Noven Reports Quarterly EPS of $0.18, Adjusted EPS of $0.23

Quarterly Net Income at Novogyne Joint Venture Increases 34% to

$25.4 Million

MIAMI–(EMWNews)–Noven Pharmaceuticals, Inc. (NASDAQ:NOVN) today announced financial

results for the second quarter and first half of 2008. Noven reported

net income of $4.5 million or $0.18 diluted earnings per share for the

quarter ended June 30, 2008, including a charge of $1.7 million

(discussed below) relating to a previously disclosed voluntary product

recall initiated during the quarter. Excluding this charge and related

tax effects, Noven would have reported net income of $5.6 million or

$0.23 diluted earnings per share for the second quarter of 2008.

Financial & Business Highlights

Novogyne & Vivelle-Dot^®.

At Novogyne Pharmaceuticals, Noven’s joint

venture with Novartis Pharmaceuticals Corporation, net income for the

second quarter of 2008 increased 34%, and net revenues increased 21%,

compared to the second quarter of 2007. Total prescriptions for

Vivelle-Dot^®, Novogyne’s

lead product, increased 6% in the second quarter of 2008 compared to the

same quarter in 2007, while total prescriptions in the overall U.S.

hormone therapy market decreased 6% for the same period.

Daytrana^®.

Sales of Daytrana^® by

Shire Limited in the 2008 second quarter were sufficient to trigger the

third and final $25 million sales milestone due to Noven. In addition,

together with Shire, Noven believes the definitive root cause of the

peel force issue affecting Daytrana has been identified, and testing of

solutions expected to address the issue is ongoing.

Stavzor™.

On July 29, 2008, the FDA granted final approval of Noven’s

Stavzor™ product (valproic acid delayed

release capsules). The product will be marketed and sold by Noven

Therapeutics, Noven’s specialty

pharmaceutical subsidiary, and is expected to be available in pharmacies

in the second half of August 2008.

Organizational Initiatives. Since

June 2008, Noven has added three highly experienced pharmaceutical

industry veterans to lead the critical functions of marketing and sales,

transdermal research and development, and clinical, regulatory and

medical affairs. With the participation of these new executives, Noven

is continuing its review of all areas of spending and investment to

assure that they advance the interests of shareholders.

CEO Comment

“The 2008 second quarter included another

strong financial performance by Novogyne, as well as continued

operational improvement in other areas of our business,”

said Peter Brandt, Noven’s President and

Chief Executive Officer. “At Novogyne, net

income increased 34% over the same quarter last year, Vivelle-Dot total

prescriptions and market share continued to increase, and we believe

there is opportunity for continued significant growth in this business.

At Noven Therapeutics, we are well prepared for the August launch of

Stavzor, which received final FDA approval just last week. At Noven

Transdermals, we believe, together with Shire, that we have identified

the definitive root cause of the peel force issue affecting Daytrana,

and we are testing solutions that we believe will address the issue.

Daytrana continues to bring important benefits to patients with ADHD,

and sales of the product by Shire in the second quarter triggered the

third and final $25 million milestone to Noven,”

said Brandt. “In addition, across key

functions within the company – including

research and development, sales and marketing, and clinical and

regulatory – we have added new senior

executives with substantial industry experience that should help us

successfully execute our growth strategy.”

Financial Results

Noven’s financial results for the second

quarter and first six months of 2008 included the results of operations

of Noven Therapeutics (formerly JDS Pharmaceuticals, LLC), a specialty

pharmaceutical company acquired by Noven in August 2007. The second

quarter and first half of 2008 also included charges of $1.7 million and

$1.95 million, respectively, representing reimbursement due to Shire in

connection with the voluntary recall of two lots of Daytrana product

initiated in 2008 (the “Daytrana Charge”).

Second Quarter Results

Including the impact of the Daytrana Charge, for the second quarter of

2008, Noven reported net income of $4.5 million ($0.18 diluted earnings

per share), compared to $7.6 million ($0.30 diluted earnings per share)

for the quarter ended June 30, 2007. Excluding the Daytrana Charge and

the related tax effects, net income for the 2008 second quarter would

have been $5.6 million ($0.23 diluted earnings per share). A

reconciliation of net income and earnings per share on a GAAP basis to

net income and earnings per share as adjusted to reflect the excluded

items is attached to this press release.

Noven’s net revenues in the 2008 second

quarter were $24.6 million, a 31% increase over the second quarter of

2007. This increase reflects the addition of $6.6 million in Pexeva^®

and Lithobid^®

product sales through Noven Therapeutics, as well as increased license

and contract revenues, primarily due to amortization of deferred revenue

from additional Daytrana sales milestones received in 2007.

