8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

August 21, 2002

NEOTHERAPEUTICS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-28782	93-0979187
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

157 Technology Drive

Irvine, California 92618

(Address of Principal Executive Offices)

(949) 788-6700

(Registrant’s telephone number, including area code)

ITEM 5.    OTHER EVENTS

On August 21, 2002, NeoTherapeutics, Inc. (the “Company”) issued a press release announcing the retirement of Samuel Gulko as Director, Senior Vice President Finance, Chief Financial Officer, Secretary and Treasurer of the Company. In connection with his retirement, we have entered into an agreement with Mr. Gulko pursuant to which he will continue to act as a consultant to the Company, and which provides for the payment of approximately $125,000 in severance benefits, net of the repayment of certain loans from us to Mr. Gulko of approximately $75,000, and accrued vacation benefits and deferred salary of approximately $36,000. The foregoing description of our agreement is qualified entirely by reference to a copy of the Retirement Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by this reference. The text of the press release is set forth in Exhibit 99.1 attached to this report and incorporated herein by this reference.

On August 22, 2002, the Company issued a press release announcing additional restructuring intended to reduce the Company’s expected monthly expenses to less than $500,000, including the elimination of 23 of the Company’s approximately 44 full-time equivalent positions. The text of the press release is set forth in Exhibit 99.2 attached to this report and incorporated herein by this reference.

ITEM 7.    EXHIBITS

Exhibits:
10.1	Retirement Agreement and General Release, dated as of August 20, 2002, by and between the Company and Samuel Gulko.
99.1	Press release dated August 21, 2002.
99.2	Press release dated August 22, 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 23, 2002	NEOTHERAPEUTICS, INC.
	By:	/s/    Rajesh C. Shrotriya
	Name:    Rajesh Shrotriya, M.D.
	Title:      Chairman of the Board, Chief                 Executive Officer and President

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EXHIBIT INDEX

Exhibits:
10.1	Retirement Agreement and General Release, dated as of August 20, 2002, by and between the Company and Samuel Gulko.
99.1	Press release dated August 21, 2002.
99.2	Press release dated August 22, 2002.

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EX-10.1

EXHIBIT 10.1

CONFIDENTIAL RETIREMENT AGREEMENT

AND GENERAL RELEASE

        THIS CONFIDENTIAL RETIREMENT AGREEMENT AND GENERAL RELEASE (this “Agreement”) is entered into as of August 20, 2002 (the “Effective Date”), by and between NeoTherapeutics, Inc., a Delaware corporation (the “Company”) and Samuel Gulko, an individual (“Executive”).

RECITALS

        WHEREAS, Executive is employed by the Company pursuant to that certain executive employment agreement dated as of December 1, 2000 (the “Employment Agreement”);

        WHEREAS, Executive and the Company (collectively, the “Parties”) have agreed that Executive will retire from his positions as an officer, a director and an employee of the Company, and will become a consultant to the Company;

        WHEREAS, the Parties wish to specify the terms of the retirement and resolve any outstanding issues between them.

AGREEMENT

        NOW THEREFORE, in consideration of the representations and agreements contained herein, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be bound hereby, the Company and Executive hereby agree to terminate their employment relationship on the following basis:

1.     Termination of the Employment Agreement.    The Employment Agreement and each Party’s rights thereunder are hereby terminated, including, without limitation, Executive’s right to receive any “Base Salary” (as defined in the Employment Agreement), bonus or other compensation, or any entitlement to severance or other payments upon termination of employment under the Employment Agreement.

2.     Retirement.    Executive hereby retires as Director, Senior Vice President, Finance, Chief Financial Officer, Secretary, Treasurer and an employee of the Company as of the Effective Date. Executive understands and agrees that he is giving up any right or claim to future employment with the Company and any compensation or benefit of such employment, including any compensation and/or benefits owed to the Executive pursuant to the Employment Agreement, except for compensation and/or benefits provided for in this Agreement. Executive acknowledges that he has received all compensation and benefits due to him through the Effective Date.

3.     Compensation.    In consideration for Executive’s agreement to retire pursuant to the terms of this Agreement:

        (a)    In lieu of severance, the Company shall pay to Executive concurrently with the execution of this Agreement a lump sum payment of $200,000 less (i) $75,095.81 set-off as provided in Section 4 below, and (ii) $27,900 in withholding in accordance with applicable law. Also concurrently with the execution of this Agreement, Executive shall receive a payment of $25,348.13, representing the sum of (i) the amount of his Base Salary that has been deferred since July 1, 2002, and (ii) all other accrued but unpaid amounts due under the Employment Agreement as of the Effective Date but before execution of this Agreement, net of applicable deductions totaling $11,081.56.

