Celator® Announces Business Update and Fiscal Second Quarter 2013 Operational and Financial Results

  Celator® Announces Business Update and Fiscal Second Quarter 2013
  Operational and Financial Results

  *Phase 3 Study of CPX-351 in Secondary Acute Myeloid Leukemia is Enrolling
    as Planned
  *Raised $32.5 Million, Completing a $39.3 Million Private Placement
    Financing

Business Wire

EWING, N.J. -- August 15, 2013

Celator Pharmaceuticals, Inc., a pharmaceutical company developing new and
more effective therapies to treat cancer, today reported second quarter 2013
financial results.

“Celator continued to execute against key clinical and corporate milestones in
the second quarter. Most importantly, with the funding provided by our last
private placement financing and support from The Leukemia & Lymphoma Society^®
(LLS), we are making excellent progress in our Phase 3 clinical study of
CPX-351 in secondary AML, which is enrolling on schedule,” said Scott Jackson,
chief executive officer of Celator. “Also of significance, we expect our
common stock to begin trading in the third quarter. Throughout the second
quarter, we have enjoyed the strong support of our clinical collaborators and
the investment community.”

Business Highlights:

  *Patient enrollment in the Phase 3 study of the Company's lead
    investigational product, CPX-351 (cytarabine:daunorubicin) Liposome
    Injection, in patients 60-75 years of age with secondary Acute Myeloid
    Leukemia (AML) continued to meet expectations. Patient enrollment is on
    track to be completed by year-end 2014.
  *The final closing of a private placement financing providing net proceeds
    of $29,420,000 to support late-stage clinical development of CPX-351 was
    completed in April 2013.
  *The first patients were enrolled in a Phase 2 study of CPX-351 in adults
    with untreated high-risk Myelodysplastic Syndrome and AML (excluding Acute
    Promyelocytic Leukemia) at high risk of treatment-related mortality, an
    investigator-initiated protocol at the Fred Hutchinson Cancer Research
    Center.
  *A multivariate analysis of prior CPX-351 Phase 2 study data, confirming
    the activity of the treatment in patients with high-risk AML and
    identifying prognostic factors for treatment outcomes, was presented at
    the 2013 American Society of Clinical Oncology (ASCO) annual meeting in
    Chicago, Ill.
  *Michael R. Dougherty, former president and chief executive officer of
    Adolor Corporation, joined the Board of Directors. A life sciences
    industry veteran, Mr. Dougherty is also a member of the Board of Directors
    of ViroPharma Incorporated, Biota Pharmaceuticals, Inc., Cempra, Inc. and
    AltheRx Pharmaceuticals.
  *Celator corporate headquarters were relocated to Ewing, N.J.

Financial Highlights:

  *Recognized $136,000 and $290,000 for the three and six months ended June
    30, 2013, respectively, compared to zero and $135,000 for the three and
    six months ended June 30, 2012, respectively, related to funding from the
    LLS. The amounts recognized in 2013 are part of the $5,000,000 in funding
    support LLS has committed to the conduct of the Phase 3 study of CPX-351
    in secondary AML.
  *Research and development expenses were $2,019,000 and $3,670,000 for the
    three and six months ended June 30, 2013, compared to $862,000 and
    $1,783,000 for the three and six months ended June 30, 2012. The increase
    was primarily attributable to clinical, regulatory, drug storage and
    shipping and compensation expenses associated with the CPX-351 Phase 3
    study.
  *General and administrative expenses were $1,139,000 and $2,488,000 for
    three and six months ended June 30, 2013, compared to $1,121,000 and
    $1,899,000 for the three and six months ended June 30, 2012. The increase
    was primarily attributable to increased professional services fees related
    to the Company becoming a public reporting entity.
  *The net loss per share was $0.18 and $0.77 for the three and six months
    ended June 30, 2013, compared to a net loss per share of $0.19 and $0.37
    for the three and six months ended June 30, 2012. The net loss per share
    includes a non-cash derivative charge of $0.03 and $0.42 for the three and
    six months ended June 30, 2013. There was no derivative charge for the
    three or six months ended June 30, 2012. In connection with the Company’s
    review of the accounting with respect to the final closing of the
    Company’s private placement in April 2013, the Company determined that the
    obligation to issue additional shares of common stock and warrants to
    certain existing stockholders who participated in earlier closings of this
    financing existed as of March 31, 2013. This contractual obligation
    represented a derivative liability that should have been recorded at its
    estimated fair value of $6,725,797 as of March 31, 2013. The Company will
    restate its previously filed interim financial statements for the first
    quarter of 2013. This restatement will have the effect of increasing the
    net loss for the 2013 first quarter by $6,725,797.
  *As of June 30, 2013, Celator had $31,080,000 in cash and cash equivalents,
    no debt, and 26,026,793 shares of common stock outstanding. Celator
    completed final closing of a private placement financing providing net
    proceeds of $29,420,000 in April 2013.

About Celator Pharmaceuticals, Inc.

Celator Pharmaceuticals, Inc., with locations in Ewing, N.J., and Vancouver,
B.C., is a pharmaceutical company developing new and more effective therapies
to treat cancer. CombiPlex®, the company’s proprietary drug ratio technology
platform, represents a novel approach that identifies molar ratios of drugs
that will deliver a synergistic benefit, and locks the desired ratio in a
nano-scale drug delivery vehicle that maintains the ratio in patients with the
goal of improving clinical outcomes. The company pipeline includes two
clinical stage products, CPX-351 (a liposomal formulation of
cytarabine:daunorubicin) for the treatment of acute myeloid leukemia and CPX-1
(a liposomal formulation of irinotecan:floxuridine) for the treatment of
colorectal cancer; and preclinical stage product candidates, including CPX-571
(a liposomal formulation of irinotecan:cisplatin), and the hydrophobic
docetaxel prodrug nanoparticle (HDPN) formulation being studied by the
National Cancer Institute’s Nanotechnology Characterization Laboratory. For
more information, please visit the company’s website atwww.celatorpharma.com.
Information on ongoing trials is available atwww.clinicaltrials.gov.

