VioQuest Pharmaceuticals, Inc. Announces Second Quarter and Six Month 2007 Results

BASKING RIDGE, N.J., Aug. 14 /PRNewswire-FirstCall/ -- VioQuest Pharmaceuticals , a New Jersey-based biopharmaceutical company focused on acquiring, developing and commercializing targeted cancer compounds, announced today financial results for the three and six months ended June 30, 2007. The Company reported a loss from continuing operations for the three months ended June 30, 2007, of $2.1 million, or $0.04 per share compared to a loss of $1.4 million, or $0.04 per share in the same period a year earlier. For the six months ended June 30, 2007, the Company reported a loss from continuing operations of $4.4 million, or $0.10 per share, compared to a loss of $2.5 million, or $0.06 per share in the first six months of fiscal 2006. The increased loss from continuing operations was primarily due to higher research and development expenses as a result of increased clinical activities for VQD-002, Lenocta(TM) and the acquisition of Xyfid(TM).

(Logo: http://www.newscom.com/cgi-bin/prnh/20070117/NYW085LOGO )

"We believe that the sale of Chiral Quest and the recent financing positions the Company well for our multiple clinical milestones we expect to achieve during the balance of 2007 and the first half of 2008," said Daniel Greenleaf, VioQuest Pharmaceutical's president and CEO. "We look forward to continuing to validate the promising results that our compounds have demonstrated so far in clinical trials."

2007 Accomplishments: -- Appointment of New Chief Scientific Officer. The Company appointed Edward Bradley, M.D. as Chief Scientific Officer. Dr. Bradley joins VioQuest from Berlex Laboratories, a wholly-owned US subsidiary of Schering AG, (now Bayer-Schering Pharma) where he held the position of Chief Medical Officer and reported to the President of Berlex Laboratories. He had direct responsibility for all aspects of clinical drug development and medical affairs from Phase I through Phase IV, professional services, corporate product safety, biometrics, medical communications, and medical governance. -- Strengthening of Balance Sheet. VioQuest strengthened its balance sheet, raising gross proceeds of $5.4 million through the sale of its Chiral Quest subsidiary and through the issuance of senior convertible promissory notes. -- New Product Acquisitions and Developments. The Company acquired exclusive license rights to Xyfid(TM), an adjunctive therapy for a common and serious side effect of cancer chemotherapy. Xyfid(TM) is a topical therapy which has shown early clinical promise in the treatment and prevention of Hand-Foot Syndrome (HFS), a common, often dose- limiting and potentially life-threatening complication associated with high dosage of chemotherapy therapies such as capecitabine (Xeloda) or fluorouracil (5-FU). Currently, 83,000 patients in the United States are treated annually with 5-FU and 26,000 patients with Xeloda; up to 60% of those taking Xeloda develop HFS. Additionally, the Company added VQD-002-Oral, an orally bioavailable pro-drug analog of VQD-002 (triciribine-phosphate), into its clinical development pipeline. -- New Data Presented at AACR Annual Meeting. The Company presented promising data at the American Association for Cancer Research's (AACR) Annual Meeting from its pre-clinical studies of VQD-002, a direct inhibitor of Akt activation for the treatment of solid and hematologic tumors in combination with Cdk9, another targeted agent. The compound repressed the growth of specific prostate cancer cells in vivo. Corporate Objectives For The Balance of 2007 Include: -- VioQuest expects to complete enrollment of its three corporate sponsored Phase I clinical trials. -- VioQuest expects to file an NDA for Lenocta(TM) for the treatment of leishmaniasis, a disfiguring and potentially fatal parasitic disease which has infected soldiers in Iraq and Afghanistan. As many as 20 million people are infected worldwide. VioQuest plans to file a New Drug Application (NDA) for Lenocta(TM) in 2007 for the leishmaniasis indication, based on trial data conducted by the U.S. Army at Walter Reed Army Hospital. -- VioQuest anticipates initiating several combination and monotherapy Phase II trials with VQD-002 and Lenocta in both solid and hematological malignancies. -- The Company expects to provide data for its clinical trials at the European Organization for the Research and Treatment of Cancer (EORTC) being held in October in San Francisco, California, and the American Society of Hematology (ASH) in December in Atlanta, Georgia.

About VioQuest Pharmaceuticals

VioQuest Pharmaceuticals, Inc. www.vioquestpharm.com focuses on acquiring, developing, and commercializing targeted late preclinical and early clinical stage therapies with unique mechanisms of action primarily for oncology and infectious diseases. VioQuest has three targeted drug candidates in clinical trials: VQD-002 which inhibits activation of Akt that is seen at abnormally high levels in breast, ovarian, colorectal, pancreatic, and hematologic tumors; Lenocta(TM), an inhibitor of specific protein tyrosine phosphatases, which has shown compelling preclinical activity in both renal and melanoma cancers and Xyfid(TM), a topical therapy which has shown early clinical promise in the treatment and prevention of chemo-induced Hand-Foot Syndrome. In addition, VioQuest and the U.S. Army are planning to submit an NDA to the FDA in 2007 for Lenocta(TM) for the treatment of leishmaniasis. VioQuest anticipates commencing seven Phase II trials for VQD-002, Lenocta(TM) and Xyfid(TM) in 2007.

