NeoPharm Announces LEP-ETU Project Update

-- Bioequivalency Study Meets Endpoint

-- Development For NDA Submission via 505(b)(2) Pathway Planned

NeoPharm, Inc. (Nasdaq:NEOL) today announced that, based on theresults of its recently completed bioequivalence study, the Company'sNeoLipid(R) drug candidate LEP-ETU (Liposome Entrapped Paclitaxel"Easy to Use") has met the study criteria, established by FDA, fordemonstrating bioequivalence. LEP-ETU is NeoPharm's easy-to-useliposomal formulation of paclitaxel (Taxol(R)), which is a widely-usedand approved treatment for advanced cancers, including ovarian,breast, and lung cancer. Based on this initial bioequivalence study,NeoPharm is accelerating the clinical program of LEP-ETU to supportsubmission to FDA of a 505(b)(2) New Drug Application (NDA) formarketing approval.

The Company is currently preparing to submit an abstract inDecember of the bioequivalence study data to the American Society ofClinical Oncology (ASCO) for consideration for the program of the 2006ASCO Annual Meeting in Atlanta, Georgia, June 2-6, 2006.

"We are pleased that our LEP-ETU drug candidate has demonstratedbioequivalence to Taxol," said Ronald G. Eidell, NeoPharm's Presidentand Chief Executive Officer. "According to written guidance providedby the FDA, after completion of a 100-patient comparator study, we maybe able to file an NDA for LEP-ETU as early as the fourth quarter of2007."

Under the 505(b)(2) pathway, and guidance from the FDA on LEP-ETU,in addition to the bioequivalence study, the Company will need toinitiate a 100-patient comparator study in metastatic breast cancer.The Company estimates the 100-patient comparator study, in which 50patients would receive LEP-ETU and 50 patients would receive Taxol,will take approximately eight to ten months to enroll with a six-monthtreatment period. The Company is finalizing preparations for such astudy to expedite patient enrollment, and currently expects tocommence enrollment in the first quarter of 2006.

The rationale for developing a liposomal formulation of paclitaxelis to attempt to improve the safety profile of paclitaxel byeliminating the drug formulation component polyoxyethylated castor oil(Cremophor(R) EL), which is associated with toxicities, whilemaintaining or enhancing efficacy.

In addition to the LEP-ETU comparator study, a Phase II study foranother of the Company's NeoLipid drug candidates, LE-SN38 forcolorectal cancer, is being planned with the Cancer and Leukemia GroupB (CALGB), an NCI funded clinical study group, with protocolsubmission and acceptance to NCI CTEP and FDA, currently anticipatedin the fourth quarter of this year.

About LEP-ETU

LEP-ETU is the Company's NeoLipid(R) liposomal formulation of thewidely used cancer drug, paclitaxel. Paclitaxel has been approved inthe U.S. as Taxol. Common side effects of this approved anticanceragent include nausea, vomiting, hair loss, and nerve and muscle pain.In addition, Taxol cannot be introduced into the body unless it isfirst formulated in a mixture of castor oil (Cremophor(R) EL) andethanol, which can lead to another set of debilitating side effectsincluding hypersensitivity reactions. NeoLipid(R) technologyeliminates the need for Cremophor. As a result, LEP-ETU may overcomemany of the current limitations of Taxol treatment for cancer patientsand may limit the adverse side effects.

About NeoPharm, Inc.

NeoPharm, Inc., based in Lake Forest, Illinois, is a publiclytraded biopharmaceutical company dedicated to the research,development and commercialization of new and innovative cancer drugsfor therapeutic applications. The Company has a portfolio of cancercompounds in various stages of development. Additional information canbe obtained by visiting NeoPharm's Website at www.neophrm.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 toLEP-ETU and LE-SN38, future patient enrollment in the Company'sLEP-ETU comparator study, or LE-SN38 clinical study, and any otherstatements that are not historical facts. Such statements involverisks and uncertainties, including, but not limited to, those risksand uncertainties relating to difficulties or delays in financing,development, testing, obtaining regulatory approval, production andmarketing of the Company's drug and non-drug compounds, including, butnot limited to, LEP-ETU and 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, LEP-ETU andLE-SN38 that could slow or prevent products coming to market,uncertainty regarding the Company's ability to market its drug andnon-drug products, including, but not limited to, LEP-ETU and LE-SN38,the uncertainty of patent protection for the Company's intellectualproperty or trade secrets, including, but not limited to, LEP-ETU andLE-SN38, and other risks detailed from time to time in filings theCompany makes with the Securities and Exchange Commission includingits annual reports on Form 10-K and quarterly reports on Forms 10-Q.Such statements are based on management's current expectations, butactual results may differ materially due to various factors, includingthose risks and uncertainties mentioned or referred to in this pressrelease. Accordingly, you should not rely on these forward-lookingstatements as a prediction of actual future results.