Noven Announces 2008 Financial Results

Noven Pharmaceuticals, Inc. (NASDAQ:NOVN) today announced financial
results for the quarter and year ended December 31, 2008.

Earnings Summary

For full year 2008, Noven reported net income of $21.4 million or $0.87
diluted earnings per share. Results for 2008 included the items
described under Financial Results - Special Items below. Excluding those
items and related tax effects, Noven's net income for 2008 was $19.4
million or $0.79 diluted earnings per share.

For the fourth quarter of 2008, Noven reported net income of $9.1
million or $0.37 diluted earnings per share. Excluding the items
described under Financial Results - Special Items below and related tax
effects, Noven's net income for the fourth quarter of 2008 was $5.2
million or $0.21 diluted earnings per share.

Tables reconciling net income and earnings per share on a GAAP basis to
net income and earnings per share as adjusted to exclude the special
items are attached to this press release.

CEO Comment

Peter Brandt, Noven's President & CEO, commented on Noven's business and
results: "In 2008, we made significant progress in advancing our
opportunities and addressing our challenges. Novogyne once again
delivered outstanding results, with our equity in earnings of Novogyne
increasing 27% over 2007 to $45.6 million. At Noven, we strengthened our
balance sheet and cash position, made substantial progress toward a
solution to the Daytrana peel force issue, launched a new product,
refocused and enhanced our transdermal development activities, and
commenced a Phase 2 study for Mesafem - our non-hormonal therapy for
vasomotor symptoms - that should help meet an important patient need.
Across the organization, we prioritized our opportunities and focused
our resources on the disciplined execution of our strategies."

Brandt continued: "We believe our progress in 2008 - and our strategy
and plans for Noven and Novogyne in the current year - position us to
deliver improvement in revenues, profitability, and earnings per share
in 2009, while continuing to invest in Mesafem and other developmental
products that have the potential to meaningfully benefit patients and
reward shareholders for the longer term."

2008 Highlights

Novogyne Growth. At Novogyne
Pharmaceuticals, Noven's joint venture with Novartis Pharmaceuticals
Corporation, net revenues for 2008 increased 15% and net income
increased 25% compared to 2007. Total prescriptions for Novogyne's
Vivelle-Dot(R) product (developed and manufactured by Noven)
increased 6% in 2008 compared to 2007, while total prescriptions in the
U.S. hormone therapy market decreased 5% for the same period. During
2008, Vivelle-Dot increased its share of the transdermal estrogen market
(including patches, creams, gels and sprays) from 53% to 57%, and
increased its share of the overall estrogen therapy market from 10% to
11%.

Daytrana(R) Progress.
In the fourth quarter of 2008, Noven continued its ongoing testing of
the manufacturing solutions intended to address the peel force issue
affecting certain lots of its Daytrana product for Attention Deficit
Hyperactivity Disorder ("ADHD"). Noven believes that test results to
date support its view that the proposed solutions will effectively
address the issue. Subject to FDA review and agreement, Noven expects to
produce Daytrana product incorporating a solution in the third quarter
of 2009. At December 31, 2008, Noven maintained a $3.8 million reserve
related to existing Daytrana product at risk of exceeding the product's
peel force specification. In addition, in the 2008 fourth quarter, Noven
implemented new manufacturing practices and procedures that helped
improve efficiencies associated with existing Daytrana production. Those
efforts, along with a $0.5 million reduction in an existing Daytrana
reserve, contributed to Noven's overall 43% gross margin for the quarter.

Stavzor(R)
Approved & Launched. In July 2008, the FDA granted final
approval of the New Drug Application for Stavzor (valproic acid delayed
release capsules) for the treatment of manic episodes associated with
bipolar disorder, adjunctive therapy in multiple seizure types
(including epilepsy), and prophylaxis of migraine headaches. Noven
Therapeutics commercially launched Stavzor in August 2008.

