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Talon Therapeutics, Inc. Reports Fourth Quarter and Year End 2012 Financial Results



Talon Therapeutics, Inc. Reports Fourth Quarter and Year End 2012 Financial
Results

SOUTH SAN FRANCISCO, Calif., April 1, 2013 (GLOBE NEWSWIRE) -- Talon
Therapeutics, Inc., (OTCQB:TLON), today reported financial results for the
fourth quarter and year ended December 31, 2012.

2012 Corporate Highlights

  * FDA accelerated approval of Marqibo® for the treatment of Philadelphia
    chromosome negative adult acute lymphoblastic leukemia (ALL) patients in
    second or greater relapse or whose disease has progressed following two or
    more prior lines of anti-leukemia therapy.
  * Enrollment and dosing of the first patient in the Phase 3 confirmatory
    study of Marqibo®, named HALLMARQ, in adult patients with newly diagnosed
    Philadelphia chromosome negative ALL.
  * Publication of the Marqibo® RALLY Study in the Journal of Clinical
    Oncology (JCO).

Three Months Ended December 31, 2012 Unaudited Financial Results

For the three months ended December 31, 2012, the Company reported net income
of $7.1 million and deemed dividends on preferred stock of $3.2 million, which
when combined, resulted in net income applicable to common stockholders of
$3.9 million, or $0.18 and $.02 per basic and diluted share, respectively. The
change in fair value of Talon's preferred stockholders' right to purchase
additional shares of Series A-3 preferred stock contributed $13.1 million, or
$0.59 per share, of total net income applicable to common stockholders for the
three months ended December 31, 2012. The change in fair value of Talon's
preferred stockholders' right to purchase additional shares of preferred stock
is primarily driven by fluctuations in price of Talon's common stock. This
compares with a net loss of $1.7 million and deemed dividends on preferred
stock of $1.0 million for the three months ended December 31, 2011, which when
combined, resulted in a net loss applicable to common stockholders of $2.7
million, or $0.12 per share, for such 2011 period.

Total operating expenses for the three months ended December 31, 2012 were
$5.3 million, compared with $3.7 million for the three months ended December
31, 2011. Research and development expenses were $2.7 million for the three
months ended December 31, 2012, compared with $2.3 million for the three
months ended December 31, 2011. General and administrative expenses were $2.7
million for the three months ended December 31, 2012, compared with $1.4
million for the three months ended December 31, 2011.

Cash used in operations was $5.5 million for the three months ended December
31, 2012. As of December 31, 2012, the Company had cash and cash equivalents
of $3.0 million. Following the end of the 2012 fiscal year, on January 11,
2013, the Company sold additional shares of its Series A-3 Preferred Stock,
resulting in gross proceeds of $6.0 million.

Year Ended December 31, 2012 Financial Results

For the year ended December 31, 2012, the Company reported a net loss of $43.7
million and deemed dividends on preferred stock of $21.1 million, which when
combined, resulted in a net loss applicable to common stockholders of $64.8
million, or $2.95 per share. The deemed dividends on preferred stock
attributed $0.96 per share to the total net loss applicable to common
stockholders for the year ended December 31, 2012. The change in fair value of
Talon's preferred stockholders' right to purchase additional shares of Series
A-3 preferred stock contributed $18.1 million, or $0.82 per share, of the
total net loss applicable to common stockholders for the twelve months ended
December 31, 2012. This compares with a net loss of $18.8 million and deemed
dividends on preferred stock of $3.9 million, which when combined, resulted in
a net loss applicable to common stockholders of $22.8 million, or $1.06 per
share for the year ended December 31, 2011.

Total operating expenses for the year ended December 31, 2012, were $20.8
million, compared with $18.5 million for the year ended December 31, 2011.
Research and development expenses were $12.9 million for the twelve months
ended December 31, 2012, compared with $13.4 million for the year ended
December 31, 2011. General and administrative expenses were $7.9 million for
the year ended December 31, 2012, compared with $5.1 million for the year
ended December 31, 2011.

Cash used in operations was $20.2 million for the year ended December 31,
2012.