        (b)    Following the Effective Date, the Company shall pay (i) fifty-percent (50%) of the COBRA premium with respect to vision and dental benefits for Executive and his spouse until February 20, 2004, provided that Executive elects to continue benefits under COBRA and remains eligible for COBRA throughout that period, and (ii) fifty-percent (50%) of the amounts Executive would be entitled to receive under the Company’s Executive Medical Plan (“EMP”) if Executive were to continue to be a member of the Company’s senior management during the period beginning on the Effective Date and ending on February 20, 2004; provided, however, in the event the Company for any reason amends, modifies, replaces or substitutes an alternative plan (“New EMP”) for the EMP prior to February 20, 2004, it shall pay Executive fifty-percent (50%) of the amounts Executive would have been entitled to receive had Executive been covered under the New EMP; provided, further, in the event the Company terminates the EMP and does not replace it with a similar or alternative benefit for executives of the company, the Company shall no longer be required to pay Executive for benefits under the EMP.

        (c)    All stock options previously granted to Executive shall become fully vested as of the Effective Date, and Executive shall be entitled to exercise such options in whole or in part from time to time during the one year period commencing on January 1, 2003.

        (d)    The Company hereby transfers to Executive ownership of the laptop computer (including docking station) and cell phone provided to him by the Company as of the Effective Date; provided, that, Executive shall be responsible for making all payments for charges incurred in relation to the cell phone following the Effective Date, subject to Executive’s right to reimbursement under Section 3(e) below.

        (e)    The Company shall reimburse Executive for other amounts actually expended by Executive in the course of performing his duties as a consultant to the Company, if such amounts are approved in writing by the Company beforehand and Executive tenders receipts or other documentation reasonably substantiating the amounts as required by the Company.

        (f)    Executive is covered under the liability insurance policies currently maintained by the Company for its directors and officers, with respect to events occurring prior to the Effective Date. In the event that the Company renews, extends or replaces such policies, or purchases “tail” coverage, the Company will include Executive under the coverage with respect to events occurring prior to the Effective Date.

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4.    Repayment of Executive Loan.    Executive hereby agrees to repay the total outstanding balance of principal and interest as of the Effective Date of $75,095.81 owed to the Company by Executive under those certain Amended and Restated Promissory Notes (the “Executive Notes”) made by Executive dated as of June 6, 2002 by setting off such amount against the lump sum payment due under Section 3(a) above. The Company shall deem the Executive Note to be repaid in full as of the Effective Date, and shall deliver to Executive the original Executive Note marked paid in full and initialed by a duly authorized representative of the Company concurrently with the execution of this agreement.

5.    Options.    Executive and the Company are parties to certain written agreements pursuant to which Executive has been granted options to purchase stock in the Company. Executive acknowledges that although such options might be identified as incentive stock options, such options may not be qualified for treatment as incentive stock options, either now or in the future. Executive is advised to consult with his personal tax advisor to determine whether the options are qualified for treatment as incentive stock options. Except as set forth in Section 3(c) and this Section 5, Executive’s rights under his existing option agreements are not intended to be modified by this Agreement in any way.

6.    Future Consulting.    Executive shall provide consulting services to the Company as may be reasonably requested by the Company from time to time up to and through December 31, 2002, such requests to be made on reasonable notice to Executive and such services to be performed solely during ordinary business hours, not to exceed 20 hours per week. The Company shall compensate Executive for these consulting services at the rate of $250 per hour. It is the express intent of the parties that Executive shall provide consulting services to the Company as an independent contractor pursuant to this Agreement. Executive will not be an employee of the Company after the Effective Date, and Executive shall not hold himself out to be an employee of the Company, and shall not have the authority to enter into or bind the Company to any contract, promise, or obligation under any circumstances. The Company is interested only in the results to be achieved by Executive under this Agreement, and the manner and method of performing all services of Executive under this Agreement, and achieving the desired results, shall be under the exclusive control of Executive. The Company shall have no right or authority to direct or control Executive with respect to the performance of Executive’s services under this Agreement, except as otherwise provided by this Agreement.