Pipeline. During 2008, Noven
advanced the following projects in its product development pipeline:

P&GP Collaboration. In August
2008, Noven entered into global license and supply agreements with
Procter & Gamble Pharmaceuticals, Inc. relating to the development and
commercialization of a low-dose testosterone patch for the treatment of
Hypoactive Sexual Desire Disorder and other indications.

Mesafem(TM) Phase 2 Study. In the
fourth quarter of 2008, Noven commenced patient enrollment for a Phase 2
study of Mesafem, Noven's developmental non-hormonal product for
vasomotor symptoms (hot flashes), and Phase 2 study results are expected
to be available in 2009.

Amphetamine Patch. Noven and Shire
plc ("Shire") terminated their agreements for the development of an
amphetamine patch for ADHD, and the commercial rights to that product
were returned to Noven, resulting in the recognition by Noven of $7.2
million in previously deferred license revenues in the fourth quarter of
2008 and the addition of a significant product to Noven's internal
pipeline.

Intellectual Property. In November
2008, Noven was issued U.S. Patent 7,456,159, extending to the year
2022, relating to the use of a parent drug and pro-drug in combination
for the transdermal administration of certain compounds. This is one of
several patent opportunities that Noven expects to pursue in the
drug/pro-drug area, all as part of Noven's ongoing strategy to extend
and enhance Noven's intellectual property in transdermal drug delivery.

Leadership. During 2008, Noven
appointed new pharmaceutical industry veterans to help lead its
transition from a transdermal drug delivery company to a broader-based
specialty pharmaceutical company, including:

--
Peter Brandt (President, Chief Executive Officer & Director);

--
Steven Dinh (VP & Chief Scientific Officer);

--
Anthony Venditti (VP - Marketing & Sales);

--
Joel Lippman, M.D. (VP - Clinical Development & Chief Medical
Officer); and

--
Peter Amanatides (VP - Quality Assurance & Quality Control).

Also during 2008, Wayne Yetter, previously Noven's lead independent
director, was named non-executive Chairman of the Noven Board of
Directors.

Financial Results

Noven's financial results for full year 2008 and for the period August
14, 2007 through December 31, 2007 included the results of operations of
Noven Therapeutics (formerly JDS Pharmaceuticals), a specialty
pharmaceutical company acquired by Noven in August 2007.

Special Items

Noven's results for 2008 included the following special items (the "2008
Items"): (i) the recognition of $7.2 million in license revenues in the
fourth quarter of 2008 as a result of the termination of agreements with
Shire for the development of an amphetamine patch (the "Amphetamine
Revenues"); (ii) the recognition of $5.0 million in operating income due
to the reversal of an accrued liability related to a future Pexeva(R)
contingent sales milestone; (iii) $3.7 million in charges for
reimbursements to Shire for their voluntary recalls of certain Daytrana
product in 2008, as well as the establishment of $3.8 million in
reserves related to existing Daytrana product at risk of exceeding the
product's peel force specification during its shelf life (together
referred to as the "2008 Daytrana Charges"); and (iv) the establishment
in the fourth quarter of 2008 of a $1.8 million reserve related to a
previously-disclosed patent infringement case (the "Litigation Expense").

Noven's results for 2007 included the following special items (the "2007
Items"): (i) a $100.2 million charge for the portion of the Noven
Therapeutics purchase price allocated to in-process research and
development (the "IPR&D Charge"); (ii) a $3.3 million charge for
reimbursements to Shire for their voluntary recalls of certain Daytrana
product in 2007 (the "2007 Daytrana Charges"); and (iii) an aggregate
$3.3 million charge in the 2007 fourth quarter related to employee
separation arrangements (the "Separation Charge").

2008 Full-Year Results

For 2008, Noven reported net income of $21.4 million ($0.87 diluted
earnings per share), compared to a net loss of $45.4 million ($1.84 loss
per share) for 2007. Excluding the 2008 Items, the 2007 Items and the
related tax effects, net income for 2008 would have been $19.4 million
($0.79 diluted earnings per share) compared to $23.6 million ($0.94
diluted earnings per share) in 2007.

