Accentia Biopharmaceuticals, Inc. (Nasdaq:ABPI) is committed to building significant value for its stockholders through the commercialization of patent-protected disruptive healthcare technologies designed to be positioned as leading products for the treatment of a broad range of chronic, debilitating and life-threatening diseases including respiratory, autoimmune and cancer indications. The Company generated more than $18 million in revenues in fiscal-year 2007, primarily based on sales of its marketed specialty pharmaceutical products and its analytical consulting business serving biopharmaceutical clients. 
Accentia is advancing a portfolio of potential blockbuster drug candidates which target multi-billion dollar market opportunities. These late-stage products include: BiovaxID®, a novel anti-idiotype cancer vaccine for the treatment of B-cell malignancies including indolent follicular non-Hodgkin’s lymphoma; Revimmune™, a novel ultra-high-dose formulation of a previously approved chemotherapeutic agent expected to show utility in the treatment of up to 80 autoimmune diseases, with an initial focus on multiple sclerosis; and SinuNase™, a novel formulation of a previously approved anti-fungal for the topical, intranasal treatment of chronic sinusitis. 
Accentia’s interest in BiovaxID is based on its majority ownership stake in Biovest International, Inc. (OTCBB:BVTI), and Accentia also maintains a royalty interest in Biovest’s biologic products. Accentia is a portfolio company of the Hopkins Capital Group. 

http://www.accentia.net

Accentia is primarily focused on the commercialization of its three late-stage potential blockbuster therapeutics which are in or entering Phase 3 clinical trials including: BiovaxID™, a personalized anti-cancer vaccine initially targeting indolent follicular non-Hodgkin’s lymphoma; Revimmune™ (ultra-high-dose cyclophosphamide) targeting the treatment of up to 80 autoimmune diseases, with an initial indication of multiple sclerosis; and SinuNase™ for the treatment of chronic sinusitis. 

Significant recent milestones include: 

BiovaxID Phase 3 results demonstrated a clinically and statistically significant improvement of disease-free survival, providing highly encouraging safety and efficacy data which is expected to provide the basis for seeking accelerated and/or conditional approvals in the U.S. and Europe, respectively. Discussions are now planned with the FDA as to the pathway to commercialization of BiovaxID. 
Leading researchers at Johns Hopkins University published unprecedented study results in the treatment of multiple sclerosis, showing therapy with Revimmune to be capable of restoring physical and neurological functions with the potential to eliminate autoimmunity. Preparations are now ongoing to file an Investigational New Drug Application (IND) in order to commence a Phase 3 clinical trial. 
Based on these key achievements, Accentia and Biovest are currently engaged in discussions and negotiations with regards to securing strategic alliances and licensing agreements for its products. 

Financial Review:

Accentia has two operating segments consisting of specialty pharmaceuticals (Accentia Pharmaceuticals) and product development and market services (Analytica International). Accentia also has an approximate 76% interest in Biovest International, Inc. (OTCBB:BVTI), which is consolidated for reporting purposes with Accentia’s product development and market service business. 

On a fully consolidated basis, including Biovest, net revenues for the three months ended June 30, 2008 were $3.0 million, compared with $3.8 million for the same period ended June 30, 2007. The decrease in net revenues was attributed to a slight decrease in net sales reported by our subsidiaries Biovest and Analytica and our specialty pharmaceuticals division. 

Consolidated research and development costs were $1.6 million for the third fiscal quarter, compared with $5.2 million for the same fiscal quarter in 2007. This 70% decrease was largely due to our Biovest subsidiary reducing research and development expenses as its clinical trial costs have declined considerably, as a result of our decision, based on the independent Data Monitoring Committee’s recommendation, to stop the BiovaxID Fast-Tracked Phase 3 study early, and seek accelerated and/or conditional approval with the FDA and European regulatory authorities. There was also a decrease in SinuNase research and development expenses due to the completion of its Fast-Tracked Phase 3 clinical trial, which demonstrated statistically significant objective evidence based on secondary endpoint analysis measuring the most severe cases of polyposis and inflammation. The Company is continuing to analyze the Phase 3 SinuNase results to determine the optimal course for future clinical development. 

Accentia’s second quarter net loss, on a fully consolidated basis, including Biovest, was $11.4 million, compared to $25.0 million reported for the same three month period in fiscal 2007. Of this loss, approximately $6.6 million was due to non-cash charges. The operating loss, on a fully consolidated basis, was $7.3 million as compared to $12.6 million for the comparable quarter in 2007, representing a 42% reduction, as the Company’s developmental pipeline matures. 

The fully consolidated loss per share for the quarter was $0.25, of which $0.08 per share was attributed to Biovest, which is consolidated in Accentia’s financial statements. Since February 2007, Biovest has been self-funded. For the comparable 2007 quarter, the fully consolidated loss per share was $0.71 of which $0.34 per share was attributed to Biovest. The Company notes that the operating loss for Biovest has been substantially reduced in part due to Biovest’s decision, based on the independent Data Monitoring Committee’s recommendation, to stop enrollment in the BiovaxID Fast-Tracked Phase 3 study and seek accelerated and/or conditional approval with the FDA and European regulatory authorities. 

At June 30, 2008, Accentia had approximately $4.5 million in cash. With the recent positive results reported for BiovaxID and Revimmune, Accentia and Biovest are currently evaluating new financing opportunities, including potential partnering and licensing agreements which are expected to be significant commercial events, providing access to additional sources of capital. 

Accentia also reported that on August 13, 2008, the Company received notice from Nasdaq that it is not in compliance with Nasdaq Marketplace Rule 4450(a)(5) because shares of its common stock had closed at a per share bid price of less than $1.00 for 30 consecutive business days. Accentia will be provided with 180 calendar days, or until February 9, 2009, to regain compliance, which would be accomplished when Accentia’s common stock closing bid price is $1.00 per share or more for a minimum of ten consecutive business days. If the Company does not regain compliance by February 9, 2009, the Nasdaq staff will notify the Company that its common stock will be delisted. In that event and at that time, the Company may appeal Nasdaq’s delisting determination to a Nasdaq Listing Qualifications Panel. This notification has no effect on the listing of Accentia’s common stock at this time. 

Accentia expects to regain compliance within this 180 day cure period and will consider alternatives to address compliance with the continued listing standards of The Nasdaq Stock Market.