Phase II Clinical Trial of NeoPharm's LE-SN38 Initiated by NCI CALGB in Patients with Metastatic Colorectal Cancer; First Patients Treated

LE-SN38 is NeoPharm's NeoLipid(R) liposomal formulation of SN-38,the active metabolite of irinotecan (Camptosar(R)), a chemotherapeuticpro-drug approved for the treatment of advanced colorectal cancer.

"The CALGB is pleased to be collaborating with NeoPharm on theclinical development of LE-SN38," said Richard L. Schilsky, MD,Professor of Medicine and Associate Dean for Clinical Research,Biological Sciences Division of the University of Chicago, andChairman of the Cancer and Leukemia Group B. "We welcome theopportunity to provide colorectal cancer patients with an additionalclinical trial treatment option."

"Our LE-SN38 drug candidate, as well as the underlying NeoLipid(R)drug delivery platform are an important part of our oncologyportfolio," said Guillermo Herrera, NeoPharm's President and ChiefExecutive Officer. "We are pleased to be moving LE-SN38 into Phase IItesting with CALGB, one of the premiere oncology clinical researchgroups, in the hope of eventually providing colorectal cancer patientswith a new and potentially less toxic treatment option."

The Phase II trial will seek to enroll up to 54 patients. Theprimary endpoint of the trial is overall tumor response rate (ORR)following treatment with LE-SN38 as a second-line treatment inpatients with metastatic colorectal cancer. Other endpoints includedetermining the safety profile of LE-SN38 in this patient population,as well as the progression-free survival (PFS) and overall survival(OS) for the patients treated.

Patients will receive LE-SN38 by intravenous infusion over 90minutes every 21 days as long as the tumor does not grow or patientsare unable to tolerate the treatment.

It is currently expected to take up to 1 year to fully enroll thetrial. An initial assessment of tumor response will be made after thefirst 21 patients are treated. Enrollment will continue while tumorresponse is being evaluated in the initial group of patients. Ifresults from the CALGB study appear promising, future LE-SN38development could include possible development and initiation of aPhase III trial.

There are multiple study sites across the U.S. currentlyrecruiting patients into the CALGB study. For specific studyinformation, please visit www.clinicaltrials.gov, keyword "LE-SN38."

About Colorectal Cancer

Colorectal cancer develops in the colon (large intestine) and/orthe rectum, and affects more than 150,000 patients annually. Accordingto the National Cancer Institute (www.cancer.gov), colorectal canceris the third most common cancer and the third leading cause ofcancer-related mortality in the United States. Colorectal cancer isassociated with severe morbidities, including bowel obstruction, liverfailure, pain, weakness, and wasting. Until age 50, men and women havesimilar incidence and mortality rates; after age 50, men are morevulnerable. The NCI estimates that approximately $8.4 billion (in 2004dollars) is spent annually in the United States on treatment ofcolorectal cancer.

About LE-SN38

LE-SN38 is the Company's NeoLipid(R) Liposomal formulation ofSN-38, the active, but poorly soluble, metabolite of Camptosar(R), achemotherapeutic pro-drug, which is used as a first-line andsecond-line treatment for advanced colorectal cancer. A pro-drug is acompound that is converted into the active drug in the body. However,Camptosar(R) is converted into SN-38 in colorectal cancer cells atdifferent rates in different patients, and this variability inconversion rates may result in suboptimal treatment. By employing theCompany's proprietary NeoLipid(R) technology to directly deliverSN-38, the Company hopes to minimize treatment variability.

A Phase I clinical trial was completed in 2005 and showed thepotential for decreased side effects, particularly diarrhea, comparedto published results of Camptosar(R). The results of that trial werepresented at the American Society of Clinical Oncology (ASCO) meetingin June 2005, and were used to determine the Phase II study dose.

About the Cancer and Leukemia Group B - CALGB

The CALGB is a national clinical research group sponsored by theNational Cancer Institute, with its central office headquartered atthe University of Chicago and its statistical center located at DukeUniversity. The CALGB was founded in 1956 with a goal of bringingtogether clinical oncologists and laboratory investigators to developbetter treatments for cancer. Since 1956, CALGB has grown into anational network of 29 university medical centers, more than 225community hospitals and more than 3000 oncology specialists whocollaborate in clinical research studies aimed at reducing themorbidity and mortality from cancer, relating the biologicalcharacteristics of cancer to clinical outcomes and developing newstrategies for the early detection and prevention of cancer.

CALGB research is focused on seven major disease areas: leukemia,lymphoma, breast cancer, lung cancer, gastrointestinal malignancies,genito-urinary malignancies, and melanoma. In each of these areas,multi-modality treatment programs are designed by national experts inan attempt to cure more patients with cancer. Treatment protocols arecarefully developed and monitored and are often coupled with studiesof cancer biology, quality of life, pharmacology andcost-effectiveness measures so that improvements in therapy can beplaced in the proper clinical perspective in today's health caremarketplace.

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. NeoPharm's oncology portfolio is builton two novel, proprietary platforms: a tumor-targeting platform, andthe NeoLipid(R) Liposomal Drug Delivery platform. Through its researchand clinical studies, as well as its work with physicians, scientists,and advocacy groups, NeoPharm is helping to enhance the lives ofcancer 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 LE-SN38, future patient recruitment for orpatient survival in the Company's ongoing Phase II studies, forLE-SN38, the possible initiation of a Phase III clinical trial forLE-SN38, and any other statements that are not historical facts. Suchstatements involve risks and uncertainties, including, but not limitedto, those risks and uncertainties relating to difficulties or delaysin financing, development, testing, obtaining regulatory approval,production and marketing of the Company's drug and non-drug compounds,including, but not limited to, LE-SN38, uncertainty regarding theavailability of third party production capacity, unexpected adverseside effects or inadequate therapeutic efficacy of the Company's drugand non-drug compounds, including, but not limited to, LE-SN38, 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, LE-SN38, directly or throughindependent distributors, the uncertainty of patent protection for theCompany's intellectual property or trade secrets, including, but notlimited to, LE-SN38, and other risks detailed from time to time infilings the Company makes with the Securities and Exchange Commissionincluding its annual reports on Form 10-K and quarterly reports onForms 10-Q. Such statements are based on management's currentexpectations, but actual results may differ materially due to variousfactors, including those risks and uncertainties mentioned or referredto in this press release. Accordingly, you should not rely on theseforward-looking statements as a prediction of actual future results.