About Marqibo® (vincristine sulfate liposome injection)

Marqibo is a novel, targeted Optisome™ encapsulated formulation product
candidate of the FDA-approved anticancer drug vincristine. Talon is primarily
developing Marqibo for the treatment of Ph- adult ALL. Vincristine, a
microtubule inhibitor, is FDA-approved for ALL and is widely used as a single
agent and in combination regimens for treatment for hematologic malignancies
such as lymphomas and leukemias. Talon's encapsulation formulation is designed
to provide prolonged circulation of the drug in the blood and accumulation at
the tumor site. These characteristics are intended to increase the dose of
vincristine delivered in a safe and effective manner.

Talon has received orphan drug and fast track designations for Marqibo for the
treatment of adult ALL from the U.S. Food and Drug Administration. Marqibo has
also received orphan drug designation in adult ALL from the European Medicines
Evaluation Agency.

Please see important safety information below and the full prescribing
information for Marqibo at www.marqibo.com.

Indication and usage

Marqibo is a liposomal vinca alkaloid indicated for the treatment of adult
patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic
leukemia (ALL) in second or greater relapse or whose disease has progresses
following two or more anti-leukemia therapies. This indication is based on
overall response rate. Clinical benefit such as improvement in overall
survival has not been verified.

Important safety information

CONTRAINDICATIONS

  * Marqibo is contraindicated in patients with demyelinating conditions
    including Charcot-Marie-Tooth syndrome
  * Marqibo is contraindicated in patients with hypersensitivity to
    vincristine sulfate or any of the other components of Marqibo (vinCRIStine
    sulfate LIPOSOME injection
  * Marqibo is contraindicated for intrathecal administration

                                   WARNING

         See full prescribing information for complete boxed warning.

  * For Intravenous Use Only -- Fatal if Given by Other Routes
  * Death has occurred with intrathecal use
  * Marqibo (vinCRIStine sulfate LIPOSOME injection) has different dosage
    recommendations than vinCRIStine sulfate injection. Verify drug name and
    dose prior to preparation and administration to avoid overdosage.

Warnings and Precautions

For Intravenous Use Only

For Intravenous use only. Fatal if given by other routes.

Extravasation Tissue Injury

Only administer through a secure and free-flowing venous access line. If
extravasation is suspected, discontinue infusion immediately and consider
local treatment measures.

Neurologic Toxicity

Sensory and motor neuropathies are common and are cumulative. Monitor patients
for symptoms of neuropathy, such as hypoesthesia, hyperesthesia, paresthesia,
hyporeflexia, areflexia, neuralgia, jaw pain, decreased vibratory sense,
cranial neuropathy, ileus, burning sensation, arthralgia, myalgia, muscle
spasm, or weakness, both before and during treatment. Orthostatic hypotension
may occur. The risk of neurologic toxicity is greater if Marqibo is
administered to patients with preexisting neuromuscular disorders or when
other drugs with risk of neurologic toxicity are being given. In the studies
of relapsed and/or refractory adult ALL patients, Grade >= 3 neuropathy events
occurred in 32.5% of patients. Worsening neuropathy requires dose delay,
reduction, or discontinuation of Marqibo.

Myelosuppression

Monitor complete blood counts prior to each dose of Marqibo. If Grade 3 or 4
neutropenia, thrombocytopenia, or anemia develops, consider Marqibo dose
modification or reduction as well as supportive care measures.

Tumor Lysis Syndrome

Tumor lysis syndrome (TLS) may occur in patients with ALL receiving Marqibo.
Anticipate, monitor for, and manage.

Constipation and Bowel Obstruction

Ileus, bowel obstruction, and colonic pseudo-obstruction have occurred.
Marqibo can cause constipation. Institute a prophylactic bowel regimen to
mitigate potential constipation, bowel obstruction, and/or paralytic ileus,
considering adequate dietary fiber intake, hydration, and routine use of stool
softeners, such as docusate. Additional treatments, such as senna, bisacodyl,
milk of magnesia, magnesium citrate, and lactulose may be considered.

Fatigue

Marqibo can cause severe fatigue. Marqibo dose delay, reduction, or
discontinuation may be necessary.

