Immune Pharmaceuticals and EpiCept Corporation Agree to Merge

  Immune Pharmaceuticals and EpiCept Corporation Agree to Merge

Business Wire

HERZLIYA-PITUACH, Israel & TARRYTOWN, N.Y. -- November 08, 2012

Regulatory News:

Immune Pharmaceuticals Ltd. (“Immune”), a privately held Israeli company, and
EpiCept Corporation (“EpiCept”) (NASDAQ OMX Stockholm Exchange and OTCQX:
EPCT) today announced that they have entered into a definitive merger
agreement. The transaction is anticipated to close during the first quarter of
2013 and is subject to satisfaction of certain customary closing conditions,
including the approval of a majority of EpiCept shareholders.

The combined company, to be named Immune Pharmaceuticals, Inc. (“Immune
Pharmaceuticals”), will be primarily focused on developing antibody
therapeutics and other targeted drugs for the treatment of inflammatory
diseases and cancer. Immune’s lead product candidate, bertilimumab, is a full
human monoclonal antibody that targets eotaxin-1, a chemokine involved in
eosinophilic inflammation, angiogenesis and neurogenesis. Immune is currently
initiating a placebo-controlled, double-blind Phase II clinical trial with
bertilimumab for the treatment of ulcerative colitis.

The companies’ collective oncology portfolios comprise: Immune’s NanomAbs^®, a
new generation of antibody drug conjugates, and EpiCept’s vascular disruptive
agents. Immune Pharmaceuticals will continue efforts to secure a partner for
EpiCept’s Phase III clinical development candidate AmiKet™, for which efficacy
has been demonstrated for the treatment of chemotherapy-induced neuropathic
pain and post-herpetic neuralgia. Daniel Teper, PharmD, CEO of Immune and
Robert Cook, Interim President and CEO of EpiCept, jointly commented: "This
transaction will create a publicly traded specialty biopharmaceutical company
with a portfolio of four clinical-stage drug candidates for the treatment of
inflammatory diseases and cancer. Immune's bertilimumab, a first in class
monoclonal antibody, is being evaluated clinically to address unmet medical
needs in multiple severe disease indications. EpiCept's Amiket™ has clinical
data in over 1600 patients in various neuropathies, Fast Track designation and
Phase III Special Protocol Assistance from the U.S. Food and Drug
Administration as well as a defined clinical path through the European
Medicines Agency for the treatment of chemotherapy induced neuropathic pain."

Merger Details

The terms of the merger agreement provide for EpiCept to issue shares of its
common stock to Immune shareholders in exchange for all of the outstanding
shares of Immune, with EpiCept shareholders retaining approximately 22.5
percent ownership of the combined company and Immune shareholders receiving
approximately 77.5 percent, calculated on an adjusted fully diluted basis. Dr.
Daniel Teper will become the Chairman and Chief Executive Officer of Immune
Pharmaceuticals, which will have dual headquarters in Herzliya-Pituach, Israel
and in the New York City area, with research laboratories in Rehovot, Israel.
Dr. David Sidransky, Director of Head and Neck Research Division, Professor of
Oncology at the Johns Hopkins School of Medicine, and a former Vice Chairman
of the Board of Directors of ImClone Systems, will be the Vice Chairman of the
Board of Immune Pharmaceuticals. The combined company’s board of directors
will consist of not more than six current Immune directors and at least one
current EpiCept director. The Immune Pharmaceuticals management team will
include Robert Cook, EpiCept’s Interim Chief Executive Officer, who will
become the combined company’s Chief Financial Officer, and Stephane Allard,
M.D., EpiCept’s Chief Medical Officer, who will become Immune Pharmaceutical’s
Chief Medical Officer. Serge Goldner, Chief Financial Officer of Immune will
take the new role of Executive Vice President and Chief Operating Officer.
Suzy Jones, a former Genentech executive, and Myrtle Potter & Company will
continue to advise Immune Pharmaceuticals on business development and the
combined company’s Scientific Board will be jointly led by Professor Marc
Rothenberg (Cincinnati Children’s Hospital) and Professor Shimon Benita
(Hebrew University).

SunTrust Robinson Humphrey served as financial advisor to EpiCept. ROTH
Capital Partners served as financial advisor to Immune.

Additional Information

In connection with the proposed transaction, EpiCept will file a proxy
statement with the U.S. Securities and Exchange Commission (SEC) seeking
appropriate shareholder approval. SHAREHOLDERS OF EPICEPT AND OTHER INVESTORS
ARE URGED TO READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS
TO THE PROXY STATEMENT) REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. EpiCept’s
shareholders will be able to obtain a copy of the proxy statement, as well as
other filings containing information about Immune and EpiCept, without charge,
at the SEC’s Internet site (www.sec.gov). Copies of the proxy statement and
the filings with the SEC that will be incorporated by reference in the proxy
statement can also be obtained, without charge, by directing a request to
EpiCept Corporation, 777 Old Saw Mill River Rd, Tarrytown, NY 10591,
Attention: Investor Relations, Telephone: (914) 606-3500.