Gross margin, as a percentage of total net product revenues, was 35% in

the 2008 second quarter compared to 38% in the same quarter last year.

Gross margin in the second quarter of 2008 was adversely affected by

increased quality assurance activities and expenses, primarily related

to Daytrana production, which offset the favorable impact of higher

gross margins on Noven Therapeutics’ products.

Research and development expenses in the 2008 second quarter, at $3.3

million, were largely unchanged from the second quarter of 2007. Selling

and marketing expenses increased to $5.3 million from $0.2 million in

the 2007 second quarter due to the addition of the Noven Therapeutics

marketing and sales infrastructure supporting Pexeva, Lithobid and

Stavzor (approved by the FDA in July 2008). General and administrative

expenses increased $3.4 million, or 62%, due primarily to the Daytrana

Charge and the addition of Noven Therapeutics.

Noven recognized $12.4 million in earnings from Novogyne in the 2008

second quarter, an increase of 35% compared to the $9.2 million

recognized in the same quarter last year.

Novogyne’s net income for the second quarter

of 2008 increased 34% to $25.4 million, compared to $18.9 million in the

2007 second quarter. Novogyne’s net revenues

for the 2008 second quarter increased 21% to $43.8 million. Novogyne’s

gross margin for the second quarter of 2008 increased slightly to 80%,

and its selling, general and administrative expenses were largely

unchanged at $9.8 million.

First Half Results

Including the impact of the Daytrana Charge, Noven reported net income

of $7.1 million ($0.29 diluted earnings per share) for the first six

months of 2008, compared to $12.6 million ($0.50 diluted earnings per

share) reported for the first six months of 2007. Excluding the Daytrana

Charge and the related tax effects, Noven would have reported net income

for the first six months of 2008 of $8.3 million ($0.34 diluted earnings

per share).

Noven’s net revenues for the first six months

of 2008 were $46.1 million, a 21% increase over the same period last

year. This increase reflects the addition of $12.3 million in Pexeva and

Lithobid product sales, as well as increased license and contract

revenues, primarily due to amortization of deferred revenue from

additional Daytrana sales milestones received in 2007.

Gross margin, as a percentage of total net product revenues, was 33% in

the first six months of 2008 compared to 41% in the same period in 2007.

Gross margin in the first half of 2008 was adversely affected by

inventory write-offs and costs associated with the equipment failure in

transdermal manufacturing described above, as well as increased quality

assurance activities and expenses, primarily related to Daytrana

production, both of which offset the favorable impact of higher gross

margins on Noven Therapeutics’ products.

Research and development expenses were largely unchanged at $6.6 million

for the first half of 2008. Selling and marketing expenses increased to

$10.2 million from $0.5 million in the first six months of 2007 due to

the addition of Noven Therapeutics. General and administrative expenses

increased 49% to $15.9 million, primarily due to the Daytrana Charge and

the addition of Noven Therapeutics.

Noven recognized $20.7 million in earnings from Novogyne in the first

half of 2008, an increase of 47% from the $14.1 million recognized in

the first half of last year.

Novogyne’s net income for the first six

months of 2008 was $48.3 million, a 37% increase from the $35.2 million

reported in the same period last year. Novogyne’s

net revenues for the first six months of 2008 increased 20% to $83.3

million. Novogyne’s gross margin for the

first six months of 2008 increased slightly to 80%, and its selling,

general and administrative expenses decreased 5% to $18.8 million.

Noven Balance Sheet

At June 30, 2008, Noven had $35.4 million in cash and cash equivalents

and $17.5 million in investments in auction rate securities (“ARS”),

representing an aggregate $52.9 million in cash, cash equivalents and

investments in ARS. This compares with $14.0 million in cash and cash

equivalents and $54.4 million in investments in ARS at December 31,

2007, representing an aggregate $68.4 million in cash, cash equivalents

and investments in ARS. In July 2008, Noven established a $15.0 million

revolving credit facility. As of the date of this press release, no

amounts had been borrowed pursuant to the credit facility.

Noven’s investments in ARS at June 30, 2008

had a fair value of $17.5 million and all were classified as non-current

on Noven’s balance sheet following failed

auctions occurring since February 2008. Noven’s

ARS are collateralized primarily by tax-exempt municipal bonds, and to a

lesser extent, guaranteed student loans. Noven does not hold any ARS

collateralized by mortgages or collateralized debt obligations. Noven

believes its ARS are of high credit quality, as nearly 80% carry an AAA

or AA credit rating, and all are considered investment grade securities.