Hepatic Toxicity

Fatal liver toxicity and elevated levels of aspartate aminotransferase have
occurred. Elevated levels of aspartate aminotransferase of Grade >=3 occurred
in 6-11% of patients in clinical trials. Monitor hepatic function tests.
Reduce or interrupt Marqibo for hepatic toxicity.

Embryofetal Toxicity

Marqibo can cause fetal harm when administered to a pregnant woman.
Vincristine sulfate liposome injection was teratogenic or caused embryo-fetal
death in animals. Women of childbearing potential should avoid becoming
pregnant while being treated with Marqibo. There are no adequate and
well-controlled studies of Marqibo in pregnant women and there were no reports
of pregnancy in any of the clinical studies in the Marqibo clinical
development program. If this drug is used during pregnancy, or if the patient
becomes pregnant while taking this drug, the patient should be apprised of the
potential hazard to a fetus [see Use in Specific Populations].

Adverse Reactions

The most common adverse reactions (>30%) were constipation (57%), nausea
(52%), pyrexia (43%), fatigue (41%), peripheral neuropathy (39%), febrile
neutropenia (38%), diarrhea (37%), anemia (34%), decreased appetite (33%), and
insomnia (32%).

The most commonly reported SAEs included febrile neutropenia (20.5%), pyrexia
(13.3%), hypotension (7.2%), respiratory distress (6.0%), and cardiac arrest
(6.0%).

Twenty-eight percent of patients experienced adverse reactions leading to
treatment discontinuation. The most common adverse reactions that caused
treatment discontinuation were peripheral neuropathy (10%), leukemia-related
(7%), and tumor lysis syndrome (2%).

Deaths occurred in 23% of patients in study 1. The non-leukemia related causes
of deaths were brain infarct (1), intracerebral hemorrhage (2), liver failure
(1), multi-system organ failure (2), pneumonia and septic shock (3),
respiratory failure (4), pulmonary hemorrhage (1), and sudden cardiac death
(1).

Drug Interactions

No formal drug interaction studies have been conducted with Marqibo. Marqibo
is expected to interact with drugs known to interact with non-liposomal
vincristine sulfate.

Simultaneous oral or intravenous administration of phenytoin and
antineoplastic chemotherapy combinations that included non-liposomal
vincristine sulfate has been reported to reduce blood levels of phenytoin and
to increase seizure activity.

CYP3A Interactions

Vincristine sulfate, the active agent in Marqibo, is a substrate for
cytochrome P450 3A isozymes (CYP3A); therefore, the concomitant use of strong
CYP3A inhibitors should be avoided (e.g., ketoconazole, itraconazole,
voriconazole, posaconazole, clarithromycin, atazanavir, indinavir, nefazodone,
nelfinavir, ritonavir, saquinavir, telithromycin). Similarly, the concomitant
use of strong CYP3A inducers should be avoided (e.g., dexamethasone,
phenytoin, carbamazepine, rifampin, rifabutin, rifapentine, phenobarbital, St.
John's Wort).

P-glycoprotein Interactions

Vincristine sulfate, the active agent in Marqibo, is also a substrate for
P-glycoprotein (P-gp). The effect of concomitant use of potent P-gp inhibitors
or inducers has not been investigated; it is likely that these agents will
alter the pharmacokinetics or pharmacodynamics of Marqibo. Therefore the
concomitant use of potent P-gp inhibitors or inducers should be avoided.

Use in Specific Populations

Pregnancy

Pregnancy Category D [see Warnings and Precautions]

Based on its mechanism of action and findings from animal studies, Marqibo can
cause fetal harm when administered to pregnant women.

If this drug is used during pregnancy, or if the patient becomes pregnant
while taking this drug, the patient should be apprised of the potential hazard
to a fetus. In an embryofetal developmental study, pregnant rats were
administered vincristine sulfate liposome injection intravenously during the
period of organogenesis at vincristine sulfate doses of 0.022 to 0.09
mg/kg/day. Drug-related adverse effects included fetal malformations (skeletal
and visceral), decreases in fetal weights, increased numbers of early
resorptions and post-implantation losses, and decreased maternal body weights
Malformations were observed at doses >= 0.044 mg/kg/day in animals at systemic
exposures approximately 20-40% of those reported in patients at the
recommended dose.

