Critical Therapeutics Reports Financial Results for the First Quarter Ended March 31, 2008

Business Wire, May 8, 2008

LEXINGTON, Mass. -- Critical Therapeutics, Inc. (NASDAQ: CRTX), a biopharmaceutical company focused on developing and commercializing innovative products for respiratory and inflammatory diseases, today reported financial results for the first quarter ended March 31, 2008.

Net product sales of ZYFLO CR(TM) (zileuton) extended-release tablets and ZYFLO[R] (zileuton tablets) totaled approximately $3.3 million in the first quarter of 2008, compared with $2.9 million of net product sales of ZYFLO in the first quarter of 2007, an increase of 15 percent. Twice-daily ZYFLO CR was approved by the U.S. Food and Drug Administration (FDA) in May 2007 and commercially launched on September 27, 2007. Critical Therapeutics and Dey, L.P. (DEY), a subsidiary of Mylan Inc., currently market ZYFLO CR to approximately 18,000 physicians across the U.S.

On May 1, 2008, Critical Therapeutics announced the signing of a definitive merger agreement with Cornerstone BioPharma Holdings, Inc., a privately-held specialty pharmaceutical company focused on developing and commercializing prescription medications for respiratory disorders. Under the terms of the agreement, all outstanding shares of Cornerstone's common stock will be converted into and exchanged for shares of Critical Therapeutics' common stock and all outstanding Cornerstone options and warrants will be assumed by Critical Therapeutics and become options and warrants to acquire Critical Therapeutics' common stock. Immediately following the effective time of the merger, the holders of Cornerstone's common stock, options and warrants will own approximately 70 percent, and Critical Therapeutics' stockholders will own approximately 30 percent, of the combined company's common stock, after giving effect to shares issuable under outstanding Cornerstone options and warrants, but excluding shares issuable under outstanding Critical Therapeutics options and warrants.

Consummation of the merger is subject to a number of closing conditions, including the approval of both Critical Therapeutics' stockholders and Cornerstone's stockholders, approval by NASDAQ of the re-listing of Critical Therapeutics' common stock in connection with the merger, the continued availability of Critical Therapeutics' products and other customary closing conditions. On May 2, 2008, Cornerstone's stockholders approved the transaction pursuant to written consents in lieu of a meeting. In addition, Healthcare Ventures and Advanced Technology Ventures, who together hold approximately 19 percent of the issued and outstanding common stock of Critical Therapeutics, have entered into agreements whereby they have agreed to vote their shares in favor of the merger. The Company has determined that the merger is not subject to the filing requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The stock-for-stock transaction is targeted to close in the fourth quarter of 2008.

Financial Results for the Three Months Ended March 31, 2008 and 2007

Revenues

Total revenue for the first quarter of 2008 was $3.3 million, compared with $3.5 million in the first quarter of 2007. Total revenue for the first quarter of 2007 included collaboration and license revenue of $601,000 whereas no collaboration or license revenue was recorded in the first quarter of 2008.

Net product sales in the first quarter of 2008 included approximately $2.6 million in sales of ZYFLO CR and $711,000 in sales of ZYFLO, including a reduction in the return reserve for ZYFLO of approximately $440,000 due to higher than expected prescriptions for ZYFLO. As a result of a change in the Company's revenue recognition policy, net product sales of $2.9 million in the first quarter of 2007 included a one-time increase of $953,000 reflecting shipments to wholesalers in 2006 for units of ZYFLO that had not yet been dispensed through patient prescriptions.

For the three months ended March 31, 2008, the Company posted a net loss of $10.8 million, or $0.25 per share. This compares with a net loss of $4.7 million, or $0.11 per share, for the same period in 2007.

Cash and investments totaled $20.5 million at March 31, 2008, compared with $34.1 million at December 31, 2007 and $46.0 million at March 31, 2007. Net cash expenditures totaled $13.6 million in the first quarter of 2008. Net cash expenditures were $3.1 million in the first quarter of 2007 and were positively impacted by the upfront payment of $3.0 million that Critical Therapeutics received from DEY in connection with the signing of the co-promotion agreement in March 2007. The Company generated $82,000 of net cash in the fourth quarter of 2007, primarily as a result of an upfront payment of $5.0 million that Critical Therapeutics received from DEY in connection with the U.S. launch of ZYFLO CR. As of March 31, 2008, the Company had 43.5 million common shares outstanding, excluding warrants and stock options.

Operating Expenses

Operating expenses for the three months ended March 31, 2008 totaled $14.3 million, compared with $8.7 million in the first quarter of 2007.