Noven Reports Third Quarter Earnings Per Share of $0.10

Nine-Month Pre-Tax Income Increases 38% to $12.9 Million

Novogyne Quarterly Profit Contribution Nearly Doubles to $5.3 Million

-- Noven Pharmaceuticals, Inc. (NASDAQ: NOVN), today announced financial results for the quarter and nine-month period ended September 30, 2001.

2001 Third Quarter Noven reported net income of $2.5 million ($0.10 diluted earnings per share) for the third quarter of 2001 (the "current quarter"), compared to $3.6 million ($0.15 diluted earnings per share) for the third quarter of 2000 (the "2000 quarter'"). Income before income taxes for the current quarter was $4.0 million, compared to $3.9 million for the 2000 quarter. Current quarter revenues were $10.4 million, compared to $11.2 million for the 2000 quarter. Noven's provision for income taxes in the current quarter increased $1.3 million over the 2000 quarter, as Noven's income became fully taxable in 2001 for the first time. In the current quarter, Noven recognized $5.3 million in earnings from Novogyne Pharmaceuticals, Noven's joint venture with Novartis Pharmaceuticals Corporation, East Hanover, New Jersey ("Novartis"), compared to $2.7 million in the 2000 quarter.

Novogyne's current quarter net revenues more than doubled to $28.5 million from $13.5 million due to increased sales of Vivelle-Dot™ and the addition of CombiPatch® in March 2001. Novogyne's selling, general and administrative expenses increased to $9.7 million for the current quarter from $5.1 million in the 2000 quarter, primarily due to the relaunch of CombiPatch and expansion of the Novogyne sales force. Novogyne amortized $1.5 million of CombiPatch acquisition cost during the current quarter. Novogyne's net income for the current quarter was $12.0 million, an 85% increase over the $6.5 million reported in the 2000 quarter.

2001 First Nine Months
Noven reported net income of $8.3 million ($0.35 diluted earnings per share) for the first nine months of 2001 (the "current period"), compared to $8.9 million ($0.39 diluted earnings per share) for the first nine months of 2000 (the "2000 period"). Income before income taxes was $12.9 million, compared to $9.4 million for the 2000 period. Current period revenues were $35.7 million, compared to $31.2 million for the same period in 2000. Noven's provision for income taxes for the current period increased $4.1 million over the 2000 period.

In the current period, Noven recognized $9.0 million in earnings from Novogyne, compared to $6.4 million in the 2000 period, an increase of 41%. In the current period, Novogyne net revenues increased to $63.2 million from $42.6 million in the 2000 period, an increase of 48%. Novogyne's selling, general and administrative expenses increased to $22.9 million from $14.6 million in the 2000 period, primarily due to the CombiPatch relaunch and the Novogyne sales force expansion. Novogyne amortized $3.1 million of CombiPatch acquisition cost during the current period. Current period net income at Novogyne increased to $26.6 million from $22.0 million in the 2000 period.

Business Update & Forecast
"The third quarter was marked by strong growth at Novogyne, progress regarding our international products licensed to Novartis Pharma AG, Basel, Switzerland ("Novartis Pharma"), and advances in the development of new products intended to increase the base of revenues that we control," said Robert C. Strauss, Noven's President, CEO and Chairman.

U.S. Business - Novogyne
"Novogyne Pharmaceuticals, our highly profitable women's health company jointly owned with Novartis, continues to be Noven's principal growth driver. In September, the Vivelle® family of transdermal estrogen patches held a 32.1% share of the U.S. transdermal estrogen market, an increase of about 4% in the last 12 months." The Vivelle family is led by Vivelle-Dot, the smallest estrogen patch in the world. An application seeking a new low-dose and an osteoporosis indication for Vivelle-Dot is pending at the Food & Drug Administration.

Strauss continued: "With the relaunch of CombiPatch in May of this year, Novogyne became the only company in the U.S. offering transdermal therapies for both the estrogen-only and combination hormone replacement therapy ("HRT") markets. During the 12 months leading up to the relaunch, CombiPatch's share of the total prescription market had declined slightly. Since relaunch, its market share has stabilized, but we have not seen a meaningful increase. The Novogyne sales force continues to deliver the CombiPatch message to its customers, and we anticipate growth for the product in 2002 and beyond as that message takes hold."