7.    Return of Company Property.    Except as expressly provided for herein, at the Company’s request, the Executive will return to the Company all files, records, credit cards, keys, equipment, and any other property of the Company or documents maintained by him for the Company’s use or benefit, on or before the Effective Date.

8.    Confidentiality.    The Parties acknowledge that this Agreement and all matters relating to or leading up to the negotiation and effectuation of this Agreement are confidential and shall not be disclosed to any third party except as follows: the Company may disclose the terms of this Agreement to the public as required by law, including without limitation, the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended; the Company may disclose the terms of this Agreement to Company employees with a business purpose for receiving such information; the Parties may disclose the terms of the Agreement to their respective legal, accounting and tax advisors to the extent necessary for them to perform

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services; and the Parties may disclose the terms of this Agreement to the Internal Revenue Service and the California Franchise Tax Board as required by law, rule or regulation, or as otherwise required by law or necessary to enforce the terms of this Agreement. If any disclosure is made as permitted by this paragraph other than to governmental authorities as required by law, then such persons or entities shall be cautioned about the confidentiality obligations imposed by this Agreement.

9.    Non-Disclosure, Non-Competition and Non-Solicitation.

        (a)    Executive agrees that he will not disclose at any time, other than to an authorized employee, officer, director or agent of the Company, any information relating to the Company’s business, trade, practices, trade secrets or know-how or proprietary information without the Company’s prior express written consent. Following the Effective Date, Executive shall be permitted to continue in his usual occupation and shall not be prohibited from competing with the Company except in the specific industry market segments in which the Corporation competes while Executive is a consultant to the Company. Executive agrees that until December 31, 2002, Executive shall not directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees to leave their employment or take away such employees to leave their employment or take away such employees or attempts to solicit, induce, recruit, encourage or take away employees of the Company.

        (b)    Executive understands and agrees that future payments under this Agreement may be terminated by the Company if he violates this provision in addition to any other remedies available under applicable law. In the event the Company terminates payments pursuant to this Section, Executive may challenge such termination in accordance with Section 16 below. In the event of any other breach or violation of this Agreement, the party asserting a breach or violation of the Agreement may seek remedies otherwise available under applicable law or another provision of this Agreement in accordance with Section 16 below.

10.   General Release by Executive.

        (a)    Release of Claims. Executive does hereby for himself and his respective heirs, successors and assigns, release, acquit and forever discharge the Company, its parents, subsidiaries and affiliates and any of their officers, directors, managers, employees, representatives, related entities, successors and assigns, and all persons acting by, through or in concert with them (the “Company Releasees”) of and from any and all claims, actions, charges, complaints, causes of action, rights, demands, debts, damages, or accountings of whatever nature, known or unknown which Executive may have against the Company Releasees, or any of them, based on any actions or events which occurred prior to the effective date of this Agreement, including, but not limited to, those related to, or arising from, Executive’s employment with the Company or the termination thereof, including, without limitation, any claims under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and the California Fair Employment and Housing Act (collectively, the “Claims” or individually, “Claim”); provided, however, that the release set forth in this Section 10(a) shall not be effective with respect to any Company Releasee, other than the Company, who commences any claim, action or proceeding against Executive based on any actions or events which occurred prior to the effective date of this Agreement.

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        (b)    Release of Unknown Claims. In addition, Executive expressly waives all rights under Section 1542 of the Civil Code of the State of California, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

        (c)    No Assignment of Claims.    Executive represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim which Executive may have against the Company Releasees, or any of them, and Executive agrees to indemnify and hold the Company Releasees harmless from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any person asserting any such assignment or transfer of any rights or Claims if Executive has made such assignment or transfer from such party.

        (d)    No Suits or Actions.    Executive represents and warrants to the Company that there have been no claims, suits, actions, complaints, or charges filed by him against the Company Releasees, or any of them. Executive agrees that if he hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released hereunder, or in any manner asserts against the Company Releasees, or any of them, any of the Claims released hereunder, then he will pay to the Company Releasees against whom such claim(s) is asserted, in addition to any other damages caused thereby, all attorneys’ fees incurred by such Company Releasees in defending or otherwise responding to said suit or Claim.

        (e)    No Admission.    Executive further understands and agrees that neither the payment of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Company Releasees.