Nursing Mothers

It is not known whether this drug is excreted in human milk. Because many
drugs are excreted in human milk and because of the potential for serious
adverse reactions in nursing infants, a decision should be made whether to
discontinue nursing or discontinue the drug taking into account the importance
of the drug to the mother.

Pediatric Use

The safety and effectiveness of Marqibo in pediatric patients have not been
established.

Geriatric Use

Safety and effectiveness in elderly individuals have not been established. In
general, dose selection for an elderly patient should be cautious, reflecting
the greater frequency of decreased hepatic, renal, or cardiac function, and of
concomitant disease or other drug therapy.

Renal Impairment

The influence of renal impairment on the safety, efficacy, and
pharmacokinetics of Marqibo has not been evaluated.

Hepatic Impairment

Non-liposomal vincristine sulfate is excreted primarily by the liver. The
influence of severe hepatic impairment on the safety and efficacy of Marqibo
has not been evaluated. The pharmacokinetics of Marqibo was evaluated in
patients with moderate hepatic dysfunction (Child-Pugh B) secondary to
melanoma liver metastases. The dose-adjusted maximum plasma concentration
(C[max]) and area under the concentration-time curve (AUC) of Marqibo in
patients with moderate hepatic impairment was comparable to the C[max] and AUC
of patients with ALL who had otherwise normal hepatic function.

About Talon Therapeutics

Talon Therapeutics, Inc. is a biopharmaceutical company dedicated to seizing
upon medical opportunities, efficiently and expertly leading product
candidates through clinical development, and transferring value to patients,
patient care providers, shareholders, corporate partners, and employees. In
addition to Marqibo® (vincCRIStine sulfate LIPOSOME injection) which received
accelerated approval from the US FDA in August 2012, Talon has additional
pipeline opportunities some of which like Marqibo, have the potential to
improve delivery and enhance the therapeutic benefits of well characterized,
proven chemotherapies and enable high potency dosing without increased
toxicity.

Additional information on Talon Therapeutics can be found at www.talontx.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These statements are
often, but not always, made through the use of words or phrases such as
"anticipates," "expects," "plans," "believes," "intends," and similar words or
phrases. Such statements involve risks and uncertainties that could cause
Talon's actual results to differ materially from the anticipated results and
expectations expressed in these forward-looking statements. These statements
are based on current expectations, forecasts and assumptions that are subject
to risks and uncertainties, which could cause actual outcomes and results to
differ materially from these statements. Such risks and uncertainties include:
Talon's ability to commercialize Marqibo alone or with any strategic partner;
the likelihood of completing a strategic transaction; Talon's lack of
experience commercializing pharmaceutical products; that Talon will be able to
secure the additional capital necessary to fund operational activities for
Marqibo, including its ongoing research and development programs to
completion; Talon's reliance on third-party clinical research organizations to
develop its product candidates, and its lack of experience in developing
pharmaceutical products. Additional risks are described in the company's
Annual Report on Form 10-K for the year ended December 31, 2012. Talon assumes
no obligation to update these statements, except as required by law.

                                                                  
TALON THERAPEUTICS, INC.
                                                                  
BALANCE SHEETS
                                                                  
                                                   December 31,  December 31,
                                                   2012          2011
                                                                  
ASSETS                                                            
Current assets:                                                   
Cash and cash equivalents                          $ 2,973,028   $ 1,028,518
Inventory                                          283,321       —
Prepaid expenses and other current assets          237,918       635,297
Total current assets                               3,494,267     1,663,815
                                                                  
Property and equipment, net                        42,714        72,431
Restricted cash                                    34,004        —
Debt issuance costs, net                           517,525       751,401
Total assets                                       $ 4,088,510   $ 2,487,647
                                                                  
LIABILITIES AND STOCKHOLDERS' DEFICIT                             
Current liabilities:                                              
Accounts payable and accrued liabilities           $ 3,549,276   $ 4,556,951
Investors' rights to purchase shares of Series A-3 14,276,000    —
Preferred Stock
Other short term liabilities                       2,474         2,110
                                                                  
