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Posted on: 08/07/2006

Subject: NeoPharm, Inc. (Nasdaq: NEOL) Press Release -- NEOL Provides Update on Reimbursement Progress for Cintredekin Besudotox

Paul Arndt, Corporate Communications Manager
 Unique Coding Provided for Convection Enhanced Delivery
WAUKEGAN, Illinois – August 7, 2006 – NEOPHARM, Inc. (Nasdaq: NEOL) today announced progress in the Company’s reimbursement position for CINTREDEKIN BESUDOTOX (IL13-PE38QQR), which is being studied for the treatment of glioblastoma multiforme at first recurrence, the most common type of malignant primary brain tumor in adults.  The American Medical Association (AMA) and the Centers for Medicare and Medicaid Services (CMS) have assigned unique CPT and ICD-9 procedure codes, respectively, for Convection Enhanced Delivery (CED) catheter implantation, a novel drug delivery technique used to administer CINTREDEKIN BESUDOTOX directly into the brain.  The CPT and ICD-9 procedure coding systems are designed to define and describe medical procedures performed by physicians and other health providers and are expected to be of importance in securing appropriate reimbursement for the potential CINTREDEKIN BESUDOTOX treatment regimen.
CINTREDEKIN BESUDOTOX (IL13-PE38QQR), which is currently being studied in the Company’s ongoing Phase III PRECISE trial, is delivered by CED, a continuous low flow positive pressure infusion directly into the brain which allows for optimal and uniform distribution of the drug to areas of tumor infiltration.  In Phase I/II clinical studies, improved catheter placement and positioning has resulted in improved patient outcomes, including median survival.
“As a neurosurgeon, the establishment of unique CPT and ICD-9 procedure codes should improve efficiency within the hospital and ensure accurate and more consistent claim filing and reimbursement,” said Dr. Sandeep Kunwar, Associate Professor of Neurological Surgery, University of California at San Francisco (UCSF) and lead investigator of the PRECISE trial. 
The CPT code (0169T), which will be implemented in January 2007, addresses the stereotactic placement of infusion catheter(s) in the brain for delivery of therapeutic agent(s), including computerized stereotactic planning and burr hole(s).   The unique ICD-9 procedure code (01.28) for the placement of intracerebral catheter(s) via burr hole(s) was released as part of the Medicare 2007 Inpatient Prospective Payment System (IPPS) final.  The IPPS rule takes effect on October 1, 2006. 
“We are very pleased with the decision of the AMA and CMS to recognize this procedure and technology as important to patients and physicians,” said Tim Walbert, Executive Vice-President, Commercial Operations, NEOPHARM.  “This represents the diligent work of professional societies such as the AANS/CNS Section on Tumors and NEOPHARM to advance promising technologic advances for patients with dismal conditions.  As we prepare for a potential filing to FDA for approval of CINTREDEKIN BESUDOTOX, one of our priorities is to ensure that both physicians and hospitals have efficient tracking for and are reimbursed for the placement of catheters for use via CED.”
About Glioblastoma Multiforme
Glioblastoma multiforme (GBM) is the most common type of malignant primary brain tumor in adults. According to the Central Brain Tumor Registry of the United States (, GBM tumors usually affect men more commonly than women, particularly men between the ages of 60 and 85 years. According to the CBTRUS, approximately 10,000 people are diagnosed annually with malignant glioma (GBM and anaplastic astrocytoma) and this disease is eventually fatal for most patients. Survival time for patients with GBM ranges from six months for recurrent disease to 12 months with newly diagnosed disease despite aggressive treatments including surgery, radiation therapy and chemotherapy.
GBM tumors mainly arise in the cerebral hemispheres (the main portions of the brain), but they can also occur in the brainstem, cerebellum, or spinal cord. Symptoms of a GBM can include headaches that are caused by increased intracranial pressure, neurological deficits such as weakness, sensory loss, coordination difficulties, visual impairment, cognitive impairment affecting memory and language, seizures, and personality changes.
CINTREDEKIN BESUDOTOX is a recombinant protein consisting of a single 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 on malignant glioma cells, but only to a minimal amount if at all on healthy brain cells. The IL13 portion is designed to bind to receptors on tumor cells like a key fits into a lock. The cancer cell appears to latch onto and absorb the IL13 and the attached PE38, causing destruction of the cancer cell. Healthy brain cells appear to be unharmed because they do not internalize the PE. The drug is delivered via Convection Enhanced Delivery (CED); a novel drug delivery system using catheters placed following tumor resection (removal), in areas with microscopic tumor spread or at risk of tumor spread around the tumor resection cavity.
CINTREDEKIN BESUDOTOX has received Orphan Drug designation and Fast Track designation from the U.S. Food and Drug Administration (FDA). CINTREDEKIN BESUDOTOX was also accepted into FDA's Pilot 2 Program for continuous marketing applications. CINTREDEKIN BESUDOTOX has also received Orphan Drug designation in Europe.
