June 12, 2006– Gaithersburg, Maryland – Panacea Pharmaceuticals, Inc., a company focused on developing therapeutic and diagnostic products for cancer, announced today that it has closed its Series D Private Placement raising $8.9 million. Participants in the round included Konishi Hiroshi; Kenso Kogyo Co., Ltd.; Kyokuto Securities Co., Ltd.; Medikit Co., Ltd.; Mizuho Capital Co., Ltd.; Nomura Research & Advisory Co., Ltd.; Shin Nihon Jitsugyo Co., Ltd.; and SOFTBANK INVESTMENT CORPORATION.

Proceeds from the offering will be used to move potential diagnostic and therapeutic products within the Company’s HAAH Oncology Program towards clinical-stage development, as well as strengthen the Company’s pipeline.

“Our HAAH cancer program is poised to enter several clinical studies during 2006. Therefore, we welcome the excellent new investors and their commitment to the long-term support of Panacea and its programs,” stated Hossein A. Ghanbari, PhD, CEO and Chief Scientific Officer of the Company.

Background on HAAH Oncology Program

The Company’s HAAH Oncology Program is based on the enzyme human aspartyl (asparaginyl) beta-hydroxylase (HAAH). HAAH over-expression has been detected in primary tumor tissue of more than twenty tumor types tested to date, including cancers of the pancreas, breast, ovary, liver, colon, prostate, lung, brain, and bile duct. HAAH over-expression has been detected in 99% of tumor specimens (greater than 1000) tested to date and has not been detected in normal or adjacent non-affected tissue.

Preclinical studies have indicated that over-expression of HAAH is sufficient to induce cellular transformation, to increase cell motility and invasiveness, and to establish tumor formation in animals. The HAAH protein is expressed on the surface of cancer cells and in the periphery of tumors facilitating an antibody-based treatment approach. In in vitro studies, anti-HAAH antibodies have been shown to have a beneficial effect on tumor cells, causing them to revert to a more normal phenotype as measured by the inhibition of growth, motility, and invasiveness. Besides their direct biological effect the antibodies are internalized after binding to HAAH and may be used to specifically deliver cytotoxic agents to tumor cells. Recent studies have investigated the efficacy of anti-HAAH antibodies in vivo and have indicated that the murine forms of these antibodies are capable of inhibiting tumor formation and growth in a xenograft model of primary human liver cancer. Furthermore these antibodies significantly reduced the number and size of metastases in an animal model of human colon cancer metastasis to the liver.

The Company is actively pursuing the development of anti-HAAH antibodies as novel agents for the treatment of cancer, with liver cancer as its first intended indication. Recently the Company has engineered high affinity, fully human anti-HAAH antibodies which display properties in vitro equivalent to their murine counterparts. These fully human anti-HAAH antibodies are expected to be the final drug product. The Company is exploring the utility of both naked anti-HAAH antibodies, as well as antibody conjugates with various chemotherapeutic agents as lead candidates in this regard.

The Company also maintains an active diagnostic development program based on anti-HAAH antibodies. The Company has developed a simple blood test to detect the presence of HAAH in the patient sera. This assay has been demonstrated to display an exquisite sensitivity and specificity for cancer and has great potential utility in the diagnosis and management of disease. The company is poised to initiate clinical trials of this assay for the screening of individuals at high risk for prostate as well as for liver cancers.

The confluence of our HAAH-based diagnostic and therapeutic programs presents a fully integrated approach to cancer treatment and management (companion diagnostics or theranostics).

About Panacea Pharmaceuticals, Inc.

Panacea Pharmaceuticals, Inc. is an emerging biopharmaceutical company focused on using functional genomics and proteomics to develop therapeutics and diagnostics for diseases with substantial unmet clinical need. The Company’s product development focus is on novel proteins and biochemical pathways related to cellular regulation and cell cycle abnormalities in oncology as well as both acute and chronic neurodegenerative conditions such as hypoxia-induced cognitive impairment, Parkinson’s disease, and Alzheimer’s disease.

More information about the Company is available at http://www.PanaceaPharma.com.

Except for historical information presented in this press release, matters discussed herein may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the opinions and estimates of management only as of the date of this release and are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance, or achievements expressed or implied by such statements. Factors that might cause such a difference include, but are not limited to, uncertainties related to our access to capital, the progress, costs, and results of any clinical trials undertaken by us, progress of our research and development projects, and uncertainties related to whether our product candidates would ultimately achieve commercial success. We do not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events, or otherwise unless required by law.