Noven's net revenues in 2008 were $108.2 million, an increase of 30%
over 2007. This increase reflects a full year of sales of Noven
Therapeutics' products, as well as increased license and contract
revenues, primarily due to the Amphetamine Revenues and increased
amortization associated with Daytrana sales milestone payments.

Gross margin, as a percentage of net product revenues, was 33% in 2008
compared to 37% in 2007. Cost of products sold in 2008 included $1.1
million of the 2008 Daytrana Charges, $2.8 million of inventory
write-offs primarily related to an equipment failure in transdermal
manufacturing in the first half of 2008, as well as increased quality
assurance activities and expenses, primarily related to Daytrana
production.

Excluding the $100.2 million IPR&D Charge in 2007, research and
development expenses in 2008 increased $1.5 million to $15.5 million
compared to 2007. Selling and marketing expenses increased to $23.3
million from $9.2 million in 2007, reflecting a full year of selling and
marketing expenses at Noven Therapeutics, including costs related to the
launch of Stavzor. In 2008, general and administrative expenses
increased $6.4 million, or 21%, and included $4.8 million of the 2008
Daytrana Charges, a full year of expenses at Noven Therapeutics, and a
$1.8 million charge related to the Litigation Expense. General and
Administrative expenses in 2007 included $2.2 million of the 2007
Daytrana Charges.

Noven recognized $45.6 million in earnings from Novogyne in 2008, an
increase of 27% compared to 2007. Net revenues at Novogyne increased 15%
to $169.6 million in 2008, primarily due to increased sales of
Vivelle-Dot. Novogyne's gross margin percentage for 2008 was 80%.
Novogyne's selling, general and administrative expenses were $37.5
million in 2008, a 2% decrease from 2007. Novogyne's net income for 2008
increased 25% to $99.5 million compared to $79.8 million in the prior
year.

2008 Fourth Quarter Results

For the quarter ended December 31, 2008 (the "2008 Quarter"), Noven
reported net income of $9.1 million ($0.37 diluted earnings per share),
compared to net income of $1.0 million ($0.04 diluted earnings per
share) for the quarter ended December 31, 2007 (the "2007 Quarter").
Excluding the Amphetamine Revenues, the Litigation Expense and a $0.5
million reduction in the existing Daytrana reserve for product at risk
of exceeding the product's peel force specification (all recorded in the
2008 Quarter) and the Separation Charge (recorded in the 2007 Quarter)
and the related tax effects, net income for the 2008 Quarter would have
been $5.2 million ($0.21 diluted earnings per share) compared to $3.4
million ($0.14 diluted earnings per share) in the 2007 Quarter.

Noven's net revenues in the 2008 Quarter totaled $36.4 million, an
increase of 57% over the 2007 Quarter. This increase reflects increased
license and contract revenues, primarily due to the Amphetamine Revenues
and increased amortization associated with Daytrana sales milestone
payments.

Gross margin, as a percentage of net product revenues, was 43% in the
2008 Quarter compared to 28% in the 2007 Quarter, primarily reflecting
higher overall product revenues, lower inventory reserves and improved
efficiencies associated with Daytrana production in the 2008 Quarter, as
well as a $0.5 million reduction in the existing Daytrana reserve.

Research and development expenses in the 2008 Quarter increased $1.2
million to $4.9 million compared to the 2007 Quarter. Selling and
marketing expenses increased to $5.8 million in the 2008 Quarter from
$5.6 million in the 2007 Quarter. In the 2008 Quarter, general and
administrative expenses decreased $1.3 million, or 11%, reflecting the
Litigation Expense recorded in the 2008 Quarter and the Separation
Charge recorded in the 2007 Quarter.

