EpiCept Corporation (Nasdaq and OMX Nordic Exchange: EPCT) today announced operating and financial results for the three and six months ended June 30, 2009. For the second quarter of 2009, the net loss attributable to common stockholders declined 9% to $7.1 million, or $0.06 per share, compared with a net loss attributable to common stockholders of $7.8 million, or $0.15 per share, for the second quarter of 2008. For the six months ended June 30, 2009, the net loss attributable to common stockholders was $29.6 million, or $0.27 per share, compared with a net loss attributable to common stockholders of $13.8 million, or $0.28 per share, for the six months ended June 30, 2008.

For the six months ended June 30, 2009, other expense, net amounted to $20.0 million, consisting primarily of interest expense incurred as a result of the conversion of $24.5 million of the Company's 7.5556% convertible subordinated notes due 2014 into approximately 27.2 million shares of its common stock. Under the terms of the notes, the holders received a make-whole payment in an amount equal to the interest payable through the scheduled maturity of the converted notes, which was funded from restricted cash. As of June 30, 2009, EpiCept had cash and cash equivalents of $14.1 million and 130.7 million shares outstanding.

"During the second quarter we continued to advance our important product candidates both commercially and in the clinic," said Jack Talley, EpiCept's Chief Executive Officer. "We launched a Named-Patient Program for Ceplene® to ensure that patients with Acute Myeloid Leukemia in first remission have access to this vital drug while we work to secure a marketing partner in Europe. We also sponsored our first commercial booth at the European Hematology Association meeting in Berlin for Ceplene®, began a post-marketing study with Ceplene® to fulfill our post-approval commitments with the EMEA, recently filed an NDS in Canada and made progress in preparing a regulatory submission for approval of Ceplene® in the U.S."

Mr. Talley added, "We narrowed our net loss in the second quarter, despite recording approximately $1 million in expenses related to closing our San Diego facility. Lower operating expenses for the quarter reflect actions taken in January to reduce expenses by rationalizing facilities and reducing headcount, while streamlining our focus on drug candidates that are closer to commercialization or partnering."

EpiCept today provided an update on Ceplene® and several of the Company's key product candidates:

Ceplene® - approved in the European Union for the remission maintenance and prevention of relapse of patients with Acute Myeloid Leukemia (AML) in first remission; AML is the most deadly form of leukemia in adults. In June 2009 EpiCept launched a Named Patient Program for Ceplene® in Europe and certain other markets through a partnership with IDIS. Drug inventory has been manufactured and shipped to the European Union for use by IDIS and in preparation for the commercial launch. EpiCept continues its negotiations with several prospective partners to license the European marketing rights to Ceplene®. The Company expanded its licensing efforts during the second quarter for Ceplene® because following the earlier signing of a preliminary agreement with a prospective partner, that agreement was not consummated. Also during the second quarter EpiCept initiated the post-approval clinical study that is requested under the marketing authorization with the European Medicines Agency (EMEA). This study will enroll approximately 150 patients in approximately 25 leading European hematology centers. The Company recently filed a New Drug Submission (NDS) with Health Canada and expects to file a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) around year-end 2009.

EpiCeptTM NP-1 - a prescription topical analgesic cream designed to provide long-term relief from the pain of peripheral neuropathies, which affect more than 15 million people in the U.S. alone. In January 2009 EpiCept reported positive top line results from a 360-patient Phase IIb trial of NP-1 in patients with post-herpetic neuralgia. In this trial NP-1 achieved statistically significant pain relief as compared to placebo and was not statistically different in pain relief to the market leader gabapentin, yet had fewer CNS side effects. During the second quarter EpiCept launched its efforts to obtain a strategic partner to share the Phase III development costs of NP-1 and to market the product globally.

Crinobulin (EPC2407) - a vascular disruption agent which has demonstrated potent anti-tumor activity in both preclinical and early clinical studies. In preclinical in vitro and in vivo studies, crinobulin has been shown to induce tumor cell apoptosis and selectively inhibit growth of proliferating cell lines, including multi-drug resistant cell lines. In May 2009 EpiCept announced the completion of a Phase Ia study that determined crinobulin's maximum tolerated dose and provided evidence of clinical symptomatic activity and radiographic evidence of efficacy in end stage patients. The Company is making preparations to initiate a Phase Ib trial for the compound in combination with other chemotherapeutic agents.

Azixa - a compound discovered by EpiCept and licensed to Myriad Genetics, Inc. as part of an exclusive, worldwide development and commercialization agreement. Myriad Pharmaceuticals, Inc., a new public company formed from a spin off of the pharmaceutical assets of Myriad Genetics, is currently conducting Phase II trials for Azixa. Myriad has announced they intend to disclose the outcome of at least one of their ongoing Phase II Azixa trials at the November 2009 meeting of the American Association for Cancer Research (AACR). If successful these results could lead to Phase III registration trials for the compound, which would trigger a milestone payment to EpiCept.

Financial and Operating Highlights

General and Administrative Expense

General and administrative expense decreased by 23%, or $0.5 million, from $2.2 million in the second quarter of 2008 to $1.7 million in the second quarter of 2009. The decrease was primarily attributable to lower non-cash compensation and legal fees. General and administrative expense decreased by 22%, or $1.1 million from $4.8 million for the six months ended June 30, 2008 to $3.7 million for the six months ended June 30, 2009.

Research and Development Expense

Research and development (R&D) expense increased by 15%, or $0.5 million, from $3.3 million in the second quarter of 2008 to $3.8 million in the second quarter of 2009. During the second quarter of 2009, as a result of EpiCept's decision to close its facility in San Diego, the Company expensed $0.8 million related to the lease on this facility and $0.2 million in severance payments for the employees affected by the closing. R&D activity during the second quarter of 2009 was focused on the filing of the NDS in Canada, the initiation of an open-label trial of Ceplene® that will meet EpiCept's post-approval requirements with the EMEA and an anticipated NDA filing seeking marketing approval for Ceplene® in the U.S.