Forward-Looking Statements

To the extent that statements contained in this press release are not
descriptions of historical facts regarding Celator, they are forward-looking
statements reflecting the current beliefs and expectations of management made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Words such as “may,” “will” “expect,” “anticipate,”
“estimate,” “intend,” and similar expressions (as well as other words or
expressions referencing future events, conditions or circumstances) are
intended to identify forward-looking statements. Examples of forward-looking
statements in this press release are whether enrollment in our Phase 3
clinical study of CPX-351 will continue on schedule, whether clinical study
results for CPX-351 obtained to date will be predictive of future clinical
study results, and our expectations for our common stock to begin trading.
Forward-looking statements in this release involve substantial risks and
uncertainties that could cause our clinical development programs, future
results, performance or achievements to differ significantly from those
expressed or implied by the forward-looking statements. Such risks and
uncertainties include, among others, the uncertainties inherent in the conduct
of future clinical studies, enrollment in clinical studies, availability of
data from ongoing clinical studies, expectations for regulatory approvals, and
other matters that could affect the availability or commercial potential of
our drug candidates. Celator undertakes no obligation to update or revise any
forward-looking statements. For a further description of the risks and
uncertainties that could cause actual results to differ from those expressed
in these forward-looking statements, as well as risks relating to the business
of the company in general, see Celator’s Form 10-K for the year ended December
31, 2012 and other filings by the company with the U.S. Securities and
Exchange Commission.


Celator Pharmaceuticals, Inc. and Subsidiaries
(A development stage company)
Consolidated Statements of Operations
(Unaudited)
                                                                    
                   Three months ended                    Six months ended
                   June 30                               June 30
                   2013               2012               2013                2012
Expenses
Research and       $ 2,018,566        $ 862,372            3,669,975         $ 1,782,847
development
Leukemia &
Lymphoma             (135,747   )       -                  (289,593    )       (135,000   )
Society
funding
Research
collaboration        -                  (19,440    )       -                   (19,440    )
income
General and          1,138,649          1,120,819          2,487,648           1,899,169
administrative
Loss on
disposal of          124,965            5,627              138,692             19,499
property and
equipment
Amortization
and                 49,464           85,714           97,052            171,679    
depreciation
Operating loss      (3,195,897 )      (2,055,092 )      (6,103,774  )      (3,718,754 )
Other income
(expenses)
Foreign
exchange             (1,435     )       (7,733     )       (4,484      )       (7,650     )
(loss) gain
Interest and
miscellaneous        3,037              980                3,466               1,859
income
Non-cash
derivative           (747,311   )       -                  (7,473,108  )       -
instrument
charge
Interest            (99,371    )      (60,419    )      (147,025    )      (427,336   )
expense
Net loss
attributable       $ (4,040,977 )     $ (2,122,264 )     $ (13,724,925 )     $ (4,151,881 )
to common
stockholders
                                                                                          
Net loss per
share
Basic and          $ (0.18      )     $ (0.19      )     $ (0.77       )     $ (0.37      )
diluted
                                                                                          
Weighted
average of
common shares
outstanding
Basic and           22,089,921       11,230,668       17,904,791        11,230,667 
diluted
                                                                                          


Celator Pharmaceuticals, Inc. and Subsidiaries
(A development stage company)
Consolidated Balance Sheets
(Unaudited)
                                                        
                                        June 30, 2013        December 31, 2012
Assets
Current assets:
Cash and cash equivalents               $ 31,079,873         $  9,648,008
Restricted cash                           288,052               40,205
Other receivables                         6,432                 2,000,357
Prepaid expenses and deposits             289,031               148,275
Assets held for sale                      76,501                251,269
Other current assets                     358,359             -            
Total current assets                      32,098,248            12,088,114
Property and equipment, net               1,197,607             1,245,025
Other assets                             30,588              105,805      
Total assets                            $ 33,326,443        $  13,438,944   
                                                                             
Liabilities
Current liabilities:
Accounts payable                        $ 665,170            $  699,858
Accrued liabilities                       1,151,440             1,194,998
Current portion of deferred revenue       542,986               615,384
Current portion of loans                 -                   1,200,000    
Total current liabilities                 2,359,596             3,710,240
                                                                             
Deferred revenue                          859,729               1,076,924
Loans payable                            -                   1,800,000    
Total liabilities                        3,219,325           6,587,164    
                                                                             
Stockholders' equity
Common stock
Authorized 255,000,000 shares, par
value $0.001
Issued and outstanding 26,026,793
shares as of June 30, 2013 and            26,027                13,673
13,673,160 shares as of December
31, 2012
Warrants                                  1,083,193             1,083,193
Additional paid-in capital                155,477,304           118,509,395
Accumulated other comprehensive           (1,133,266   )        (1,133,266   )
loss
Deficit accumulated during the           (125,346,140 )       (111,621,215 )
development stage
Total stockholders' equity               30,107,118          6,851,780    
Total liabilities and stockholders'     $ 33,326,443        $  13,438,944   
equity
                                                                             

Contact:

Sam Brown, Inc.
Mike Beyer, 773-463-4211
beyer@sambrown.com