Total current liabilities                          17,827,750    4,559,061
Notes payable, net of discount                     24,833,183    24,033,257
Investors' right to purchase future shares of      —             1,772,100
Series A-1 and A-2 preferred stock
Warrant liabilities, non-current                   563,070       501,664
Other long term liabilities                        —             2,474
Total long term liabilities                        25,396,253    26,309,495
Total liabilities                                  43,224,003    30,868,556
Redeemable convertible preferred stock; $0.001 par                
value:
10 million shares authorized, 0.7 million and 0.4
million shares issued and outstanding at December
31, 2012 and December 31, 2011, respectively;      47,913,500    30,643,219
aggregate liquidation value of $77.9 million and
$46.4 million at December 31, 2012 and December
31, 2011, respectively
                                                                  
Stockholders' deficit:                                            
Common stock; $0.001 par value:                                   
600 million shares authorized, 22.0 million and
21.8 million shares issued and outstanding at      22,001        21,779
December 31, 2012 and December 31, 2011,
respectively
Additional paid-in capital                         136,562,864   120,887,432
Accumulated deficit                                (223,633,858) (179,933,339)
Total stockholders' deficit                        (87,048,993)  (59,024,128)
Total liabilities, redeemable convertible          $ 4,088,510   $ 2,487,647
preferred stock and stockholders' deficit
                                                                  

                                                                 
TALON THERAPEUTICS, INC.
                                                                 
STATEMENTS OF OPERATIONS
                                                                 
                       Three Months Ended        Years Ended
                       December 31,              December 31,
                       2012        2011          2012           2011
                       (unaudited) (unaudited)    
Operating expenses:                                              
General and            $ 2,660,675 $ 1,398,422   $ 7,900,846    $ 5,121,678
administrative
Research and           2,651,519   2,325,690     12,898,688     13,387,168
development
Total operating        5,312,194   3,724,112     20,799,534     18,508,846
expenses
                                                                 
Loss from operations   (5,312,194) (3,724,112)   (20,799,534)   (18,508,846)
                                                                 
Other                                                            
income/(expense):
Interest income        597         158           3,324          8,124
Interest expense       (928,931)   (900,112)     (3,751,799)    (3,560,444)
Other expense, net     —           (2,768)       —              (78,768)
                                                                 
Change in fair value   268,111     454,187       (73,151)       (41,146)
of warrant liabilities
Change in fair value
of investors' right to
purchase future shares .—          2,522,900     (1,006,900)    3,358,900
of Series A-1 and A-2
preferred stock
Change in fair value
of investors' right to
purchase future shares 13,064,200  —             (18,072,459)   —
of Series A-3
preferred stock
Total other            12,403,977  2,074,365     (22,900,985)   (313,334)
income/(expense)
                                                                 
Net income/(loss)      $ 7,091,783 $ (1,649,747) $ (43,700,519) $ (18,822,180)
                                                                 
Deemed dividends
attributable to
preferred stock in     (1,692,065) (1,028,307)   (5,847,123)    (3,947,713)
connection with
accretion
Deemed dividends
attributable to
preferred stock in     (1,488,750) —             (15,236,723)   —
connection with
embedded conversion
features
Net income/(loss)
applicable to common   $ 3,910,968 $ (2,678,054) $ (64,784,365) $ (22,769,893)
stockholders
                                                                 
Net income/(loss) per  $ 0.18      $ (0.12)      $ (2.95)       $ (1.06)
share, basic
Weighted average
shares used in
computing net          22,001,891  21,778,812    21,925,200     21,557,062
income/(loss) per
share, basic
Net income/(loss) per  $ 0.02      $ (0.12)      $ (2.95)       $ (1.06)
share, diluted
Weighted average
shares used in
computing net          172,472,705 21,778,812    21,925,200     21,557,062
income/(loss) per
share, diluted
                                                                 

CONTACT: Corporate
         Talon Therapeutics, Inc.
         Investor Relations Team
         (650) 588-6641
         investor.relations@talontx.com

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