SAN DIEGO, CA–(EMWNews – August 8, 2008) – Cypress Bioscience, Inc. (NASDAQ: CYPB) today

announced its financial results for the second quarter of 2008. For the

quarter ended June 30, 2008, the Company reported a net loss of

approximately $4.0 million or $0.11 per share basic and diluted compared to

net income of approximately $2.3 million or $0.07 per share basic and

diluted for the corresponding period in 2007. At June 30, 2008, the

Company had cash, cash equivalents and investments totaling $153.4 million.

The Company reported revenues of $1.0 million and $15.2 million for the

quarter and six months ended June 30, 2008, respectively, compared to $5.9

million and $6.9 million for the quarter and six months ended June 30,

2007, respectively. The decrease in revenues during the second quarter of

2008 is primarily due to a $5.0 million milestone payment received from

Forest Laboratories in June 2007 as a consequence of the results of our

second Phase III trial for milnacipran. The increase in revenues during

the six months ended June 30, 2008 is due to a $10.0 million milestone

payment received from Forest Laboratories in February 2008 upon NDA

acceptance and a $3.2 million payment received from Forest Laboratories

also upon NDA acceptance in February 2008 as reimbursement for one-third of

the costs paid in connection with the second Phase III trial for

milnacipran. This increase in revenues during 2008 was partially offset by

the receipt of a $5.0 million milestone payment during 2007. The revenues

recognized during 2008 and 2007 consist solely of amounts earned pursuant

to the Company’s collaboration agreement with Forest Laboratories for the

development and marketing of milnacipran, which was entered into during

January 2004. Such revenues include the recognition of the upfront payment

of $25.0 million over a period of eight years, an additional $1.0 million

license payment received from Forest Laboratories in July 2007 to extend

the territory to include Canada recognized over the remainder of the eight

year amortization period, sponsored development reimbursements, funding

received from Forest Laboratories for certain of our employees devoted to

the development of milnacipran, a $10.0 million milestone payment and $3.2

million payment for reimbursement of certain costs that were received from

Forest Laboratories during the first quarter of 2008 and a $5.0 million

milestone payment received from Forest Laboratories during the second

quarter of 2007.

Total operating expenses for the quarter and six months ended June 30, 2008

were $6.2 million and $25.0 million, respectively, compared to $5.2 million

and $8.6 million for the quarter and six months ended June 30, 2007,

respectively. The increase in operating expenses for the quarter ended

June 30, 2008 was primarily due to costs incurred during the second quarter

in connection with our proof of concept studies for new compounds,

development costs incurred during the second quarter of 2008 in connection

with validation activities for our personalized medicine laboratory

services, which were acquired in connection with the Proprius acquisition

in March 2008, one-time costs owed to Forest Laboratories as agreed upon in

the amendment to our agreement with Forest Laboratories, higher legal fees

incurred during the second quarter of 2008 due to increased patent filing

activity and increased share-based compensation expense related to options

granted in 2008. The increase in operating expenses for the six months

ended June 30, 2008 was primarily due to a charge in the amount of $12.6

million for in-process research and development in connection with the

acquisition of Proprius in March 2008. Also contributing to the increase

in operating expenses in for the six months ended June 30, 2008 was a $1.0

million milestone payment and $0.5 million sublicense fee owed to Pierre

Fabre upon NDA acceptance in connection with our collaboration agreement

with Forest Laboratories, as well as the reasons contributing to the

increase in operating expenses for the three months ended June 30, 2008 as

described above.

About Cypress Bioscience, Inc.

Cypress Bioscience is committed to developing and commercializing

pharmaceutical products and personalized medicine laboratory services that

allow physicians to serve unmet medical needs. Cypress’ strategy involves

evaluating various other potential strategic transactions, including the

potential acquisition of products, product candidates, technologies and

companies, and other alternatives.

For more information about Cypress, please visit the Company’s web site at

www.cypressbio.com.

This press release, as well as Cypress’ SEC filings and web site at

http://www.cypressbio.com, contain forward-looking statements within the

meaning of the Private Securities Litigation Reform Act of 1995 including

statements about the potential of milnacipran to treat Fibromyalgia and any

new potential strategic transaction. Actual results could vary materially

from those described as a result of a number of factors, including those

set forth in Cypress Annual Report on Form 10-K, the most recent Form 10-Q

and any subsequent SEC filings. In addition, there is the risk that the New

Drug Application that we filed for milnacipran may not be ultimately

approved by the FDA; that we and Forest may elect not to continue

development of milnacipran for any reason; that the results from our third

Phase III clinical trial may not achieve statistical significance, that we

may not be able to protect our milnacipran related patents and proprietary

technology; and that we may not be successful in any of our proof of

concept trials or in developing any of the products or services acquired in

connection with our acquisition of Proprius. Cypress undertakes no

obligation to revise or update these forward-looking statements to reflect

events or circumstances after the date of this press release, except as

required by law.

                         CYPRESS BIOSCIENCE, INC.

                  Condensed Consolidated Financial Data

                   (In thousands except per share data)





Statement of Operations Data:



                                       Quarter ended     Six months ended

                                          June 30,           June 30,

                                      2008      2007      2008      2007

                                    --------  --------- --------  ---------

                                        (unaudited)         (unaudited)

Revenues under collaborative

 agreement                          $  1,015  $   5,949 $ 15,231  $   6,910



Operating expenses:

   Research and development            3,009      2,192    5,679      3,186

   General and administrative          3,166      2,969    6,704      5,440

   In-process research and

    development                            -          -   12,590          -

                                    --------  --------- --------  ---------

Total operating expenses               6,175      5,161   24,973      8,626

                                    --------  --------- --------  ---------



Interest income                        1,169      1,551    2,870      2,834

                                    --------  --------- --------  ---------



Net income (loss)                   $ (3,991) $   2,339 $ (6,872) $   1,118

                                    ========  ========= ========  =========



Net income (loss) per share - basic $  (0.11) $    0.07 $  (0.18) $    0.03

                                    ========  ========= ========  =========



Shares used in computing net income

 (loss) per share - basic             37,642     33,716   37,583     32,993

                                    ========  ========= ========  =========



Net income (loss) per share -

 diluted                            $  (0.11) $    0.07 $  (0.18) $    0.03

                                    ========  ========= ========  =========



Shares used in computing net income

 (loss) per share - diluted           37,642     35,135   37,583     34,273

                                    ========  ========= ========  =========









Balance Sheet Data:



                                                    June 30,   December 31,

                                                      2008         2007

                                                  ------------ ------------

                                                  (unaudited)

Assets

   Cash, cash equivalents and short-term

    investments                                   $    153,428 $    181,807

   Other current assets                                    547          794

   Goodwill                                             26,466            -

   Other non-current assets                                325           99

                                                  ------------ ------------

      Total assets                                $    180,766 $    182,700

                                                  ============ ============



Liabilities and Stockholders' Equity

   Current liabilities                            $      5,346 $      4,625

   Long-term liabilities                                 8,391       10,060

   Stockholders' equity                                167,029      168,015

                                                  ------------ ------------

      Total liabilities and stockholders' equity  $    180,766 $    182,700

                                                  ============ ============

CONTACT: Michael Hufford, VP Corporate Development Mary Gieson, Investor Relations Cypress Bioscience, Inc. (858) 452-2323