11.   General Release by the Company.

        (a)    Release of Claims.    The Company does hereby for itself and its respective successors and assigns, release, acquit and forever discharge Executive and his heirs, estates, successors and assigns, and all persons acting by, through or in concert with them (the “Executive Releasees”) of and from any and all claims, actions, charges, complaints, causes of action, rights, demands, debts, damages, or accountings of whatever nature, known or unknown which the Company may have against the Executive Releasees, or any of them, based on any actions or events which occurred prior to the effective date of this Agreement, including, but not limited to, those related to, or arising from, Executive’s employment with the Company or the termination thereof (collectively, the “Claims” or individually, “Claim”).

        (b)    Release of Unknown Claims.    In addition, the Company expressly waives all rights under Section 1542 of the Civil Code of the State of California, which reads as follows:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH A CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR

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AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

        (c)    No Assignment of Claims.    The Company represents and warrants to the Executive Releasees that there has been no assignment or other transfer of any interest in any Claim which the Company may have against the Executive Releasees, or any of them, and the Company agrees to indemnify and hold the Executive Releasees harmless from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any person asserting any such assignment or transfer of any rights or Claims if the Company has made such assignment or transfer from such party.

        (d)    No Suits or Actions.    The Company agrees that if it hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released hereunder, or in any manner asserts against the Executive Releasees, or any of them, any of the Claims released hereunder, then it will pay to the Executive Releasees against whom such claim(s) is asserted, in addition to any other damages caused thereby, all attorneys’ fees incurred by such Executive Releasees in defending or otherwise responding to said suit or Claim.

        (e)    No Admission.    The Company further understands and agrees that neither the payment of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Executive Releasees.

12.   Nondisparagement.    The Company and Executive agree not to make any disparaging or derogatory comments, public or otherwise, concerning each other, and Executive shall refrain from making any disparaging comments, public or otherwise, concerning any employees, officers or directors of the Company. The Company’s obligation under this provision shall be limited to (i) causing its officers and (ii) using its best efforts to cause other employees, to refrain from making any disparaging or derogatory comments, public or otherwise, concerning Executive. In the event that a court or arbitrator determines that the Company has violated this Section 12 in any material respect, Executive’s sole remedy shall be the amendment of the option to purchase up to 200,000 shares of the Company’s common stock granted October 9, 2001, to change the exercise price of the option to the closing sale price of the Company’s common stock on the Nasdaq National Market on the Effective Date. In addition, the Company shall provide Executive a reasonable opportunity to review and comment in advance on any press release regarding Executive’s retirement from the Company, and the Company shall not unreasonably disregard any such comments provided by Executive.

13.   Successors and Assigns.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. Notwithstanding the foregoing, neither this Agreement nor any rights hereunder may be assigned to any party by the Company or Executive without the prior written consent of the other party hereto.

14.   Entire Agreement/No Oral Modification.    This Agreement contains all of the terms, promises, representations, and understandings, oral or written, made between the

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Company and Executive with respect to the subject matter hereof and supersedes all prior representations, understandings, or agreements, oral or written, between the Company and Executive, with respect to such matters, which the Parties acknowledge have been merged into this Agreement. This Agreement may not be modified other than with a writing executed by both parties and stating an intent to modify this agreement.

15.    Governing Law.    This Agreement shall be governed by the laws of the State of California, without regard for conflict of law principles.

16.    Arbitration; Waiver of Jury Trial.    Except for claims for equitable or injunctive relief which cannot be timely addressed through arbitration (which claims may be brought in any state or federal court in Orange County, California), the parties hereby agree to submit any claim or dispute arising out of the terms of this Agreement, including, without limitation, claims regarding confidentiality under Section 8 of this Agreement and/or any dispute arising out of or relating to Executive’s employment or consulting relationship with the Company in any way, to private and confidential arbitration by a single neutral arbitrator through JAMS. All arbitration proceedings shall be governed by the then current JAMS rules governing employment disputes, and shall take place in Orange County, California. The decision of the arbitrator shall be rendered in writing and shall be final and binding on all parties to this Agreement. Judgment thereon may be entered in any court having jurisdiction. The Company shall advance the arbitrator’s fee and all costs of services provided by the arbitrator and arbitration organization; however, all costs of the arbitration proceeding or litigation to enforce this Agreement, including attorneys’ fees and witness expenses, may be awarded to the prevailing party in addition to such other relief as the arbitrator may determine. Except for claims for equitable or injunctive relief which cannot be timely addressed through arbitration (which claims may be brought in any state or federal court in Orange County, California), this arbitration procedure is intended to be the exclusive method of resolving any claim relating to the obligations set forth in this Agreement. Executive hereby waives any right to a jury trial on any dispute or claim covered by this paragraph.

