September 11, 2006– Gaithersburg, Maryland – Panacea Pharmaceuticals, Inc. today has launched its CLIA compliant diagnostic testing laboratory, Panacea Laboratories. Panacea Laboratories will provide blood, serum and tissue tests to diagnose and monitor cancer. The first test, TK Sense, measures expression of the gene encoding human aspartyl (asparaginyl) _-hydroxylase (HAAH) in leukocytes in patients with Chronic Myelogenous Leukemia (CML) to identify those patients unlikely to respond to therapeutic treatment with imatinib mesylate (Gleevec®). Although the molecular hallmark of CML is a mutation in a gene known as BCR-ABL, mutations to the ABL portion of the gene do not reliably predict response to Gleevec® therapy. Future products will include serum tests to diagnose and monitor prostate, liver, lung, cervical and other cancers.

Panacea has discovered that expression of the gene encoding HAAH significantly decreases when leukocytes from patients with CML are cultured in the presence of imatinib. This decrease in HAAH gene expression level correlates with drug response. Patients not responding to imatinib treatment do NOT show a decrease in HAAH expression in the assay.

"Gleevec® has become recognized as the most effective non-transplant treatment available for patients with CML. However, it is an expensive drug. Costs of the drug range from $30,000 to $40,000 per year," commented Stephen Keith, MD, MSPH, President and Chief Operating Officer, Panacea Pharmaceuticals. "Clearly, identifying patients with a low likelihood of responding to Gleevec® may avoid potentially serious adverse effects, hasten the initiation of potentially more beneficial treatment, and save considerable costs."

Panacea has also developed a quantitative measurement of HAAH in human serum. Preliminary results have determined a specificity of 97% (n=230) and a sensitivity of 94% (n=85) as indicated by significantly elevated serum HAAH levels for a series of cancers including breast, ovarian, prostate, colon, esophageal, bladder and kidney. The first of these serum diagnostic tests should be available in early 2007.

Additional information about TK Sense and future diagnostic tests available from Panacea Laboratories can be obtained via www.panacea-labs.com.

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.

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.