Noven Provides MethyPatch Development Update

NOVEN PROVIDES METHYPATCH^® DEVELOPMENT UPDATE

Additional Clinical Studies to Proceed as Planned

Miami, FL, June 16, 2004 -- Noven Pharmaceuticals, Inc. (Nasdaq: NOVN) today provided an update on the status of MethyPatch^®, Noven’s developmental methylphenidate transdermal system (MTS) for Attention Deficit Hyperactivity Disorder. Global rights to MTS were licensed in early 2003 to Shire Pharmaceuticals Group plc (Shire), the market-share leader in ADHD therapy.

Noven and Shire recently met with the U.S. Food & Drug Administration (FDA) to review a jointly prepared development plan intended to address issues raised in the FDA "not approvable" letter received in April 2003. The plan, submitted for FDA review in March 2004, included protocol summaries for possible additional clinical studies believed necessary to obtain approval.

Based on feedback received from the FDA at the meeting, Noven and Shire intend to proceed with the development of MTS. Development efforts are expected to include additional clinical work, including another Phase 3 study. Under agreements between the parties, Shire will manage these studies, and Noven will fund them.

"We are pleased with our meeting with the Agency," said Robert C. Strauss, Noven's President, CEO & Chairman, "and believe we have a well defined strategy with which to advance the development of MethyPatch."

Noven estimates that the additional studies will cost up to $13.0 million, and expects to incur additional costs in pursuit of MTS approval. These costs will be offset dollar-for-dollar against license revenues previously received from Shire and deferred, and will not impact Noven’s research and development expenses for 2004.

If the additional studies are successful and completed on schedule, the parties intend to file an amendment to the pending MTS New Drug Application during 2005. The amendment is expected to receive a six-month review by the FDA.

Under the agreements between the parties, Shire continues to have certain rights to terminate the MTS license, including if Shire determines that submission of the results of the additional clinical studies to the FDA would not result in approval of a commercially viable product. If Shire were to terminate on this basis, all product rights would be returned to Noven, and Noven would retain the $25 million previously paid by Shire in April 2003. Shire continues to have the right to require Noven to repurchase rights to MTS for $5 million under certain circumstances.

In a separate release issued today, Noven announced the signing of a new agreement with Shire relating to the development of an amphetamine patch for ADHD.

Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leading developer of advanced transdermal drug delivery technologies and prescription transdermal products. Noven’s prescription patches are sold in over 30 countries, and a range of new patches are being developed in collaboration with Novartis Pharma AG, Shire Pharmaceuticals Group plc, P&G Pharmaceuticals, Endo Pharmaceuticals Inc. and others. With the most advanced and broadly applicable transdermal technology in its class, Noven is committed to expanding the universe of available transdermal therapies for the benefit of patients, partners and shareholders. See www.noven.com for additional information.

Except for historical information contained herein, the matters discussed in this press release contain 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 that involve substantial risks and uncertainties. When used in this press release, the words “believe,” “intend,” “expects,” “will,” and similar expressions identify certain of such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein. These forward-looking statements are based largely on the current expectations of Noven and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond Noven’s control. These risks and uncertainties include: the risk that the FDA may determine that Noven’s protocols and/or clinical strategies are not acceptable or do not address the FDA's concerns regarding the approval of the MethyPatch product NDA; the risk that planned additional studies may not be commenced or completed in a timely manner due to an inability to enroll a sufficient number of subjects for the additional studies or otherwise, which could delay the filing of an amendment to the MethyPatch product NDA past 2005; the possibility that planned additional studies of MethyPatch will not produce results that support approval or that, even if the additional studies are completed and are successful, MethyPatch may not ultimately be approved or commercialized; uncertainties related to the FDA’s discretion to approve or not approve a product; the timing of FDA’s review of any amended NDA for MethyPatch as well as any product approval, which are outside Noven’s control and which may impact the success of product launch and market penetration; Shire’s control over the management of the planned additional MethyPatch product clinical trials, including the risk that Shire may elect to manage such studies differently than Noven might have, incorrectly or inadequately; the possibility that the additional studies may be more extensive, lengthier or more costly than anticipated and may exceed the total amount of license revenues available to offset such costs and expenses; any exercise of Shire’s right to terminate the agreement following its review of the results of the additional studies, including the risk that, in such event, Noven’s right to receive a $50 million approval milestone would terminate, and that Noven may be unable or unwilling to proceed with the project or may be unable to license MethyPatch to a third party or to a party with the resources of Shire on commercially reasonable terms; the possibility that Noven’s method of accounting for the $25 million received from Shire could change under certain circumstances, including if the parties' MethyPatch product strategy changes or if Noven’s MethyPatch product development is discontinued; the likelihood that Noven’s development strategy would change if Shire were to terminate the agreement under certain circumstances, or if Noven’s MethyPatch product were not ultimately approved or were abandoned; the possibility that Noven may be unsuccessful in achieving the milestone objectives under its agreement with Shire; and the risk that Shire may have different or conflicting priorities than Noven’s which may adversely impact the development and commercialization of MethyPatch. In addition to the risks and factors identified above, reference is also made to the other risks and factors detailed in reports filed by Noven with the Securities and Exchange Commission. Noven cautions that the foregoing list of factors is not exhaustive.

Contact:
Investor & Media Contact
Joseph C. Jones
Vice President – Corporate Affairs
Noven Pharmaceuticals, Inc.
(305) 253-1916

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