17.    Counterparts.    This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument.

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        IN WITNESS WHEREOF, this Agreement is executed by the parties set forth below as of the date first indicated above.

THE COMPANY NeoTherapeutics, Inc. a Delaware corporation By:    /s/  Rajesh Shrotriya                                 Title:    Chief Executive Officer                         EXECUTIVE Samuel Gulko, an individual /s/  Samuel Gulko                                    

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EX-99.1

EXHIBIT 99.1

[NEOTHERAPEUTICS LOGO]

Contact:

John McManus

NeoTherapeutics, Inc.

(949) 788-6700, ext. 247

BULLETIN!!                     BULLETIN!!

NeoTherapeutics will hold a telephone conference call, August 22, 2002 at 10:00 A.M. (EST).

Rajesh Shrotriya, M.D., Chairman and Chief Executive Officer, will discuss and answer questions relating to the recently announced strategic and organizational changes. Those wishing to participate should call 888-348-7538 at approximately 9:50 A.M. (EST). A replay of this conference call will be available on the Company’s website at www.neot.com beginning on August 23, 2002.

NeoTherapeutics announces new financial leadership

IRVINE, California, August 21, 2002 – NeoTherapeutics, Inc. (Nasdaq: NEOT) announced today the retirement of Samuel Gulko, Senior Vice President Finance, Chief Financial Officer, Secretary and Treasurer. Mr. Gulko also has retired from the Company’s Board of Directors.

Effective immediately, financing and financial planning will be managed by John McManus and accounting and SEC reporting will be managed by Michael Volk, C.P.A., Controller.

“We appreciate Sam Gulko’s service to the Company as an officer and director and wish him well in his retirement. We may continue to seek his advice as a consultant as we go forward”, stated Rajesh Shrotriya, Chairman of the Board, Chief Executive Officer and President of NeoTherapeutics. “I am pleased to announce that John McManus will be rejoining the Company. John played a key role in our efforts to raise money from long-term oriented, fundamental investors when he was with the Company previously, and he will lead our efforts to shore up the Company’s financial condition. Michael Volk has served as the Company’s Controller for the past year and has managed the Company’s SEC compliance. He previously spent seven years with Ernst & Young, working his way to the level of audit manager at the firm. We believe that he has the skills and experience necessary to assume leadership in the accounting area.”

“Our goal is to secure financing from investors convinced of the upside potential in NeoTherapeutics based on the Company’s fundamentals,” stated John McManus. “Our first objective is to retain our listing status on Nasdaq. Meeting these goals will enhance our access to the resources necessary to develop our phase 3 anti-cancer drug, Satraplatin and continue our efforts to out-license our anti-psychotic platform.”

NeoTherapeutics seeks to create value for shareholders through the in-licensing and commercialization of anti-cancer drugs and the discovery and out-licensing of drugs for central nervous system disorders. Satraplatin, the Company’s lead oncology drug, is being prepared for a phase 3 study in prostate cancer. Additional anti-cancer drugs are in phase 1 and 2 stages of development for bladder cancer and non-Hodgkin’s lymphoma.

The Company has pre-clinical neurological drug candidates for disorders such as attention deficit hyperactivity disorder, schizophrenia, dementia, mild cognitive impairment, anxiety and pain. For additional information visit the Company’s web site at www.neot.com.

This press release may contain forward-looking statements regarding future events and the future performance of NeoTherapeutics that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in the Company’s reports filed with the Securities and Exchange Commission.

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EX-99.2

EXHIBIT 99.2

Contact:

John McManus

NeoTherapeutics, Inc.

(949) 788-6700, ext. 247

BULLETIN!!                                 BULLETIN!!

NeoTherapeutics will hold a telephone conference call, August 22, 2002 at 10:00 A.M. (EST).

Rajesh Shrotriya, M.D., Chairman and Chief Executive Officer, will discuss and answer questions relating to the recently announced strategic and organizational changes. Those wishing to participate should call 888-348-7538 at approximately 9:50 A.M. (EST). A replay of this conference call will be available on the Company’s website at www.neot.com beginning on August 23, 2002.