International Business
"In August, we announced that orders for our international products had been substantially less than we expected, and that we would be working with Novartis Pharma to accelerate product roll-out. To this end, senior representatives from both companies have held cooperative and productive sessions in Basel, in Miami, and by telephone conference. We remain in near-daily contact, from the country product manager level to senior Novartis Pharma executives."

"Novartis Pharma has taken steps that confirm its commitment to HRT and to Noven's products," said Strauss. "Last month, they expanded internal resources to strengthen global HRT marketing. In the third quarter, they launched Estradot in Canada. They have moved Estradot® through to the concluding stages of the European mutual recognition procedure. In addition, senior management has assured us that planning for 2002 Estradot launches is a priority project, and Noven is working side-by-side with Novartis Pharma to develop an effective, aggressive launch plan for Estradot."

"Ever since Novartis Pharma first licensed the product, we have been hopeful that they would rapidly convert their existing transdermal estrogen business to Estradot. We know that active conversion is an option under consideration in the launch planning process, and we are doing everything possible to influence the outcome. We must recognize the fact that, without broad conversion, launches may not be as robust or rapid as we would like. At this time, we understand that Novartis Pharma has not reached a decision on conversion strategy or timing," said Strauss.

"Estalis orders by Novartis Pharma in the second half of 2001 have been much lower than in the first half, and forecasted orders for 2002 are lower than 2001. Novartis Pharma has advised that its inventory levels for Estalis are high. We also understand that Novartis Pharma plans to seek approval of a second Estalis dosage strength in European countries where only one strength is presently approved, and that they have initiated a supporting clinical study. We do not expect renewed growth in our sales of Estalis until the second dosage is approved."

MethyPatch® Update
"The delays in commercialization of our international products by our licensee reinforce the need to develop and market products ourselves," said Strauss. "Once-daily MethyPatch®, our transdermal methylphenidate system for Attention Deficit Hyperactivity Disorder, is central to this strategy. Recently, we completed investigator training and began patient screening for a multi-center double-blind placebo-controlled trial scheduled to conclude in the 2002 first quarter. A successful trial would lead to a MethyPatch New Drug Application in mid-2002 and ultimately a new, Noven-controlled revenue source beginning in late 2003."

Financial Guidance
"We expect 2001 fourth quarter revenues to be in line with the quarter that we just completed," said Strauss. "Fourth quarter diluted earnings per share should be in the $0.10 to $0.12 range. Pre-tax income for full year 2001 is expected to increase in the 40% range compared to 2000. We expect to earn $0.45 to $0.47 per share for full-year 2001, which represents an increase over our prior full year guidance of $0.40 to $0.45 per share. This increase is largely due to lower than planned expenses in the 2001 fourth quarter."

Strauss continued: "As indicated, we have seen a significant decline in Estalis orders, and we expect that decline to continue at least through 2002. Estradot orders in 2002 are expected to be insufficient to offset Estalis declines. As a result, we expect our international sales to decline substantially in 2002 compared to 2001. Noven's target for 2002 calls for sales growth in Vivelle-Dot and CombiPatch sufficient to offset this international decline. If met, we would expect 2002 revenues to be comparable with 2001 full-year revenues, and 2002 diluted earnings per share to be in the $0.45 to $0.55 range."

"For the balance of this year and into 2002, we will be working diligently to enhance U.S. growth, to accelerate launches abroad, to advance new products that we can market ourselves, and to resume our high growth rate. We are committed to success on each of these fronts."

