Accentia Biopharmaceuticals Reports Fiscal 2006 Year-End Results.

TAMPA, Fla. -- Accentia Biopharmaceuticals, Inc. (NASDAQ: ABPI; "Accentia"; "Company"), has released the results of its operations for the fiscal year ended September 30, 2006, as reflected in the Company's annual report filed with the SEC on December 29, 2006. Accentia has two operating segments consisting of specialty pharmaceuticals (Accentia Pharmaceuticals) and product development and market services (Analytica International). The Company also has an approximately 78% interest in Biovest International, Inc. ("Biovest") (OTCBB:BVTI), which is consolidated for reporting purposes with Accentia's product development and market services business. As previously announced, Accentia's percentage ownership of Biovest is expected to decline as Biovest continues to pursue its self-funding activities.

Financial Review:

On a fully consolidated basis, including Biovest, net sales for fiscal 2006 were $25.1 million, compared with $25.2 million in the prior fiscal year. Consolidated research and development costs were $14.6 million for the year, an increase of $3.7 million, or 33%, over the same twelve-month period in 2005. These research costs reflect the ongoing Phase 3 clinical trials for SinuNase[TM] and BiovaxID[TM].

Accentia's net loss for the year ended September 30, 2006, on a fully consolidated basis, including Biovest, was $43.4 million, a $1.3 million decrease, or 3%, from the $44.7 reported for the same twelve-month period in 2005. Of this loss, $6.4 million, or approximately 15%, was the result of non-cash charges such as depreciation, amortization of product rights, stock-based compensation, asset impairments, derivative gain, and amortization of debt discount.

The fully consolidated loss per share for the year ended September 30, 2006 was $1.56, of which $0.23 per share was the result of non-cash charges, $0.23 per share was interest expense, and $0.49 per share reflected losses incurred by Biovest. For the comparable 2005 year, the fully consolidated loss per share for the year was $9.69, of which $2.60 per share was the result of non-cash charges, $0.37 per share was interest expense, and $2.23 per share reflected losses incurred by Biovest. Per share figures are based on 27,890,825 weighted average shares outstanding for 2006, and 5,147,222 weighted average shares outstanding for 2005.

On a fully consolidated basis, Accentia's capital resources at the end of the 2006 fiscal year were approximately $28.7 million, consisting of cash, restricted cash and availability under lines of credit. Additionally, at September 30, 2006 Accentia carried an inter-Company demand note from Biovest in the amount of $4.7 million, which Accentia anticipates will be repaid by Biovest as it completes additional financings. As of September 30, 2006, Accentia also owned Biovest common shares valued in excess of $55 million based on Biovest's market price at the close of the fiscal year. As previously announced, Accentia's percentage ownership of Biovest is expected to decline as Biovest continues to pursue its self-funding activities.

Summary of 2006 Milestones

During fiscal 2006, the Company completed significant milestones, including:

* The commercial launch of MD Turbo[TM], the first and only device that transforms more than 90% of dispensed metered-dose inhalers (MDIs) into a breath-activated, dose-counting inhaler 

* Fast Track designation from the FDA for SinuNase, a potential blockbuster prescription intranasal amphotericin B formulation for chronic sinusitis 

* The commencement of a Phase 3 clinical trial for SinuNase

* An exclusive worldwide option on all prescription antifungals, pursuant to the Mayo patents, for chronic sinusitis until December 2007

* A worldwide exclusive license to all non-prescription (OTC) formulations, pursuant to the Mayo patents, for chronic sinusitis

* Significant adoption of the non-invasive fungal etiology of chronic sinusitis and of the treatment by means of intranasal antifungals by specialists in the U.S.