NeoTherapeutics announces organizational changes designed to 

bring on-going monthly expenses below $500,000

Changes solidify strategic commitment to anti-cancer drug

development and out-licensing of neurology products

IRVINE, Calif., August 22, 2002 — NeoTherapeutics, Inc. (NASDAQ: NEOT) announced today a reorganization of the Company which will bring the expected monthly expenses, or burn rate, down to less than a half million dollars per month. The changes are intended to allow the Company to focus on the development of its phase 3 anti-cancer drug, Satraplatin, and to negotiate alliance agreements for the development of its neurology products.

As part of the reorganization, the Company plans to consolidate its activities into the parent company, eliminate operations at all subsidiaries and focus its research efforts. In addition, the Company has eliminated 23 positions and currently employs the equivalent of 21 full time employees. Together, the changes are expected to result in significant savings.

The following personnel will head the NeoTherapeutics team:

Luigi Lenaz, M.D., will oversee the development of the Company’s anti-cancer drug portfolio. Dr. Lenaz, an oncologist, spent nearly 20 years in various executive positions at Bristol-Myers Squibb in the anti-cancer drug development area, where he played a key role in bringing numerous anti-cancer drugs to market including Taxol^®, Cisplatin and Carboplatin.

John McManus will manage financing and financial planning activities and play an active role in corporate strategic planning. John played a key role in our efforts to raise money from long-term oriented investors when he was with the Company previously, and he will lead our efforts to shore up the Company’s financial condition. John has over ten years of experience in advising and assisting numerous public companies in financial, strategic, accounting and reorganization matters.

more…

Martyn Gunning will be responsible for business development, where he will pursue alliance discussions and manage existing alliance arrangements for the Company. Martyn has served as the Director of European New Product Development for Allergan Europe, an affiliate of the U.S. multi-national company Allergan, Inc., where he played a leading role in the integration of research and development, marketing, operations and logistics efforts for their European operations. Prior to Allergan, Mr. Gunning was with Beaufour Ipsen in Paris, where he was also involved in business development and licensing.

David Helton will oversee research and pre-clinical activities and alliances. Dave and his team are responsible for the development of the Company’s anti-psychotic platform and other new neurological drug candidates. He will also work closely with Martyn Gunning in pursuing pharmaceutical partners for the development of these products. Dave has extensive experience in pharmacology and toxicology and has held various positions for Eli Lilly and Company.

Ashok Gore, Ph.D., will oversee compliance, quality assurance and manufacturing. Dr. Gore held various positions in the field of pharmaceutical development for Bristol-Myers Squibb, R.W. Johnson Research Institute, Knoll Pharmaceuticals, Hoechst Pharmaceuticals, Block Drug, Miles Pharmaceuticals and SmithKline Beecham Pharmaceuticals over his thirty-year career. Most recently while at SuperGen, Dr. Gore played a key role in the development of chemotherapy drugs such as paclitaxel and daunorubicin. Dr. Gore also holds several patents.

Michael Volk, C.P.A., will manage the accounting and SEC reporting functions. Michael has served as the Company’s Controller for the past year and has managed the Company’s SEC compliance. He previously spent seven years with Ernst & Young, working his way to the level of audit manager at the firm.

“I have a high level of confidence in our restructured management team,” stated Rajesh C. Shrotriya, M.D., Chairman and Chief Executive Officer of NeoTherapeutics. “We have assembled a group of highly skilled and motivated people who are committed to the execution of our new strategy. The reduction in expenses and sharpened focus we have announced today are just the first signs of what we hope to accomplish together going forward.”

NeoTherapeutics seeks to create value for shareholders through the out-licensing and commercialization of anti-cancer drugs and the discovery and out-licensing of drugs for central nervous system disorders. Satraplatin, the Company’s lead oncology drug, is being prepared for a phase 3 study in prostate cancer. Additional anti-cancer drugs are in phase 1 and 2 stages of development for bladder cancer and non-Hodgkin’s lymphoma. The Company has pre-clinical neurological drug candidates for disorders such as attention deficit hyperactivity disorder, schizophrenia, dementia, mild cognitive impairment and pain. For additional information visit the Company’s web site at www.neot.com.

This press release may contain forward-looking statements regarding future events and the future performance of NeoTherapeutics that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in the Company’s reports filed with the Securities and Exchange Commission.

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