Novelos Therapeutics ’’Dirty Bomb’’ Treatment Proposal Approved by U.S. Government for Round 2 Evaluation

Government Expects to Announce Contract Awards in September 2006.

NEWTON, Mass. June 26, 2006 -- Novelos Therapeutics, Inc. (OTCBB: NVLT), a biotechnology company focused on the development of therapeutics to treat cancer and hepatitis, today announced that the Department of Health and Human Services (DHHS) determined that Novelos’ proposal for the use of NOV-002 to treat subjects that may develop Acute Radiation Syndrome (ARS) after exposure to high levels of penetrating radiation is within the competitive range for discussion and further evaluation. According to DHHS, the competitive range consists of all the most highly rated proposals.


“I am very pleased that the Government has favorably completed initial review of Novelos’ proposal and determined that NOV-002 is competitive for possible addition to our country’s Strategic National Defense Stockpile (SNS) to treat the effects of ARS,” said Harry Palmin, President and CEO of Novelos. “NOV-002 is currently in Phase 3 development for non-small cell lung cancer, in combination with chemotherapy, under a special protocol assessment. NOV-002 has a proven clinical safety record, is easy to manufacture, low-cost, has a very stable shelf life, and has shown pharmacologic efficacy in animal models exposed to lethal radiation.”

In nonclinical experiments conducted in the Russian Federation by the Russian Ministry of Defense, groups of mice and rats were exposed to lethal levels of radiation. Treatment of animals with NOV-002 (after exposure to radiation) resulted in a two- to three-fold increase in thirty day survival compared to the irradiated but untreated control animals. NOV-002 treated animals did not experience severe neutropenia (loss of white blood cells used for fighting off infections) and demonstrated significantly higher bone marrow cell counts than the control (bone marrow is the source of white blood cells). NOV-002 is marketed in the Russian Federation as Glutoxim(R) where it is already approved for use in adults as a preventive and therapeutic agent in secondary immune deficiency associated with exposure to high levels of penetrating radiation.

“Animal studies have demonstrated that NOV-002 stimulates production of hematopoietic cytokines and growth factors, a mechanism which could account for both the hematologic recovery seen when NOV-002 is administered in conjunction with cancer chemotherapy and that seen after treatment of radiation injury,” said Christopher Pazoles, Ph.D., Vice President of Research & Development of Novelos.

In December 2005, DHHS issued a Request for Proposal (RFP #DHHS-ORDC-DDA-05-12) for Medical Countermeasures to Mitigate or Treat Neutropenia Alone or in Combination with Co-Morbidities Associated with ARS. In February 2006, Novelos submitted its proposal. This summer, Novelos and DHHS will enter the negotiation phase of this procurement process where any outstanding issues regarding the proposal will be addressed. DHHS estimates that contract awards in this program will be made in September of 2006. DHHS’ current procurement plans are for up to 100,000 treatment courses of medical countermeasures, with procurement of an additional 100,000 courses anticipated at a later date. Multiple contract awards may be made with a 20,000 course minimum procurement.

About Novelos Therapeutics, Inc.

Novelos Therapeutics, Inc. is a biotechnology company commercializing oxidized glutathione-based compounds for the treatment of cancer and hepatitis. NOV-002, the lead compound currently in Phase 3 development for lung cancer under a SPA, is designed to act together with chemotherapy as a chemoprotectant and an immunomodulator. NOV-002 is in Phase 2 development for chemotherapy-resistant ovarian cancer and is also being developed for acute radiation injury. NOV-205, a second compound, is designed to act as a hepatoprotective agent with immunomodulating and anti-inflammatory properties. Novelos plans to initiate a U.S.-based NOV-205 clinical trial, under an IND, for chronic hepatitis C mid-2006. Both compounds have completed clinical trials in humans and have been approved for use in the Russian Federation where they were originally developed. For additional information about Novelos please visit www.novelos.com.

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This news release contains forward-looking statements. Such statements are valid only as of today, and we disclaim any obligation to update this information. These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made. These statements are based on our current beliefs and expectations as to such future outcomes. Drug discovery and development involve a high degree of risk. Factors that might cause such a material difference include, among others, uncertainties related to the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, the completion of clinical trials, the FDA review process and other government regulation, our pharmaceutical collaborators’ ability to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, product pricing and third-party reimbursement.

Contact Information

Harry S. Palmin

President and CEO

Novelos Therapeutics, Inc.

Contact via E-mail