Plans to Initiate a Longer Proof-of-Concept Trial in 2nd Half of 2008

Novelos Therapeutics, Inc. (OTCBB: NVLT - News), a biopharmaceutical company focused on the development of therapeutics to treat cancer and hepatitis, today announced that it has concluded the initial U.S.-based double-blind, placebo-controlled Phase 1b trial evaluating NOV-205 as monotherapy in chronic hepatitis C genotype 1 patients who previously failed treatment with pegylated interferon plus ribavirin. Based on favorable safety data in this 14-dose trial with 18 subjects (12 treated with NOV-205 and 6 with placebo), Novelos plans to initiate a longer proof-of-concept trial in hepatitis C non-responders in the second half of 2008.

NOV-205 acts as a hepatoprotective agent with immunomodulating and anti-inflammatory properties and, as such, likely requires dosing longer than 14 days to observe a clinical response. Its regulatory approval in the Russian Federation was based on a longer duration of dosing in treatment naïve hepatitis B and C patients (48 daily doses in the case of chronic disease) in which serum viral RNA levels were greatly reduced and serum biochemical markers of liver damage were significantly improved or normalized. NOV-205 was also well-tolerated in those studies. The next U.S.-based trial will aim to expand the safety database for NOV-205 and begin to assess its effects on similar efficacy-related endpoints that showed improvement in the Russian studies, although the trial will be conducted in a more difficult to treat hepatitis C non-responder population.

“We believe that the safety data from the Phase 1b trial support the initiation of a treatment regimen with NOV-205 that is more likely to result in demonstrable clinical activity as NOV-205 is not a direct anti-viral agent,” said Dr. Raymond Koff, Novelos’ expert Medical Advisor for hepatitis. “We look forward to evaluating NOV-205’s single agent activity in an extended dosing setting in chronic hepatitis C non-responders – a large patient population for which there is no established, beneficial therapy.”

The World Health Organization estimates that chronic hepatitis C affects 170 million people worldwide and up to four million people are newly infected each year. Chronic infection can progress to cirrhosis, end-stage liver disease and hepatocellular carcinoma. While there are varying estimates about the size of the global market for hepatitis C drugs, according to Nature Reviews Drug Discovery the current global market is believed to be in excess of $3 billion per year, growing to more than $8 billion by 2010. In the U.S., according to the Centers for Disease Control and Prevention, an estimated 3.9 million persons are infected with hepatitis C, and 2.7 million persons in the U.S. are chronically infected. Hepatitis C accounts for approximately 30,000 new infections and 8,000-10,000 deaths each year in the U.S.

The current standard-of-care drugs for chronic hepatitis C – the combination of pegylated interferon and ribavirin – are expensive, have significant toxicities, are difficult to tolerate for many patients and have limited long-term efficacy in genotype 1 patients (the most common HCV genotype seen in the U.S. and much of the world). Approximately 50% of the genotype 1 patients do not benefit from treatment with pegylated interferon plus ribavirin, and currently there is no approved standard of care to treat these non-responding chronic hepatitis C patients.

About Novelos Therapeutics, Inc.

Novelos Therapeutics, Inc. is a biopharmaceutical 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 and Fast Track, acts together with chemotherapy as a chemoprotectant and an immunomodulator. NOV-002 is also in Phase 2 development for chemotherapy-resistant ovarian cancer and early-stage breast cancer, and is in addition being developed for acute radiation injury. NOV-205 acts as a hepatoprotective agent with immunomodulating and anti-inflammatory properties. NOV-205 is in Phase 1b development for chronic hepatitis C non-responders. 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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