Immune Pharmaceuticals and EpiCept Corporation Agree to Merge

HERZLIYA-PITUACH, Israel & TARRYTOWN, N.Y.--(BUSINESS
WIRE (http://www.businesswire.com/))-- Regulatory News:

Immune Pharmaceuticals Ltd. (“Immune”), a privately held Israeli company, and
EpiCept Corporation (“EpiCept”) (NASDAQ OMX Stockholm Exchange and OTCQX: EPCT)
today announced that they have entered into a definitive merger agreement. The
transaction is anticipated to close during the first quarter of 2013 and is
subject to satisfaction of certain customary closing conditions, including the
approval of a majority of EpiCept shareholders.

The combined company, to be named Immune Pharmaceuticals, Inc. (“Immune
Pharmaceuticals”), will be primarily focused on developing antibody therapeutics
and other targeted drugs for the treatment of inflammatory diseases and cancer.
Immune’s lead product candidate, bertilimumab, is a full human monoclonal
antibody that targets eotaxin-1, a chemokine involved in eosinophilic
inflammation, angiogenesis and neurogenesis. Immune is currently initiating a
placebo-controlled, double-blind Phase II clinical trial with bertilimumab for
the treatment of ulcerative colitis.

The companies’ collective oncology portfolios comprise: Immune’s NanomAbs®, a
new generation of antibody drug conjugates, and EpiCept’s vascular disruptive
agents. Immune Pharmaceuticals will continue efforts to secure a partner for
EpiCept’s Phase III clinical development candidate AmiKet™, for which efficacy
has been demonstrated for the treatment of chemotherapy-induced neuropathic pain
and post-herpetic neuralgia. Daniel Teper, PharmD, CEO of Immune and Robert
Cook, Interim President and CEO of EpiCept, jointly commented: "This transaction
will create a publicly traded specialty biopharmaceutical company with a
portfolio of four clinical-stage drug candidates for the treatment of
inflammatory diseases and cancer. Immune's bertilimumab, a first in class
monoclonal antibody, is being evaluated clinically to address unmet medical
needs in multiple severe disease indications. EpiCept's Amiket™ has clinical
data in over 1600 patients in various neuropathies, Fast Track designation and
Phase III Special Protocol Assistance from the U.S. Food and Drug Administration
as well as a defined clinical path through the European Medicines Agency for the
treatment of chemotherapy induced neuropathic pain."

Merger Details

The terms of the merger agreement provide for EpiCept to issue shares of its
common stock to Immune shareholders in exchange for all of the outstanding
shares of Immune, with EpiCept shareholders retaining approximately 22.5 percent
ownership of the combined company and Immune shareholders receiving
approximately 77.5 percent, calculated on an adjusted fully diluted basis. Dr.
Daniel Teper will become the Chairman and Chief Executive Officer of Immune
Pharmaceuticals, which will have dual headquarters in Herzliya-Pituach, Israel
and in the New York City area, with research laboratories in Rehovot, Israel.
Dr. David Sidransky, Director of Head and Neck Research Division, Professor of
Oncology at the Johns Hopkins School of Medicine, and a former Vice Chairman of
the Board of Directors of ImClone Systems, will be the Vice Chairman of the
Board of Immune Pharmaceuticals. The combined company’s board of directors will
consist of not more than six current Immune directors and at least one current
EpiCept director. The Immune Pharmaceuticals management team will include Robert
Cook, EpiCept’s Interim Chief Executive Officer, who will become the combined
company’s Chief Financial Officer, and Stephane Allard, M.D., EpiCept’s Chief
Medical Officer, who will become Immune Pharmaceutical’s Chief Medical Officer.
Serge Goldner, Chief Financial Officer of Immune will take the new role of
Executive Vice President and Chief Operating Officer. Suzy Jones, a former
Genentech executive, and Myrtle Potter & Company will continue to advise Immune
Pharmaceuticals on business development and the combined company’s Scientific
Board will be jointly led by Professor Marc Rothenberg (Cincinnati Children’s
Hospital) and Professor Shimon Benita (Hebrew University).

SunTrust Robinson Humphrey served as financial advisor to EpiCept. ROTH Capital
Partners served as financial advisor to Immune.

Additional Information

In connection with the proposed transaction, EpiCept will file a proxy statement
with the U.S. Securities and Exchange Commission (SEC) seeking appropriate
shareholder approval. SHAREHOLDERS OF EPICEPT AND OTHER INVESTORS ARE URGED TO
READ THE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS TO THE PROXY
STATEMENT) REGARDING THE PROPOSED TRANSACTION WHEN IT BECOMES AVAILABLE BECAUSE
IT WILL CONTAIN IMPORTANT INFORMATION. EpiCept’s shareholders will be able to
obtain a copy of the proxy statement, as well as other filings containing
information about Immune and EpiCept, without charge, at the SEC’s Internet site
(www.sec.gov (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fww
w 
.sec.gov&esheet=50470737&lan=en
-US&anchor=www.sec.gov&index=1&md5=87bf6d6d3174024cd2425cfe943e4e69)). Copies of
the proxy statement and the filings with the SEC that will be incorporated by
reference in the proxy statement can also be obtained, without charge, by
directing a request to EpiCept Corporation, 777 Old Saw Mill River Rd,
Tarrytown, NY 10591, Attention: Investor Relations, Telephone: (914) 606-3500.