Forward-Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties that could cause VioQuest's actual results and experiences to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as anticipates, expects, plans, believes, intends, and similar words or phrases. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements. In addition, this press release also includes forward-looking statements regarding the timing, progress and results of the clinical development, regulatory processes, potential clinical trial initiations, potential IND and NDA filings and commercialization efforts of VioQuest's drug development product candidates. These statements are subject to various risks and uncertainties and include the possibility that the results of clinical trials will not support VioQuest's claims, the possibility that VioQuest's development efforts relating to its product candidates, including Lenocta(TM), VQD-002, and Xyfid(TM) will not be successful, the inability to obtain regulatory approval of VioQuest's product candidates, VioQuest's reliance on third-party researchers to develop its product candidates, its lack of experience in developing and commercializing pharmaceutical products, and the possibility that its licenses to develop and commercialize its product candidates may be terminated. Additional risks are described in VioQuest's Annual Report on Form 10-KSB for the year ended December 31, 2006. VioQuest assumes no obligation and does not intend to update these forward-looking statements, except as required by law.

VIOQUEST PHARMACEUTICALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2007 (UNAUDITED) AND DECEMBER 31, 2006 June 30, December 31, 2007 2006 (Unaudited) (Note 1A) ASSETS CURRENT ASSETS Cash and cash equivalents $2,830,855 $2,931,265 Prepaid clinical research costs 227,263 273,172 Deferred financing costs 601,875 - Other current assets 104,006 168,841 Current assets associated with discontinued operations 1,879,133 2,396,435 Total Current Assets 5,643,132 5,769,713 PROPERTY AND EQUIPMENT, NET 35,976 43,378 SECURITY DEPOSITS 15,232 15,232 TOTAL ASSETS $5,694,340 $5,828,323 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $2,222,982 $1,031,458 Accrued compensation and related taxes 135,224 245,475 Other accrued expenses 451,836 180,440 Note payable - Paramount BioSciences, LLC 164,623 264,623 Convertible notes, net of unamortized debt discount of $1,180,668 1,786,832 - Current liabilities associated with discontinued operations 871,754 1,265,568 TOTAL LIABILITIES 5,633,251 2,987,564 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock; $0.001 par value: 10,000,000 shares authorized, 0 shares issued and outstanding at June 30, 2007 and December 31, 2006 - - Common stock; $0.001 par value: 100,000,000 shares authorized at June 30, 2007 and December 31, 2006, 54,621,119 shares issued and outstanding at June 30, 2007 and December 31, 2006 54,621 54,621 Additional paid-in capital 33,537,551 31,326,694 Accumulated deficit (33,531,083) (28,540,556) Total Stockholders' Equity 61,089 2,840,759 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,694,340 $5,828,323 VIOQUEST PHARMACEUTICALS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006 (UNAUDITED) For the Three For the Three For the Six For the Six Months Ended Months Ended Months Ended Months Ended June 30, June 30, June 30, June 30, 2007 2006 2007 2006 REVENUE - - - - OPERATING EXPENSES Research and development $950,844 $327,055 $2,319,655 $616,701 Selling, general and administrative 1,192,399 1,082,480 2,106,050 1,851,835 Total Operating Expenses 2,143,243 1,409,535 4,425,705 2,468,536 LOSS FROM OPERATIONS (2,143,243) (1,409,535) (4,425,705) (2,468,536) INTEREST INCOME, NET 6,391 2,084 32,075 49,115 LOSS FROM CONTINUING OPERATIONS (2,136,852) (1,407,451) (4,393,630) (2,419,421) LOSS FROM DISCONTINUED OPERATIONS (335,422) (410,900) (596,897) (1,260,677) NET LOSS $(2,472,274) $(1,818,351) $(4,990,527) $(3,680,098) NET LOSS PER COMMON SHARE: CONTINUING OPERATIONS $(0.04) $(0.04) $(0.10) $(0.06) DISCONTINUED OPERATIONS (0.01) (0.01) (0.01) (0.04) NET LOSS PER SHARE - BASIC AND DILUTED $(0.05) $(0.05) $(0.11) $(0.10) WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED 46,056,724 38,165,124 46,056,724 38,165,124 Contact information: Daniel Greenleaf President and CEO 908-766-4400 ext. 115 dan.greenleaf@vioquestpharm.com Brian Lenz Chief Financial Officer 908-766-4400 ext. 117 brian.lenz@vioquestpharm.com

CONTACT: Daniel Greenleaf, President and CEO, +1-908-766-4400 ext. 115,dan.greenleaf@vioquestpharm.com, or Brian Lenz, Chief Financial Officer,+1-908-766-4400 ext. 117, brian.lenz@vioquestpharm.com, both of VioQuestPharmaceuticals

Web site: http://www.vioquestpharm.com/