June 28, 2006– Gaithersburg, Maryland – Panacea Pharmaceuticals, Inc. today announced the appointment of Stephen N. Keith, MD, MSPH as President and Chief Operating Officer. Dr. Keith will have responsibility for directing the company’s therapeutic product development efforts for cancer and stroke, clinical development process for cancer diagnostics, as well as launching the cancer diagnostic laboratory services.

“We are very pleased to add Stephen to the team at Panacea,” commented Hossein Ghanbari, PhD, Chairman, CEO and Chief Scientific Officer at Panacea Pharmaceuticals. “He brings a broad and valuable set of experiences to Panacea, including capital fund raising, clinical development, product commercialization in the U.S. and foreign markets, regulatory affairs and business development. Most importantly, Stephen has demonstrated exceptional leadership in building life science companies.”

Prior to joining Panacea, Dr. Keith was a Senior Consultant with the Biologics Consulting Group and a Managing Director with Glocap Advisors LLC, a boutique investment bank. He was a General Partner with Emerging Technology Partners, an early-stage life sciences venture capital firm, from 2002 to 2003. Dr. Keith has held a range of senior management positions in the pharmaceutical and biotechnology industries. Just prior to joining ETP, he held the position of President and Chief Operating Officer of Antex Biologics, Inc. From 1995 to 2000, Dr. Keith served as Vice President, Marketing and Sales at North American Vaccine, Inc. From 1990 to 1995, Dr. Keith held various positions at Merck & Co., Inc. including Senior Director, Health Care Delivery Policy in Corporate Public Affairs; Senior Customer Manager in the U.S. Human Health Division; and Senior Director, Health Strategies, in the Merck-Medco Managed Care Division.

Dr. Keith received the M.D. degree from the University of Illinois in 1977 and completed a three-year residency in Pediatrics at the University of California, Los Angeles in 1980. From 1980 to 1982, he was a Robert Wood Johnson Foundation Clinical Scholar at UCLA, during which time he received a Masters in Science in Public Health. From 1982 to 1987, Dr. Keith served on the faculty of the Charles Drew Medical School and the UCLA School of Medicine in the Department of Pediatrics. From 1987 to 1990, he served as a Health Policy Advisor to the U.S. Senate Committee on Labor and Human Resources under Senator Edward M. Kennedy. Dr. Keith is a Fellow of the Academy of Pediatrics and a Diplomate of the American Board of Pediatrics.

“I am excited to join Panacea and to work with Dr. Ghanbari, the Board of Directors, and the Company’s research and development staff to advance our products toward commercialization,” commented Dr. Keith. “Panacea’s therapeutic and diagnostic cancer products have strong potential to significantly improve outcomes among individuals with a broad range of cancers, including liver, prostate and breast cancer, along with leukemias affecting children and adults. And our lead neuroprotectant product candidate, PAN-811, could represent a breakthrough in reducing paralysis, memory loss and other devastating consequences of ischemic stroke.”

About Panacea’s Oncology Platform
Panacea is pursuing the development of antibodies directed against human aspartyl (asparaginyl) Beta-hydroxylase (HAAH) as novel agents for the treatment of cancer with liver cancer as its first intended indication. The Company is exploring both naked anti-HAAH antibodies, as well as antibody conjugates with various chemotherapeutic agents as lead candidates. Panacea is also pursuing the development of diagnostic products based on anti-HAAH antibodies. A proprietary blood-based assay has shown high sensitivity and specificity in the detection of a range of cancers and responsiveness to chemotherapy, thus facilitating the diagnosis and therapeutic management of disease. Initial targets for the HAAH diagnostic products include prostate and liver cancers, along with tests to determine responsiveness to a current therapy of choice in patients with chronic myelogenous leukemia. Panacea anticipates the initiation of its diagnostic testing services later in 2006.

About PAN-811
PAN-811 is a small-molecule that fully blocks hypoxic and ischemic neuronal cell death at a dose of 1 micromolar in vitro and reduces infarct volume by up to 59% in the middle cerebral artery occlusion rat model of stroke. It manifests dual mechanistic functions including both Ca2+-chelation and free radical-scavenging (Jiang, Z-G., et al., “A multifunctional cytoprotective agent that reduces neurodegeneration after ischemia,” PNAS, Vol. 103, No. 5, 1581-1586, 2006). The toxicology and pharmacokinetics of the drug candidate have been demonstrated, and it is currently in Phase II clinical trials at the NIH for a cancer indication. Panacea expects to begin in 2007 a Phase Ib human clinical trial to assess PAN-811 as a treatment for transient ischemic stroke.

About Panacea Pharmaceuticals, Inc.
Panacea Pharmaceuticals, Inc. is a privately-held biopharmaceutical company focused on the development and commercialization of therapeutics and diagnostics for diseases with substantial, unmet clinical needs. The Company’s product development strategy is based on novel therapeutic agents and approaches for cancer treatment, as well as acute and chronic neurodegenerative conditions, such as hypoxia-induced neurological insult, Parkinson’s Disease, and Alzheimer’s disease. Panacea has an extensive patent portfolio covering its neurodegenerative and oncology technologies.

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.