anduncertainties mentioned or referred to in this press release.Accordingly, you should not rely on these forward-looking statementsas a prediction of actual future results.