Noven recognized $11.1 million in earnings from Novogyne in the 2008
Quarter, which is 3% higher than the 2007 Quarter. Net revenues at
Novogyne increased 1% to $40.5 million, reflecting higher gross sales of
Vivelle-Dot, substantially offset by an adjustment to sales deductions
for that product in the 2008 Quarter. New prescriptions for Vivelle-Dot
in the 2008 Quarter increased 7% compared to the 2007 Quarter, and total
prescriptions increased 5% for the same period. Novogyne's gross margin
percentage for the 2008 Quarter was 79%. Novogyne's selling, general and
administrative expenses in the 2008 Quarter decreased 4% to $9.6
million, reflecting lower expenses due to product marketing
efficiencies. Novogyne's net income for the 2008 Quarter increased 3% to
$22.9 million, compared to $22.2 million in the 2007 Quarter.

Balance Sheet Information

At December 31, 2008, Noven had $62.9 million in cash and cash
equivalents and $15.5 million in investments in auction rate securities
("ARS"). This compares with $14.0 million in cash and cash equivalents
and $54.4 million in investments in ARS at December 31, 2007. As of
December 31, 2008, Noven had no long-term debt, and no amounts were
outstanding under its $15.0 million revolving credit facility.

Noven's investments in ARS at December 31, 2008 had a par value of $16.0
million and a fair value of $15.5 million. Noven successfully liquidated
$39.0 million of these investments at par value in 2008. The ARS held by
Noven are collateralized primarily by tax-exempt municipal bonds and, to
a much lesser extent, guaranteed student loans. In the 2008 Quarter, a
previously-recorded $0.5 million temporary impairment of Noven's
investments in ARS was reclassified as other-than-temporary, and
consequently was charged to operations.

Non-GAAP Financial Information

Under accounting principles generally accepted in the U.S. ("GAAP"),
"net income" and "diluted earnings per share" include all charges and
other items for the periods reported. In addition to results determined
in accordance with GAAP, in this press release Noven has also provided
net income and diluted earnings per share for the periods presented
excluding the 2008 Items and the 2007 Items. Noven believes that
comparing Noven's period-to-period financial results without giving
effect to the 2008 Items and the 2007 Items may be helpful to investors
to permit comparison of Noven's period-to-period financial results on a
more uniform basis. For the same reasons, management uses these non-GAAP
financial measures to evaluate Noven's current performance against its
historical performance and to plan its future business activities. These
measures should not be considered alternatives to measures computed in
accordance with GAAP, nor should they be considered indicators of
Noven's overall financial performance. Adjusted net income and adjusted
diluted earnings per share are limited by the fact that companies may
not necessarily compute each in the same manner, thereby making these
measures less useful than the same measures calculated in accordance
with GAAP.

Conference Call

A conference call with management relating to Noven's financial results
will be webcast live on our website at www.noven.com
beginning at 11:00 a.m. Eastern time this morning, March 5. Thereafter,
a rebroadcast of the call will be accessible on our website for at least
two weeks. A taped replay will be available beginning March 5 through
March 8 by calling 877-660-6853 (from within the U.S.) or 201-612-7415
(from outside the U.S.) and entering the access code 286 and conference
ID number 313659. The conference call is expected to contain
forward-looking statements and information in addition to those
contained in this press release.

About Noven

Noven Pharmaceuticals, Inc. is a specialty pharmaceutical company
engaged in the research, development, manufacturing, marketing and sale
of prescription pharmaceutical products. Noven's business and operations
are focused in three principal areas - transdermal drug delivery, the
Novogyne joint venture, and Noven Therapeutics, Noven's specialty
pharmaceutical unit. Noven is committed to developing and offering
products and technologies that meaningfully benefit patients, its
customers and its industry partners. For more information, visit www.noven.com.