Analyst Conference Call
A public telephone conference with management relating to Noven's financial results will be broadcast live via the Internet at beginning at 5:00 p.m. Eastern time this afternoon, November 1. Thereafter, a rebroadcast of the call will be accessible at the same website. A taped replay of the conference call will be available by telephone from November 1 at 9:00 p.m. Eastern time until the evening of November 3 or by calling 800-475-6701 (from within the U.S.) or 320-365-3844 (from outside the U.S.) and entering the access code 607357. This conference call will contain forward-looking information in addition to that contained in this press release. About Noven Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leader in the development of transdermal and transmucosal drug delivery technologies and products. Together with Novartis Pharmaceuticals Corporation, Noven owns a highly profitable women's health products company called Novogyne Pharmaceuticals. Noven's existing products include advanced estrogen transdermal delivery systems (including Vivelle-Dot™, licensed to Novogyne, and Estradot®, licensed to Novartis Pharma AG) and combination estrogen/progestin transdermal delivery systems (including CombiPatch®, licensed to Novogyne, and Estalis, licensed to Novartis Pharma AG). With a range of additional products in development, including MethyPatch®, Noven is committed to becoming the world's premier developer, manufacturer and marketer of transdermal and transmucosal drug delivery systems. For additional information on Noven, visit

Forward looking statements contained in this release are qualified by and subject to the risks and uncertainties specified in Noven's most recent filings with the Securities and Exchange Commission, including the risk that results for future periods may be materially different than anticipated because of, among other factors: competitive market conditions affecting Noven's hormone replacement patches and other products; the inability to develop new products; the failure of Novartis Pharma to launch and support Estalis due to inventory levels, regulatory strategies or other factors; delays in the launch of Estradot abroad due to the failure of Novartis Pharma to receive regulatory approvals, uncertainty regarding Novartis Pharma's conversion strategy or other factors; lower than expected orders of Estalis and/or Estradot by Novartis Pharma; the failure of Novogyne to successfully commercialize CombiPatch; fluctuations in research and development, sales and marketing and other expenses; the failure of MethyPatch® or other clinical studies; delays in filing a MethyPatch New Drug Application; and the inability of Noven to receive FDA approval to market MethyPatch or its developmental HRT patches and/or to successfully commercialize such products.

                      Noven Pharmaceuticals, Inc.

Statements of
 Operations Data:          Three Months Ended      Nine Months Ended
(amounts in                   September 30,          September 30,
thousands, except            2001        2000       2001       2000
per share amounts)      (Unaudited) (Unaudited)(Unaudited)(Unaudited)
                         ---------   ---------  ---------  ---------

  Product sales           $  9,705    $ 11,016   $ 33,569   $ 30,807
  License revenue              698         147      2,117        440
                         ---------   ---------  ---------  ---------
    Total revenues          10,403      11,163     35,686     31,247

  Cost of products
    sold                     4,982       4,928     15,692     13,951
  Research and
    development              3,716       3,307      8,353      8,687
  Marketing, general
   and administrative        3,383       1,980      9,219      6,369
                         ---------   ---------  ---------  ---------
    Total  expenses         12,081      10,215     33,264     29,007
                         ---------   ---------  ---------  ---------
Income (loss) from
  operations                (1,678)        948      2,422      2,240

Equity in earnings
  of Novogyne                5,278       2,653      9,010      6,383
Interest income, net           398         306      1,499        773
                         ---------   ---------  ---------  ---------
Income before income
  taxes                      3,998       3,907     12,931      9,396

Provision for income
  taxes                      1,542         282      4,585        470
                         ---------   ---------  ---------  ---------
Net income                $  2,456    $  3,625   $  8,346   $  8,926
                         =========   =========  =========  =========
Basic earnings per
  share                   $   0.11    $   0.16   $   0.37   $   0.41
                         =========   =========  =========  =========
Diluted earnings per
  share                   $   0.10    $   0.15   $   0.35   $   0.39
                         =========   =========  =========  =========

Weighted average
  number of common
  shares outstanding:
  Basic                     22,427      22,042     22,334     21,841
                         =========   =========  =========  =========
  Diluted                   23,542      23,586     23,571     23,104
                         =========   =========  =========  =========

                                                   As Of
                                       September 30,    December 31,
Balance Sheet Data:                        2001              2000
                                       ------------     ------------
Cash and cash
  equivalents                              $ 47,070         $ 40,976

Working capital                            $ 46,686         $ 46,697

Investment in
  Novogyne                                 $ 27,041         $ 15,431

Total assets                               $140,215         $104,031

Deferred license
  revenue                                  $ 28,492         $ 27,109

  equity                                   $ 77,439         $ 65,277

Investor & Media Contact:
Joseph C. Jones
Vice President – Corporate Affairs
Noven Pharmaceuticals, Inc.