Noven Provides Methypatch® Development Update

Protocol for Additional MethyPatch Study Submitted to FDA

Noven and Shire Sign Letter Agreement

MethyPatch License Revenues Expected to Offset Noven's Clinical Costs

-- Noven Pharmaceuticals, Inc. (NASDAQ: NOVN) today provided an update on the status of MethyPatch®, its developmental methylphenidate transdermal system for Attention Deficit Hyperactivity Disorder (ADHD).

Submission of Protocol
MethyPatch is licensed to Shire Pharmaceuticals Group plc (Shire). In the second quarter of 2003, Noven received notification from the U.S. Food and Drug Administration (FDA) that its pending New Drug Application (NDA) for MethyPatch was not approvable. "Since receiving the not approvable letter, Noven and Shire have met with the FDA and have worked together on strategies to advance MethyPatch toward approval," said Robert C. Strauss, Noven’s President, CEO & Chairman. “Noven and Shire have developed a draft protocol for an additional clinical study that we believe is necessary to amend the NDA, and we recently submitted the protocol to the FDA for review and comment," said Strauss. "We are hopeful that the FDA will agree with the study design and our clinical strategy, so that the additional study may proceed as planned."

Letter Agreement
As this new stage of MethyPatch development begins, Noven and Shire have signed a letter agreement defining certain rights and obligations of the parties. Shire has agreed to supervise and manage the additional study, and Noven has agreed to reimburse Shire for out-of-pocket expenses paid in connection with the study (up to a maximum of $10.9 million) and to provide clinical supplies of the product. Noven may also incur additional expenses in pursuit of approval. After reviewing results from the additional study, Shire will have the right to terminate the parties’ original agreement if it determines that submission of the results to 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 paid by Shire in April 2003 at the closing of the license transaction. Under the original agreement, Shire continues to have the right to require Noven to repurchase rights to MethyPatch for $5 million under certain circumstances.

Recognition of License Revenue
"With an additional study awaiting FDA endorsement, we expect to begin offsetting MethyPatch clinical expenses dollar-for-dollar against a portion of the $25 million previously received from Shire," said Diane M. Barrett, Noven's Chief Financial Officer. "Accordingly, our results of operations are not expected to reflect ongoing expenses incurred in pursuit of MethyPatch approval."

"As previously disclosed, $5 million of the $25 million closing payment was deferred and is expected to be recognized as license revenues over time beginning when Shire's right to require us to repurchase MethyPatch expires," said Barrett.

"The remaining $20 million was deferred and was expected to be recognized as license revenues over 10 years. Beginning with the third quarter, however, we ceased amortization of the unamortized balance of the $20 million due to the ongoing expense expected to be incurred in pursuit of MethyPatch approval," said Barrett. “Accordingly, we expect to offset ongoing expenses incurred in pursuit of approval – including the cost of the additional study – against that balance."

About Noven
Noven Pharmaceuticals, Inc., headquartered in Miami, Florida, is a leading developer of advanced transdermal drug delivery technologies and prescription transdermal products. Together with Novartis, Noven owns a 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, Noven is committed to becoming the world’s premier transdermal drug delivery company. For additional information on Noven, visit www.noven.com.

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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve substantial risks and uncertainties. When used in this press release, the words “hope,” “believes,” “may,” “would,” “expect,” “plan” 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 Pharmaceuticals, Inc. (the “Company”) and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control, including but not limited to risks and uncertainties associated with: economic, competitive, regulatory and other factors affecting the Company and its operations, markets, products and services; the results of FDA’s review of the MethyPatch protocol, including the risk that FDA may determine that the protocol and/or proposed clinical strategy are not acceptable or do not address FDA’s concerns regarding approval of the MethyPatch NDA; the possibility that the additional study may not be commenced in a timely manner or at all due to FDA concerns or otherwise; any exercise of Shire’s right to terminate the agreement following its review of the results of the additional study, 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 the study will not produce results that support approval or that, even if the study is completed and is successful, MethyPatch may not ultimately be approved or commercialized; the possibility that the cost of the additional study and related expenses may be higher than anticipated and may exceed the total amount of license revenues available to offset such costs and expenses; the possibility that the method of accounting for the $25 million received from Shire could change under certain circumstances, including if the parties’ MethyPatch development strategy changes, or if Shire were to terminate the agreement under certain circumstances, or if MethyPatch was not ultimately approved or was abandoned; and the Company’s success at managing the risks relating to the foregoing. In addition to the risks and factors identified above, reference is also made to the other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission. The Company 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