Safe Harbor Statement under the Private Securities Litigation Reform
Act of 1995

Except for historical information contained herein, the matters
discussed in this press release contain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that involve
substantial risks and uncertainties. Statements that are not
historical facts, including statements that are preceded by, followed
by, or that include, the words "believes," "anticipates," "plans,"
"expects" or similar expressions and statements are forward-looking
statements. Noven's estimated or anticipated future results,
product performance or other non-historical facts are forward-looking
and reflect Noven's current perspective on existing trends and
information. Actual results, performance or achievements could
differ materially from those contemplated, expressed or implied by the
forward-looking statements contained herein. These
forward-looking statements are based largely on the current expectations
of Noven and are subject to a number of risks and uncertainties that are
subject to change based on factors that are, in many instances, beyond
Noven's control.

By category and not necessarily listed in order of priority or
probability, these risks and uncertainties include: Daytrana
- the risk that solutions currently in testing to address the Daytrana
peel force issue may be delayed, unsuccessful, costly or take more time
than expected to implement and the possibility that any implemented
solution may not adequately resolve the issue; the risk that the FDA may
not agree with the solutions currently in testing, which could delay or
prevent their implementation; the risk that Noven's assessment of the
root cause of the Daytrana peel force issue may prove inaccurate,
incomplete or otherwise incorrect; the risk that the new release testing
intended to identify Daytrana lots likely to develop peel force issues
during the product's shelf life may not accurately, completely or
correctly identify such lots; the risk that the cost of additional
product recalls may exceed the $3.8 million reserve established in 2008;
the risk that Daytrana could be adversely affected by a number of
factors, including: (i) if Noven is unable to adequately resolve the
Daytrana-related issues raised by the FDA in the warning letter that
Noven received in January 2008, (ii) new market entrants, including from
other ADHD products marketed or under development by Shire, (iii) raw
material supply interruptions and/or the inability to obtain the active
ingredient methylphenidate, and (iv) delays or inability to obtain
necessary DEA methylphenidate procurement quota; and the risk that any
adverse effect to the market for Daytrana due to the foregoing or other
factors could adversely affect Noven's reputation, results of operations
and/or its financial position; Regulatory Matters - the
risk that Noven's response to the FDA warning letter may not be
acceptable to the FDA or adequately address the FDA's concerns, and in
such case, the risk that the FDA may take regulatory action against
Noven, which may include fines, product seizures or recalls,
injunctions, suspension of production and/or the withdrawal of product
approval; and the likelihood that any fine or product recall,
injunction, seizure, suspension of production and/or withdrawal of
product approval would have a material adverse effect on Noven,
including the loss of product sales, potentially significant
costs associated therewith and the potential for litigation related to
this matter; Noven's Pipeline - risks and uncertainties
related to the cost, timing and success of ongoing and planned clinical
trials, including with respect to the current Phase 2 study for Mesafem,
and the risk that results from early-stage clinical trials may not be
indicative of results in later-stage trials; the unproven safety and
efficacy of products under development; the difficulty of predicting FDA
approval of products, including timing; the possibility that product
launches may be delayed; the risk that any expected period of
exclusivity for a new product may not be realized; unexpected adverse
events or side effects or inadequate efficacy of a product that could
delay or prevent regulatory filings, approval or commercialization, or
that could result in recalls or product liability claims of approved
products; the difficulty of predicting acceptance and demand for new
pharmaceutical products; the impact of competitive products and pricing;
the risk that product acceptance may be less than anticipated as well as
risks related to compliance with extensive, costly, complex and evolving
governmental regulations and restrictions, and reimbursement policies of
government and private health insurers and others; the possibility that
patent applications may not result in issued patents, and that issued
patents may not be enforceable or could be invalidated; and the impact
of competitive responses to Noven's sales, marketing and strategic
efforts, and the risk that Noven's development partners may have
priorities that are different from or conflict with those of Noven,
which may adversely impact their ability or willingness to assist in the
development and commercialization of Noven's products or to continue the
development program; Liquidity - liquidity and investment risks
related to Noven's auction rate securities; the risk that Noven would be
required to record an additional impairment charge if Noven determines
that it is necessary to lower the carrying value of its auction rate
securities to reflect the estimated prevailing fair market value; the
risk that the recent volatility and disruptions in the global financial
markets and extremely tight credit markets may adversely affect Noven's
ability to obtain financing in the future or access its credit facility,
if required; and the risk that the current unstable and deteriorating
economic conditions could harm the liquidity or financial position of
Noven's partners, customers or suppliers, which could in turn cause such
parties to fail to meet their contractual or other obligations to Noven;
HT Market - risks associated with increased competition in the
HT market; any further impact on Noven's HT business due to the
announcement of additional negative clinical results or otherwise, which
could reduce or eliminate any profit contribution by Novogyne to Noven
and/or sales of HT products from Noven to Novogyne and Novartis Pharma;
the risk that Novogyne may not be able to realize the full value of the
marketing rights for Noven's CombiPatch product; and risks and
uncertainties related to the fact that Vivelle-Dot comprises a
substantial majority of Novogyne's aggregate total prescriptions,
including the risk of potential generic competition to Vivelle-Dot.