Participants in the Solicitation

EpiCept and its directors and executive officers and Immune and its directors
and executive officers may be deemed to be participants in the solicitation of
proxies from the shareholders of EpiCept in connection with the proposed
transaction. Information regarding the special interests of these directors and
executive officers in the merger transaction will be included in the proxy
statement of EpiCept referred to above. Additional information regarding the
directors and executive officers of EpiCept is also included in EpiCept’s proxy
statement for its 2011 Annual Meeting of Stockholders, which was filed with the
SEC on April 28, 2011. Additional information regarding the directors and
executive officers of EpiCept is also included in EpiCept’s registration
statement Post-Effective Amendment No. 1 to Form S-3 on Form S-1, which was
filed with the SEC on April 6, 2012. These documents are available free of
charge at the SEC’s web site
(www.sec.gov (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%2F%2Fww
w 
.sec.gov&esheet=50470737&lan=en
-US&anchor=www.sec.gov&index=2&md5=310dfa05cff3ecb0ceed766acb5a988e)) and from
Investor Relations at EpiCept at the address described above.

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities Act of 1933,
as amended (the “Act”). The securities issued in exchange for all of the
outstanding shares of Immune will not be and have not been registered under the
Act and may not be offered or sold in the United States absent registration or
an applicable exception from registration requirements.

The merger agreement and any accompanying issuance of shares by Immune
Pharmaceuticals are not, under any circumstances, to be construed as an
advertisement or a public offering of securities in Israel. Any public offer or
sale of securities in Israel may be made only in accordance with the Israeli
Securities Act-1968 (which requires, inter alia, the filing of a prospectus in
Israel or an exemption therefrom).

About Immune Pharmaceuticals Ltd.

Immune Pharmaceuticals Ltd. is an Israel and U.S.-based biopharmaceutical
company, focused on the development of next generation antibody therapeutics
addressing unmet medical needs in the treatment of inflammatory diseases and
cancer. Immune licensed worldwide rights for systemic indications of
Bertilimumab from iCo Therapeutics (TSX:ICO) in June 2011, while iCo retained
rights to all ophthalmic indications. iCo originally licensed the exclusive
world-wide rights to Bertilimumab in 2006 from MedImmune Limited (formerly known
as Cambridge Antibody Technology Limited), the global biologics unit of
AstraZeneca. Additionally, Immune has licensed from Yissum, the Technology
Transfer Company of the Hebrew University of Jerusalem, the injectable
applications of the antibody nanoparticle conjugate technology (NanomAbs®)
developed by Professor Shimon Benita. For more information, visit the Immune
website
at: www.immunepharmaceuticals.com (http://cts.businesswire.com/ct/CT?id=smartlin
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&url=https%3A%2F%2Fwebmail.gtlaw.com%2Fexchweb%2Fbin%2Fredir.asp%3FURL%3Dhttp%3A
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2F%2Fwww.immunepharmaceuticals.com%2F&esheet=50470737&lan=en
-US&anchor=www.immunepharmaceuticals.com&index=3&md5=b32cd18295f2727e5f2e72014ed
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About EpiCept Corporation

EpiCept is focused on the development and commercialization of pharmaceutical
products for the treatment of pain and cancer. The Company's pain portfolio
includes AmiKet™, a prescription topical analgesic cream in late-stage clinical
development designed to provide effective long-term relief of pain associated
with peripheral neuropathies. The Company's product Ceplene®, when used
concomitantly with low-dose IL-2 is intended as remission maintenance therapy in
the treatment of AML for adult patients who are in their first complete
remission. The Company sold all of its rights to Ceplene® in Europe and certain
Pacific Rim countries and a portion of its remaining Ceplene® inventory to Meda
AB in June 2012. Ceplene® is licensed to MegaPharm Ltd. to market and sell in
Israel and EpiCept has retained its rights to Ceplene® in all other countries,
including countries in North and South America. The Company has other oncology
drug candidates in clinical development that were discovered using in-house
technology and have been shown to act as vascular disruption agents in a variety
of solid tumors. For more information, visit the EpiCept website
at: www.epicept.com (http://cts.businesswire.com/ct/CT?id=smartlink&url=http%3A%
2 
F%2Fwww.epicept.com&esheet=50470737&lan=en
-US&anchor=www.epicept.com&index=4&md5=15029e755c2ae85278fbb156a3f27d79)

Forward-Looking Statements

This news release contains certain forward-looking statements that involve risks
and uncertainties that could cause actual results to be materially different
from historical results or from any future results expressed or implied by such
forward-looking statements. Such forward-looking statements include statements
regarding the proposed transaction, the efficacy, safety, and intended
utilization of the companies’ respective product candidates, the conduct and
results of future clinical trials, and plans regarding regulatory filings,
future research and clinical trials and plans regarding partnering
activities. Factors that may cause actual results to differ materially include
the risk that Immune and EpiCept may not be able to complete the proposed
transaction, the risk that product candidates that appeared promising in early
research and clinical trials do not demonstrate safety and/or efficacy in larger
-scale or later clinical trials, the risk that Immune and EpiCept will not
obtain approval to market their respective products, the risks associated with
reliance on outside financing to meet capital requirements, and the risks
associated with reliance on collaborative partners for further clinical trials,
development and commercialization of product candidates. You are urged to
consider statements that include the words “may,” “will,” “would,” “could,”
“should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,”
“anticipates,” “intends,” “continues,” “forecast,” “designed,” “goal,” or the
negative of those words or other comparable words to be uncertain and forward
-looking. The transaction is subject to customary closing conditions, including
approval of EpiCept’s shareholders. These factors and others are more fully
discussed in EpiCept’s periodic reports and other filings with the SEC.

Note: The EpiCept logo is a trademark of EpiCept. The Immune logo is a trademark
of Immune.
Immune Pharmaceuticals:
Serge Goldner, CFO
Tel: +972 9 886-6612
serge.goldner@immunepharma.com
or
New York Office:
Anna Baran – Director of Corp. Development
Tel: (646) 937-1941
anna.baran@immunepharma.com
or
EpiCept Corporation:
Robert W. Cook, CEO
Tel: (914) 606-3500
rcook@epicept.com