* Commencement of partnership discussions for SinuNase with Pharmaceutical companies that have existing respiratory franchises, which includes primary care providers

Through Accentia's majority-owned subsidiary, Biovest International, significant advances have been made in the development of BiovaxID, a personalized biologic therapeutic vaccine for follicular non-Hodgkin's lymphoma, in particular:

* Fast Track status was granted for BiovaxID

* Orphan Drug status was granted in the EU

* Modification of the secondary endpoints in the current Phase 3 clinical trial to include molecular disease status, potentially accelerating the difference in remission between BiovaxID and control in the clinical study

* An independent clinical study demonstrated a highly significant clinical benefit from the use of a BiovaxID formulation in relapsed non-Hodgkins lymphoma patients

* Clinical trial sites were expanded into Eastern Europe and Russia

* The commercial launch of AutovaxID[TM], a breakthrough automated cell culture device that enables automated production of personalized cell-based treatments and proteins such as monoclonal antibodies 

Moreover, Accentia pioneered, with the assistance of U.S. Bank, the use of Federal New Market Tax Credits (NMTC), a $3.5 billion annual program sponsored by the U.S. Treasury Department, to fund biotechnology, garnering a total of $20 million in NMTCs for Biovest and its subsidiaries during 2006. The proceeds of the funds, in part, will be used to support BiovaxID development in Worcester, MA, and to scale up Biovest's new 24,000 sq ft. AutovaxID manufacturing facility in St. Louis, MO, for the commercial launch of AutovaxID.

Our Business Strategy Update for 2007

Since our inception, our goal has been to acquire, develop, and commercialize innovative late-stage biopharmaceutical and medical device products that offer the potential for superior efficacy and safety, and that addresses significant unmet medical needs. Both SinuNase and BiovaxID are good examples of our product strategy.

We evaluate on a continuing basis, and as appropriate, adjust our business strategy in light of market conditions and other relevant factors such as available financing, opportunities for strategic relationships, and changes impacting our current and future products and product candidates. Our business strategy and objectives as of 2007 can be summarized as follows:

Conducting Phase 3 clinical trials for SinuNase and BiovaxID:

* We intend to conduct our Phase 3 clinical trials for SinuNase and, through our majority-owned subsidiary, Biovest International Inc, BiovaxID, and aggressively pursue regulatory approvals for both products in the U.S. and EU.

Leveraging our broad range of internal capabilities to support our ongoing development and commercialization efforts:

* We believe that our broad range of in-house capabilities provides a development and commercialization platform on which to bring new biopharmaceuticals and medical device products to market. In particular, we have demonstrated competencies in product selection, licensing, contracting for manufacturing, regulatory approvals in the U.S. and EU, pricing, reimbursement, contracting with Medicaid, Medicare part D, and managed care organizations.

* After the launch of MD Turbo, the Company reorganized its commercial sales force to focus on respiratory products. The MD Turbo is used to improve drug delivery of pressurized metered dose inhalers, which are the cornerstone of management for asthma patients, and about 60% of asthma patients have chronic sinusitis. Accordingly, the Company changed its specialty pharmaceuticals division name to Accentia Pharmaceuticals, disposed of non-respiratory products, adjusted the size of its sales force to approximately 45 field representatives, and focused its efforts on the promotion of its respiratory products with an emphasis on the ENT and Allergist specialists who treat severe cases of chronic sinusitis. During the cough cold, and flu season, the Company focuses on promotion of its RespiTann product line, whereas the emphasis is on MD Turbo at all other times of the year. The Company is also promoting the CRSFungal Profile[TM] laboratory diagnostic to the ENT and Allergist specialists.. CRSFungal Profile is the only laboratory test available for the diagnosis of chronic sinusitis and it provides identification of a fungal etiology.

Pursuing strategic relationships on a selective basis for product development or distribution:

* We may from time to time consider entering into strategic relationships with third-parties in order to facilitate the development of new products and to market and distribute our approved and pipeline products. Such strategic relationships could be in the form of product sale, licensing, distribution arrangements, spin-offs, co-promotions, or joint ventures. For example, the Company is seeking a partner for promotion of MD Turbo and, upon approval, of AllerNase to primary care providers, including pediatricians. At the present time, we intend to promote SinuNase to ENTs and Allergists in the U.S. using our own respiratory sales force and to seek co-promotion partners to address the patient population under the care of primary care physicians. We intend to seek one or more commercial partners for international markets. Accordingly, the Company, after consultation with potential partners, elected to terminate its co-development agreement with Pharmaceutical Product Development, Inc., reducing the cumulative royalty on all SinuNase formulations by almost 25%. During 2006, we revised our commercialization agreement with Biovest on BiovaxID by converting it to a passive royalty of 19.5% on net sales worldwide, thus enhancing Biovest's ability to attract financing and strategic partners.