For additional information regarding these and other risks associated
with Noven's business, readers should refer to Noven's Annual Report on
Form 10-K as well as other reports filed from time to time with the
Securities and Exchange Commission. Unless required by law, Noven
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise.

Noven Pharmaceuticals, Inc. and Subsidiaries
Consolidated Statements of Operations       Three Months Ended Twelve Months Ended
Data:                                       December 31,       December 31,
(amounts in thousands, except
per share amounts) (unaudited)
                                            2008     2007      2008      2007
Revenues:
Product revenues - Novogyne:
Product sales, net                          $ 7,379  $ 6,451   $ 21,308  $ 22,425
Royalties                                   1,624    1,694     8,411     7,458
Total net product revenues - Novogyne       9,003    8,145     29,719    29,883
Product revenues, net - third parties       13,551   9,933     47,908    35,553
Total net product revenues                  22,554   18,078    77,627    65,436
License and contract revenues               13,831   5,114     30,548    17,725
Total net revenues                          36,385   23,192    108,175   83,161
Costs and Expenses:
Cost of products sold - Novogyne            4,351    3,153     15,134    13,683
Cost of products sold - third parties       8,491    9,812     36,727    27,334
Total cost of products sold                 12,842   12,965    51,861    41,017
Acquired in-process research and
development                                 -        -         -         100,150
Research and development                    4,874    3,678     15,527    13,978
Selling and marketing                       5,814    5,596     23,299    9,160
General and administrative                  9,721    10,972    36,796    30,411
Total costs and expenses                    33,251   33,211    127,483   194,716
Reversal of contingent milestone liability  -        -         5,000     -
Income (loss) from operations               3,134    (10,019)  (14,308)  (111,555)
Equity in earnings of Novogyne              11,097   10,825    45,642    35,850
Interest income, net                        556      703       2,022     5,454
Loss on auction rate securities             (515)    -         (515)     -
Income (loss) before income taxes           14,272   1,509     32,841    (70,251)
Provision (benefit) for income taxes        5,166    460       11,429    (24,875)
Net income (loss)                           $ 9,106  $ 1,049   $ 21,412  $ (45,376)
Basic earnings (loss) per share             $ 0.37   $ 0.04    $ 0.87    $ (1.84)
Diluted earnings (loss) per share           $ 0.37   $ 0.04    $ 0.87    $ (1.84)
Weighted average number of common
shares outstanding:
Basic                                       24,665   24,552    24,617    24,728
Diluted                                     24,807   24,796    24,729    24,728

Consolidated Balance Sheet Data:        As of December 31,
(amounts in thousands) (unaudited)          2008         2007
Cash and cash equivalents               $   62,875   $   13,973
Investments in auction rate securities      15,460       54,400
Investment in Novogyne                      24,319       24,310
Total assets                                301,566      286,698
Deferred license and contract revenues      102,304      105,244
Stockholders' equity                        160,436      134,294