Promising data for this potential therapeutic advance in the treatment of GBM has been observed in Phase I/II trials, the results of which have been previously reported by the Company. In addition, the importance of adequate catheter positioning in order to achieve effective distribution of CINTREDEKIN BESUDOTOX in brain tissue was assessed in these Phase I/II trials, leading to specific guidelines for catheter positioning and deferred catheter placement used in the Company's ongoing Phase III PRECISE Trial. Improved catheter placement translated into a better patient outcome for the 45 (complete Phase I/II patient set) recurrent GBM patients treated post-tumor resection in the Phase I/II trials, with an overall median survival of 44.0 weeks (95% Confidence Interval (CI): 36.1-55.6) including 42 percent of patients with less than 2 optimally positioned catheters, while patients with greater than or equal to 2 catheters optimally positioned surviving with a median of 53.6 weeks (95% CI: 36.1-70.3). Separately, one-year and two-year survival rates for recurrent GBM patients were 40 percent and 13 percent respectively.
Pivotal Phase III Trial - PRECISE
PRECISE, an acronym for Phase III Randomized Evaluation of Convection Enhanced Delivery of IL13-PE38QQR with Survival Endpoint,, is a randomized, controlled Phase III clinical trial. It was designed to enroll up to 300 patients in order to obtain 270 patients with confirmed GBM at first recurrence at study entry surgical resection for the intent-to-treat patient population, and compare overall survival, drug safety and quality of life of patients receiving CINTREDEKIN BESUDOTOX with patients receiving Gliadel Wafer in the treatment of first recurrent GBM following surgical tumor resection.
PRECISE achieved the 270 patient intent-to-treat milestone (276 intent-to-treat) in early December after enrolling 294 patients. Patients were randomized so that 2 patients received CINTREDEKIN BESUDOTOX via CED for every 1 patient that received Gliadel Wafer placed in the resection cavity at the time of resection. The primary efficacy analysis of the trial will be based on the comparison of the overall patient survival curves of the two treatment groups.
In December 2005, the DMC recommended that the PRECISE Trial continue as planned under the approved protocol.  In June 2006, the DMC conducted an interim efficacy analysis at the 160 death and recommended continuation to the final efficacy analysis (triggered at 215 deaths).  The DMC reported no treatment related adverse or serious adverse events that differed from previous reports and those normally associated with GBM and reported that compliance in terms of catheter placement guidelines was over 80%.  The final efficacy analysis is currently expected to occur in the first quarter of 2007.
About Convection Enhanced Delivery (CED)
Convection enhanced delivery (CED) involves the placement of one or more catheters into a brain tumor or nearby brain tissue used to infuse slowly and continuously an anti-tumor drug or other substance over several days. This technique allows relatively large volumes of brain tissue to be treated.  CED is used to infuse CINTREDEKIN BESUDOTOX directly to brain tissue at risk for residual infiltrating tumor in order to prevent or delay tumor recurrence (tumor cell growth).  The safety and tolerability of CED is also being assessed as part of the CINTREDEKIN BESUDOTOX program. 
NEOPHARM's Commitment to Oncology
NEOPHARM employees share a common goal: bringing hope to cancer patients and their families through the research and development of new cancer drugs and therapies. The Company's oncology portfolio is built on two novel, proprietary platforms: a tumor-targeting platform, and the NeoLipid® Liposomal Drug Delivery platform. Through its research and clinical studies, as well as its work with physicians, scientists, and advocacy groups, NEOPHARM is helping to enhance the lives of cancer patients.
About NEOPHARM, Inc.
NEOPHARM, Inc., based in Waukegan, Illinois, is a publicly traded biopharmaceutical company dedicated to the research, development and commercialization of new and innovative cancer drugs for therapeutic applications. Additional information, including ongoing clinical trials, can be obtained by visiting NEOPHARM's Web site at
Forward Looking Statements - This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company has tried to identify such forward-looking statements by use of such words as "expects", "intends", "hopes", “potentially”, "anticipates", "believes", "could", "may", "evidences", "estimates" and other similar expressions, but these words are not the exclusive means of identifying such statements. Such statements include, but are not limited to, any statements relating to the Company's drug development program, including, but not limited to clinical trials involving cintredekin besudotox, future patient survival in the Company's ongoing Phase I/II studies and PRECISE trial for CINTREDEKIN BESUDOTOX, the use of CED, future reimbursement for CED, and any other statements that are not historical facts. Such statements involve risks and uncertainties, including, but not limited to, those risks and uncertainties relating to difficulties or delays in financing, development, testing, filing for and obtaining regulatory approval, the date when the final efficacy analysis in the PRECISE trial will be reported, production and marketing of CINTREDEKIN BESUDOTOX, uncertainty regarding the availability of third party production capacity, unexpected adverse side effects or inadequate therapeutic efficacy of CINTREDEKIN BESUDOTOX that could slow or prevent CINTREDEKIN BESUDOTOX from coming to market, uncertainty regarding reimbursement for CED, the Company's ability to market CINTREDEKIN BESUDOTOX, directly or through independent distributors, the uncertainty of patent protection for the Company's intellectual property or trade secrets, including, but not limited to, CINTREDEKIN BESUDOTOX and CED, and other risks detailed from time to time in filings the Company makes with the Securities and Exchange Commission including its annual reports on Form 10-K and quarterly reports on Forms 10-Q. Such statements are based on management's current expectations, but actual results may differ materially due to various factors, including those risks and uncertainties mentioned or referred to in this press release. Accordingly, you should not rely on these forward-looking statements as a prediction of actual future results.
Paul Arndt
Corporate Communications Manager
NeoPharm, Inc.
1850 Lakeside Drive
Waukegan, IL  60085
847-887-0800 x 2342
847-887-9281 - Fax
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