Participants in the Solicitation

EpiCept and its directors and executive officers and Immune and its directors
and executive officers may be deemed to be participants in the solicitation of
proxies from the shareholders of EpiCept in connection with the proposed
transaction. Information regarding the special interests of these directors
and executive officers in the merger transaction will be included in the proxy
statement of EpiCept referred to above. Additional information regarding the
directors and executive officers of EpiCept is also included in EpiCept’s
proxy statement for its 2011 Annual Meeting of Stockholders, which was filed
with the SEC on April 28, 2011. Additional information regarding the directors
and executive officers of EpiCept is also included in EpiCept’s registration
statement Post-Effective Amendment No. 1 to Form S-3 on Form S-1, which was
filed with the SEC on April 6, 2012. These documents are available free of
charge at the SEC’s web site (www.sec.gov)  and from Investor Relations at
EpiCept at the address described above.

This communication shall not constitute an offer to sell or the solicitation
of an offer to buy any securities, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such jurisdiction. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the Securities Act
of 1933, as amended (the “Act”). The securities issued in exchange for all of
the outstanding shares of Immune will not be and have not been registered
under the Act and may not be offered or sold in the United States absent
registration or an applicable exception from registration requirements.

The merger agreement and any accompanying issuance of shares by Immune
Pharmaceuticals are not, under any circumstances, to be construed as an
advertisement or a public offering of securities in Israel. Any public offer
or sale of securities in Israel may be made only in accordance with the
Israeli Securities Act-1968 (which requires, inter alia, the filing of a
prospectus in Israel or an exemption therefrom).

About Immune Pharmaceuticals Ltd.

Immune Pharmaceuticals Ltd. is an Israel and U.S.-based biopharmaceutical
company, focused on the development of next generation antibody therapeutics
addressing unmet medical needs in the treatment of inflammatory diseases and
cancer. Immune licensed worldwide rights for systemic indications of
Bertilimumab from iCo Therapeutics (TSX:ICO) in June 2011, while iCo retained
rights to all ophthalmic indications. iCo originally licensed the exclusive
world-wide rights to Bertilimumab in 2006 from MedImmune Limited (formerly
known as Cambridge Antibody Technology Limited), the global biologics unit of
AstraZeneca. Additionally, Immune has licensed from Yissum, the Technology
Transfer Company of the Hebrew University of Jerusalem, the injectable
applications of the antibody nanoparticle conjugate technology (NanomAbs®)
developed by Professor Shimon Benita. For more information, visit the Immune
website at: www.immunepharmaceuticals.com

About EpiCept Corporation

EpiCept is focused on the development and commercialization of pharmaceutical
products for the treatment of pain and cancer. The Company's pain portfolio
includes AmiKet™, a prescription topical analgesic cream in late-stage
clinical development designed to provide effective long-term relief of pain
associated with peripheral neuropathies. The Company's product Ceplene^®, when
used concomitantly with low-dose IL-2 is intended as remission maintenance
therapy in the treatment of AML for adult patients who are in their first
complete remission. The Company sold all of its rights to Ceplene^® in Europe
and certain Pacific Rim countries and a portion of its remaining Ceplene^®
inventory to Meda AB in June 2012. Ceplene^® is licensed to MegaPharm Ltd. to
market and sell in Israel and EpiCept has retained its rights to Ceplene^® in
all other countries, including countries in North and South America. The
Company has other oncology drug candidates in clinical development that were
discovered using in-house technology and have been shown to act as vascular
disruption agents in a variety of solid tumors. For more information, visit
the EpiCept website at: www.epicept.com

Forward-Looking Statements

This news release contains certain forward-looking statements that involve
risks and uncertainties that could cause actual results to be materially
different from historical results or from any future results expressed or
implied by such forward-looking statements. Such forward-looking statements
include statements regarding the proposed transaction, the efficacy, safety,
and intended utilization of the companies’ respective product candidates, the
conduct and results of future clinical trials, and plans regarding regulatory
filings, future research and clinical trials and plans regarding partnering
activities. Factors that may cause actual results to differ materially include
the risk that Immune and EpiCept may not be able to complete the proposed
transaction, the risk that product candidates that appeared promising in early
research and clinical trials do not demonstrate safety and/or efficacy in
larger-scale or later clinical trials, the risk that Immune and EpiCept will
not obtain approval to market their respective products, the risks associated
with reliance on outside financing to meet capital requirements, and the risks
associated with reliance on collaborative partners for further clinical
trials, development and commercialization of product candidates. You are urged
to consider statements that include the words “may,” “will,” “would,” “could,”
“should,” “believes,” “estimates,” “projects,” “potential,” “expects,”
“plans,” “anticipates,” “intends,” “continues,” “forecast,” “designed,”
“goal,” or the negative of those words or other comparable words to be
uncertain and forward-looking. The transaction is subject to customary closing
conditions, including approval of EpiCept’s shareholders. These factors and
others are more fully discussed in EpiCept’s periodic reports and other
filings with the SEC.

Note: The EpiCept logo is a trademark of EpiCept. The Immune logo is a
trademark of Immune.

Contact:

Immune Pharmaceuticals:
Serge Goldner, CFO
Tel: +972 9 886-6612
serge.goldner@immunepharma.com
or
New York Office:
Anna Baran – Director of Corp. Development
Tel: (646) 937-1941
anna.baran@immunepharma.com
or
EpiCept Corporation:
Robert W. Cook, CEO
Tel: (914) 606-3500
rcook@epicept.com
 
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