EPIX Pharmaceuticals Secures Committed Equity Financing Facility

Business Wire, August 5, 2008

Financing Facility May Provide Up To $50 Million of Capital

LEXINGTON, Mass. -- EPIX Pharmaceuticals, Inc. (NASDAQ:EPIX), a biopharmaceutical company focused on discovering and developing novel therapeutics through the use of its proprietary and highly efficient in silico drug discovery platform, announced today that it has entered into a Committed Equity Financing Facility (CEFF) with Kingsbridge Capital Limited, a private investment group. Under the terms of the agreement, Kingsbridge has committed to provide up to $50 million of capital during the next three years through the purchase of newly issued shares of EPIX common stock. The maximum number of shares that can be sold by EPIX under this agreement is approximately 8.3 million shares. EPIX will determine the exact timing and amount of any CEFF financings, subject to certain conditions. The actual amount of funds that can be raised under this agreement will be dependent on the number of shares actually sold under the agreement and the market value of EPIX stock during the pricing periods of each sale.

"This financing facility should provide EPIX with additional access to capital as we continue to execute our Vasovist[R] monetization and clinical development strategies," said Kim C. Drapkin, chief financial officer of EPIX. "Based upon the agreement's flexible terms, we will be able to draw down capital to efficiently support our corporate and clinical initiatives. We have recently resubmitted our New Drug Application for Vasovist, initiated our Phase 2b proof-of-concept program for PRX-03140 for the treatment of Alzheimer's disease and expect to commence our Phase 2b trial for PRX-08066 for the treatment of pulmonary hypertension associated with chronic obstructive pulmonary disease. We believe these recent and upcoming milestones illustrate our strong focus on building value through the development of our broad clinical pipeline."

Details of EPIX's CEFF with Kingsbridge are as follows:

* Kingsbridge is committed under the CEFF to purchase the lesser of 8.3 million shares or $50 million of common stock from EPIX. EPIX may access the capital for up to three years after the Securities and Exchange Commission declares effective the registration statement to be filed by EPIX covering the resale of the shares of common stock issuable to Kingsbridge in connection with the CEFF.

* EPIX may access capital under the CEFF in tranches of up to 1.5% of EPIX's market capitalization at the time of the draw down. Alternatively, based upon the company's prior 30-day trading volume, EPIX may have the ability to increase each draw down from 1.5% to up to 3% of its market capitalization at the time of the draw down. Kingsbridge will purchase shares of common stock pursuant to the CEFF at discounts ranging from 6% to 12% depending on the volume-weighted average market price of the common stock during the eight-day pricing period, provided that the minimum acceptable purchase price for any shares to be issued to Kingsbridge during the eight-day period is determined by the higher of $1.25 or 90% of EPIX's common stock closing price the day before the commencement of each draw down.

* EPIX is not obligated to utilize any of the $50 million available under the CEFF and there are no minimum commitments or minimum use penalties. The CEFF agreement does not contain any restrictions on EPIX's operating activities, automatic pricing resets or minimum market volume restrictions.

* The agreement does not prohibit EPIX from conducting additional debt or equity financing, other than financings similar to the CEFF.

* Kingsbridge is restricted from engaging in any shorting transaction of EPIX's common stock.

* In connection with the CEFF, EPIX issued a warrant to Kingsbridge to purchase up to 400,000 shares of common stock at an exercise price of approximately $2.49 per share which represents 125% of the average of the closing prices of the common stock during the five trading days preceding the agreement date. The warrant will become exercisable six months from the date of the agreement and will remain exercisable, subject to certain exceptions, for a period of five years thereafter.

The warrant issued to Kingsbridge and the shares of common stock issuable under the CEFF, and the shares issuable upon the exercise of the warrant, have not been registered under the Securities Act, or state securities laws, and may not be offered or sold in the United States without being registered with the SEC or through an applicable exemption from SEC registration requirements. EPIX has agreed to file a registration statement with the SEC covering the resale of the shares issuable under the CEFF and the shares issuable upon the exercise of the warrant within 60 days of the date of the agreement.

This news release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the securities referred to in this news release in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Any offering of EPIX common stock under the resale registration statement referred to in this news release will be made only by means of a prospectus.