Novogyne Pharmaceuticals (a/k/a Vivelle Ventures LLC)
                                        Three Months Ended       Twelve Months Ended
                                        December 31,             December 31,
                                        2008        2007         2008         2007
Gross revenues                          $   49,365  $   45,915   $   197,994  $   171,347
Sales allowances                            5,152       5,143        23,731       21,912
Sales return allowances                     3,714       675          4,645        1,447
Sales allowances and returns                8,866       5,818        28,376       23,359
Net revenues                                40,499      40,097       169,618      147,988
Cost of sales                               8,306       8,209        33,795       31,203
Selling, general and administrative         9,648       10,094       37,471       38,084
expenses
Income from operations                      22,545      21,794       98,352       78,701
Interest income and other                   347         362          1,129        1,145
Net income                              $   22,892  $   22,156   $   99,481   $   79,846
Noven's equity in earnings of Novogyne  $   11,097  $   10,825   $   45,642   $   35,850

Noven Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures to GAAP
Statements of Operations Data:     Twelve Months Ended                        Twelve Months Ended
(amounts in thousands, except      December 31, 2008                          December 31, 2007
per share) (unaudited)
                                   Non-          Adjustments  GAAP(3)         Non-         Adjustments       GAAP(3)
                                   GAAP(1)                                    GAAP(2)
Net revenues                       $  102,525    $     5,650  $  108,175      $  83,987    $   (826     )    $  83,161
Costs and Expenses:
Cost of products sold                 50,809           1,052     51,861          40,705        312              41,017
Acquired in-process research          -                -         -               -             100,150          100,150
and development
Research and development              15,527           -         15,527          13,978        -                13,978
Selling and marketing                 23,299           -         23,299          9,160         -                9,160
General and administrative            30,216           6,580     36,796          24,908        5,503            30,411
Total costs and expenses              119,851          7,632     127,483         88,751        105,965          194,716
Reversal of contingent                -                5,000     5,000           -             -                -
milestone liability
Loss from operations                  (17,326 )        3,018     (14,308 )       (4,764 )      (106,791 )       (111,555 )
Equity in earnings of Novogyne        45,642           -         45,642          35,850        -                35,850
Interest income, net                  2,022            -         2,022           5,454         -                5,454
Loss on auction rate securities       (515    )        -         (515    )       -             -                -
Income (loss) before income           29,823           3,018     32,841          36,540        (106,791 )       (70,251  )
taxes
Provision (benefit) for income        10,379           1,050     11,429          12,938        (37,813  )       (24,875  )
taxes
Net income (loss)                  $  19,444     $     1,968  $  21,412       $  23,602    $   (68,978  )    $  (45,376  )
Basic earnings (loss) per share    $  0.79       $     0.08   $  0.87         $  0.95      $   (2.79    )    $  (1.84    )
Diluted earnings (loss) per share  $  0.79       $     0.08   $  0.87         $  0.94      $   (2.78    )    $  (1.84    )
Weighted average number of
common shares outstanding:
Basic                                 24,617           -         24,617          24,728        -                24,728
Diluted(4)                            24,729           -         24,729          25,146        (418     )       24,728
(1) Non-GAAP amounts for the year ended December 31, 2008 exclude:
(i) the recognition of $7.2 million in license and contract
revenues as a result of the termination of our agreements with
Shire for the development of an amphetamine patch, (ii) the
recognition of $5.0 million in operating income from the reversal
of an accrued liability related to a future Pexeva(R)
contingent sales milestone, (iii) $3.7 million of charges
associated with the voluntary market withdrawal of a portion of
the Daytrana(R) product by Shire, (iv) a $3.8 million
charge related to previously manufactured Daytrana(R)
product at risk of exceeding the product's peel force
specification during its shelf life, and (v) a $1.8 million charge
for the defense of a patent infringement case.
(2) Non-GAAP amounts for the year ended December 31, 2007 exclude:
(i) acquired IPR&D of $100.2 million which was immediately
expensed following the completion of the acquisition of Noven
Therapeutics, (ii) a $3.3 million charge associated with the
voluntary withdrawal of a portion of the Daytrana(R)
product by Shire, and (iii) a $3.3 million fourth quarter charge
related to employee separation arrangements.
(3) Reflects operating results in accordance with accounting
principles generally accepted in the United States (GAAP).
(4) Diluted weighted average number of shares outstanding for the
year ended December 31, 2007 on a non-GAAP basis have been
adjusted to include shares that were excluded from the GAAP
calculation because such shares were antidilutive on a GAAP basis.