Noven had recorded a temporary change in fair value of $0.5 million

relating to its investments in ARS in the first quarter of 2008; no

additional change in fair value was required in the 2008 second quarter.

In early August 2008, Noven was advised that Shire’s

net sales of Daytrana had triggered the third and final $25 million

milestone due to Noven. Under Noven’s

agreement with Shire, the $25 million milestone is due to be paid in the

third quarter of 2008. As with prior Daytrana sales milestones, Noven

expects to defer recognition of the latest sales milestone and recognize

it as license revenue over time.

Non-GAAP Financial Information

Under accounting principles generally accepted in the U.S. (“GAAP”),

“net income” and “diluted

earnings per share” include all charges for

the periods reported. In addition to results determined in accordance

with GAAP, in this press release Noven has provided net income and

diluted earnings per share for the 2008 periods presented excluding the

Daytrana Charge. Noven believes that comparing Noven’s

period-to-period financial results without giving effect to the Daytrana

Charge may be helpful to investors to permit them to compare Noven’s

period-to-period financial results on a more uniform basis. For the same

reasons, management uses these non-GAAP financial measures to evaluate

Noven’s current performance against its

historical performance and to plan its future business activities. These

measures should not be considered alternatives to measures computed in

accordance with GAAP, nor should they be considered indicators of Noven’s

overall financial performance. Adjusted net income and adjusted diluted

earnings per share are limited by the fact that companies may not

necessarily compute them in the same manner, thereby making these

measures less useful than the same measures calculated in accordance

with GAAP.

Conference Call

A conference call with management relating to Noven’s financial results

will be webcast live at www.noven.com

beginning at 11:00 a.m. Eastern time this morning, August 6. Thereafter,

a rebroadcast of the call will be accessible at the same website for at

least two weeks. A taped replay will be available beginning August 6

through August 8 by calling 877-660-6853 (from within the U.S.) or

201-612-7415 (from outside the U.S.) and entering the access code 286

and conference ID number 290903. The conference call is expected to

contain forward-looking information in addition to that contained in

this press release.

About Noven

Noven Pharmaceuticals, Inc. is a specialty pharmaceutical company

engaged in the research, development, manufacture, marketing and sale of

prescription pharmaceutical products. Noven’s

business and operations are focused in three principal areas –

transdermal drug delivery, the Novogyne joint venture, and Noven

Therapeutics, Noven’s specialty

pharmaceutical unit.

Safe Harbor Statement under the Private Securities Litigation Reform

Act of 1995

Except for historical information contained herein, the matters

discussed in this press release contain forward-looking statements

within the meaning of Section 27A of the Securities Act of 1933 and

Section 21E of the Securities Exchange Act of 1934 that involve

substantial risks and uncertainties. Statements that are not

historical facts, including statements that are preceded by, followed

by, or that include, the words “believes,”

“anticipates,” “plans,”

“expects” or

similar expressions and statements are forward-looking statements. Noven’s

estimated or anticipated future results, product performance or other

non-historical facts are forward-looking and reflect Noven’s

current perspective on existing trends and information. Actual

results, performance or achievements could differ materially from those

contemplated, expressed or implied by the forward-looking statements

contained herein. These forward-looking statements are based

largely on the current expectations of Noven and are subject to a number

of risks and uncertainties that are subject to change based on factors

that are, in many instances, beyond Noven’s control.

