NitroMed Announces Agreement to Sell BiDil® Drug Business to JHP Pharmaceuticals, LLC

Business Wire, Oct 23, 2008

-- NTMD Reports Financial Results for Third Fiscal Quarter 2008 --

-- Conference Call and Webcast to be Held Today at 10:00 AM ET--

LEXINGTON, Mass. -- NitroMed, Inc. (NASDAQ:NTMD) today announced that JHP Pharmaceuticals, LLC, a privately held specialty pharmaceutical company, has agreed to acquire substantially all of the assets related to NitroMed's BiDil([R]) drug business. The purchase and sale agreement between the companies provides that NitroMed will receive consideration of $24.5 million in cash, subject to an accounts receivable adjustment, plus up to an additional $1.8 million for closing date inventory. JHP will assume all but specified liabilities related to the transferred assets. BiDil (isosorbide dinitrate/hydralazine hydrochloride) is an orally-administered medicine approved in the United States for the treatment of heart failure in self-identified black patients as an adjunct to current standard therapies.

Closing Conditions and Stockholder Approval

The asset sale transaction is subject to specified closing conditions, including: that NitroMed's stockholders approve the transaction; that regulatory and other consents are obtained from third parties; and other customary closing conditions. The obligation of JHP to complete the transaction is also subject to the absence of changes or circumstances that are materially adverse to the business, financial condition or results of operations of the BiDil drug business as a whole or that materially impair the ability of NitroMed to complete the transaction. NitroMed's obligation to complete the asset sale is subject to the absence of a material adverse effect on the ability of JHP to complete the purchase of the assets.

NitroMed and JHP currently expect to complete the transaction in early 2009.

The transaction must be approved by a majority of the holders of NitroMed's outstanding common stock. To that end, and as described further below, NitroMed expects to hold a special meeting of stockholders and in connection therewith to mail to its stockholders a proxy statement that will provide additional information concerning the transaction.

Certain funds affiliated with HealthCare Ventures LLC, Rho Ventures and Invus Public Equities, L.P., together owning or controlling an aggregate of approximately 28% of NitroMed's common stock, have agreed with JHP to vote their shares in favor of the transaction.

"We're pleased to have signed a deal to sell the BiDil drug business with a well-positioned firm like JHP Pharmaceuticals. As previously announced, Cowen and Company acted and continues to serve as our exclusive financial advisor and we believe that this deal represents an important step in maximizing shareholder value. NitroMed's activities after the transaction will continue to be focused on seeking to maximize shareholder value by combining, through one or more strategic transactions, with companies that have significant unrealized value or growth potential," said Kenneth M. Bate, NitroMed's President, Chief Executive Officer and interim Chief Financial Officer.

NitroMed's strategic alternatives may also involve the divestiture of some or all of its business. If the company is unable to successfully consummate one or more of such strategic alternatives, it may be required to cease its operations.

Important Additional Information about the Asset Sale will be filed with the SEC

NitroMed plans to file with the U.S. Securities and Exchange Commission (SEC) and mail to its stockholders a proxy statement in connection with the transaction. The proxy statement will contain important information about NitroMed and related matters. Investors and security holders are urged to read the proxy statement carefully when it is available.

Investors and security holders will be able to obtain free copies of the proxy statement and other documents filed with the SEC by NitroMed through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders will be able to obtain free copies of the proxy statement from NitroMed by contacting NitroMed, Inc., Attn: Secretary, 45 Hayden Avenue, Suite 3000, Lexington, MA 02421.

NitroMed, and its directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transaction contemplated by the asset sale agreement. Information regarding NitroMed's directors and executive officers is contained in NitroMed's Annual Report on Form 10-K for the year ended December 31, 2007 and its proxy statement dated April 16, 2008, which are filed with the SEC. As of September 30, 2008, NitroMed's directors and executive officers beneficially owned approximately 30,927,803 shares, or approximately 33%, of NitroMed's common stock.

Financial Results for Third Fiscal Quarter 2008

NitroMed also reported today its financial results for the three quarter and nine months ended September 30, 2008.

Total revenues for the three months ended September 30, 2008 were $4.0 million, compared to $3.8 million for the same period in 2007, an increase of $0.2 million, or 6%. For the nine months ended September 30, 2008, total revenues were $11.8 million, compared to $11.0 million for the same period in 2007, an increase of $0.8 million, or 7%. Sales of BiDil accounted for all revenues during both periods.