Noven Pharmaceuticals, Inc.
Reconciliation of Non-GAAP Measures to GAAP
Statements of Operations Data:                         Three Months Ended                           Three Months Ended
(amounts in thousands, except                          December 31, 2008                            December 31, 2007
per share) (unaudited)
                                                       Non-           Adjustments   GAAP(3)         Non-           Adjustments    GAAP(3)
                                                       GAAP(1)                                      GAAP(2)
Net revenues                                           $   29,254     $   7,131     $   36,385      $   23,192     $   -          $   23,192
Costs and Expenses:
Cost of products sold                                      13,462         (620  )       12,842          12,965         -              12,965
Acquired in-process research                               -              -             -               -              -              -
and development
Research and development                                   4,874          -             4,874           3,678          -              3,678
Selling and marketing                                      5,814          -             5,814           5,596          -              5,596
General and administrative                                 7,971          1,750         9,721           7,589          3,383          10,972
Total costs and expenses                                   32,121         1,130         33,251          29,828         3,383          33,211
Reversal of contingent                                     -              -             -               -              -              -
milestone liability
Income (loss) from operations                              (2,867 )       6,001         3,134           (6,636 )       (3,383 )       (10,019 )
Equity in earnings of Novogyne                             11,097         -             11,097          10,825         -              10,825
Interest income, net                                       556            -             556             703            -              703
Loss on auction rate securities                            (515   )       -             (515   )        -              -              -
Income (loss) before income                                8,271          6,001         14,272          4,892          (3,383 )       1,509
taxes
Provision (benefit) for income                             3,110          2,056         5,166           1,500          (1,040 )       460
taxes
Net income (loss)                                      $   5,161      $   3,945     $   9,106       $   3,392      $   (2,343 )   $   1,049
Basic earnings (loss) per share                        $   0.21       $   0.16      $   0.37        $   0.14       $   (0.10  )   $   0.04
Diluted earnings (loss) per share                      $   0.21       $   0.16      $   0.37        $   0.14       $   (0.10  )   $   0.04
Weighted average number of common shares outstanding:
Basic                                                      24,665         -             24,665          24,552         -              24,552
Diluted                                                    24,807         -             24,807          24,796         -              24,796
(1) Non-GAAP amounts for the three months ended December 31, 2008
exclude: (i) the recognition of $7.2 million in license and
contract revenues as a result of the termination of our agreements
with Shire for the development of an amphetamine patch, (ii) a
$0.5 million reduction of the charge related to previously
manufactured Daytrana(R) product at risk of exceeding the
product's peel force specification during its shelf life, and
(iii) a $1.8 million charge for the defense of a patent
infringement case.
(2) Non-GAAP amounts for the three months ended December 31, 2007
exclude a total of $3.3 million in fourth quarter charges related
to separation arrangements associated with the retirement of
certain executive officers as well as an immaterial amount
associated with the voluntary market withdrawal of a portion of
the Daytrana(R) product by Shire.
(3) Reflects operating results in accordance with accounting
principles generally accepted in the United States (GAAP).

SOURCE: Noven Pharmaceuticals, Inc.

Noven Pharmaceuticals, Inc., Miami 
Joseph C. Jones, Vice President - Corporate Affairs 
305-253-1916

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