By category and not necessarily listed in order of priority, these

risks and uncertainties include: Regulatory Matters – the

risk that Noven’s response to the FDA warning

letter that Noven received in January 2008 may not be acceptable to the

FDA or adequately address the FDA’s concerns,

and in such case, the risk that the FDA may take regulatory action

against Noven, which may include fines, product seizures or recalls,

injunctions, suspension of production and/or the withdrawal of product

approval; and the likelihood that any fine or product recall,

injunction, seizure, suspension of production and/or withdrawal of

product approval would have a material adverse effect on Noven,

including the loss of product sales, potentially significant

costs associated therewith and the potential for litigation related to

this matter; Daytrana – the risk that Noven’s

assessment of the root cause of the Daytrana tight release issue may

prove inaccurate or incomplete; the risk that the solutions currently in

testing to address the Daytrana tight release issue may be costly,

require regulatory approval and take time to implement and the

possibility that such solutions ultimately do not resolve the issue; the

risk that Daytrana could be adversely affected by a number of factors,

including: (i) if Noven is unable to adequately resolve the

Daytrana-related issues raised by the FDA in the warning letter and

August 2007 Form 483, (ii) new market entrants, including from other

ADHD products marketed or under development by Shire, (iii) raw material

supply interruptions and/or the inability to obtain the active

ingredient methylphenidate, and (iv) delays or inability to obtain

necessary DEA methylphenidate procurement quota; the risk that any

adverse effect to the market for Daytrana due to the foregoing or other

factors could adversely affect Noven’s

results of operations and/or its financial position; Noven’s Pipeline

– uncertainties as to the cost, timing and success of ongoing and

planned clinical trials, including with respect to Mesafem, and the risk

that results from early-stage clinical trials may not be indicative of

results in later-stage trials; the unproven safety and efficacy of

products under development; the difficulty of predicting FDA approval of

products, including timing; the possibility that product launches may be

delayed; the risk that any expected period of exclusivity for a new

product may not be realized; unexpected adverse events or side effects

or inadequate efficacy of a product that could delay or prevent

regulatory filings, approval or commercialization, or that could result

in recalls or product liability claims of approved products; the

difficulty of predicting acceptance and demand for new pharmaceutical

products; the impact of competitive products and pricing; the risk that

product acceptance may be less than anticipated as well as risks related

to compliance with extensive, costly, complex and evolving governmental

regulations and restrictions, and reimbursement policies of government

and private health insurers and others; the possibility that patent

applications may not result in issued patents, and that issued patents

may not be enforceable or could be invalidated; the impact of

competitive responses to Noven’s sales,

marketing and strategic efforts, and the risk that Noven’s development

partners may have priorities that are different from or conflict with

those of Noven, which may adversely impact their ability or willingness

to assist in the development and commercialization of Noven’s products

or to continue the development program; Liquidity –

liquidity and investment risks related to Noven’s

auction rate securities, including the risk that Noven’s

liquidity will be adversely affected to the extent that auctions for its

auction rate securities experience further failures and the risk that

Noven would be required to record an additional impairment charge if

Noven determines that it is necessary to lower the carrying value of its

auction rate securities to reflect the prevailing fair market value; HT

Market – risks associated with increased competition in the HT

market; any further impact on Noven’s HT

business due to the announcement of additional negative clinical results

or otherwise, which could reduce or eliminate any profit contribution by

Novogyne to Noven and/or sales of HT products from Noven to Novogyne and

Novartis Pharma; the risk that Novogyne may not be able to realize the

full value of the marketing rights for Noven’s CombiPatch^®

product; and risks and uncertainties related to the fact that

Vivelle-Dot comprises a substantial majority of Novogyne’s aggregate

total prescriptions. For additional information regarding these

and other risks associated with Noven’s

business, readers should refer to Noven’s

Annual Report on Form 10-K for the year ended December 31, 2007 as well

as other reports filed from time to time with the Securities and

Exchange Commission. Unless required by law, Noven undertakes no

obligation to publicly update or revise any forward-looking statements,

whether as a result of new information, future events, or otherwise.

Noven Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations Data: (amounts in thousands, except per share) (unaudited)		Three Months Ended June 30,							Six Months Ended June 30,
		2008				2007			2008				2007
Revenues:
Product revenues – Novogyne:
Product sales, net		$	5,553			$	4,804		$	7,984			$	10,173
Royalties			2,349				1,899			4,529				3,664
Total net product revenues – Novogyne			7,902				6,703			12,513				13,837
Product revenues, net – third parties			11,641				8,359			23,226				16,831
Total net product revenues			19,543				15,062			35,739				30,668
License and contract revenues			5,060				3,777			10,346				7,486
Total net revenues			24,603				18,839			46,085				38,154
Costs and Expenses:
Cost of products sold – Novogyne			3,463				3,285			6,789				6,244
Cost of products sold – third parties			9,320				6,029			17,303				11,997
Total cost of products sold			12,783				9,314			24,092				18,241
Research and development			3,293				3,185			6,612				6,651
Selling and marketing			5,336				221			10,159				461
General and administrative			8,906				5,488			15,928				10,669
Total costs and expenses			30,318				18,208			56,791				36,022
Income (loss) from operations			(5,715	)			631			(10,706	)			2,132
Equity in earnings of Novogyne			12,429				9,174			20,696				14,077
Interest income, net			500				1,813			1,122				3,445
Income before income taxes			7,214				11,618			11,112				19,654
Provision for income taxes			2,704				4,042			4,010				7,042
Net income		$	4,510			$	7,576		$	7,102			$	12,612
Basic earnings per share		$	0.18			$	0.31		$	0.29			$	0.51
Diluted earnings per share		$	0.18			$	0.30		$	0.29			$	0.50
Weighted average number of common shares outstanding:
Basic			24,603				24,832			24,582				24,785
Diluted

Noven Pharmaceuticals, Inc., Miami Joseph C. Jones, Vice President – Corporate Affairs 305-253-1916