Identifying and acquiring additional late-stage clinical products, especially ones that are based on already approved drugs for new indications and/or new formulations pursuant to issued patents:

* We intend to focus on the development and commercialization of already approved products in new formulations or for new indications pursuant to issued patents in order to create more clinically and economically valuable products. These kinds of opportunities often can access the less costly and less time-consuming 505(b)(2) regulatory pathway, which allows sponsors to reference prior publications and approvals of the active pharmaceutical ingredient albeit in different formulations. SinuNase, as a unique formulation of the approved intravenous generic antifungal, amphotericin B, is a good example of this strategy. By focusing on these kinds of product opportunities, Accentia believes that it can expand its product offerings with less risk, less expense, and less time than required for new chemical entities (NCEs), which must use the 505(b)(1)1 regulatory pathway. Accordingly, we intend to pursue the acquisition of these kinds of additional products that could increase the value of our development pipeline and complement our existing products and product candidates. This may consist of product or technology acquisitions, in-licensing, or company acquisitions. Although our primary emphasis in acquiring new products will be in the respiratory and oncology therapeutic areas, including supportive care, we will consider products in other therapeutic areas that meet our stringent criteria.

Financing

* We intend to use any forthcoming upfront and milestone payments related to potential commercial partnerships for SinuNase and BiovaxID in the U.S. and internationally to retire, in part or in whole, convertible debt and thereby reduce dilution and interest expense.

About Accentia Biopharmaceuticals, Inc.

Accentia Biopharmaceuticals, Inc. is a biopharmaceutical company focused on the development of late-stage "disruptive" clinical products. Accentia has a portfolio of currently marketed respiratory products and a pipeline of products in clinical development. The company's lead respiratory product candidate is SinuNase(TM), which is under clinical development to treat chronic sinusitis (rhinosinusitis). SinuNase is a novel application and formulation of a known anti-fungal exclusively licensed from the Mayo Foundation for Medical Education and Research. The product has been Fast Tracked by the FDA and the Company has commenced a Phase 3 clinical trial. The Company's other lead product is BiovaxID(TM), a patient-specific anti-cancer vaccine for the treatment of follicular non-Hodgkin's lymphoma. BiovaxID, which is being developed by Accentia's subsidiary Biovest International, Inc., (OTCBB:BVTI) is currently in a Fast-Tracked Phase 3 clinical trial. Additionally, the Company has a family of respiratory specialty pharmaceutical products, including MD Turbo(TM), an FDA approved, commercially available product that transforms over 90% of dispensed metered-dose inhalers into a breath-activated, dose-counting inhaler. For further information, please visit www.accentia.net.

About Biovest International, Inc.

Biovest International, Inc. (OTCBB: BVTI.OB) is a pioneer in the development of advanced individualized immunotherapies for life-threatening cancers of the blood system. Biovest is a majority owned subsidiary of Accentia Biopharmaceuticals, Inc. with its remaining shares publicly traded. Biovest has a foundation in the manufacture of biologics for research and for clinical trials. In addition, Biovest develops, manufactures, and markets patented cell culture systems, including the AutovaxID, which is being developed as an automated vaccine-manufacturing instrument. Biovest's therapy for follicular non-Hodgkin's lymphoma, BiovaxID, is currently in a Phase 3 pivotal clinical trial at over 20 major centers in the U.S. being conducted under a Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute. For further information, please visit Biovest's website: http://www.biovest.com.

Forward-Looking Statements 

Statements in this release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, statements about SinuNase, BiovaxID, Autovaxid and any other statements relating to products, product candidates, product development programs the FDA or clinical trial process including the commencement, process or completion of clinical trials or the regulatory process. Such statements may include, without limitation, statements with respect to the Company's plans, objectives, expectations and intentions and other statements identified by words such as "may," "could," "would," "should," "believes," "expects," "anticipates," "estimates," "intends," "plans" or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results of Accentia to be materially different from historical results or from any results expressed or implied by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties related to the progress, timing, cost, and results of clinical trials and product development programs; difficulties or delays in obtaining regulatory approval for product candidates; competition from other pharmaceutical or biotechnology companies; and the additional risks discussed in filings with the Securities and Exchange Commission. All forward-looking statements are qualified in their entirety by this cautionary statement, and Accentia undertakes no obligation to revise or update this news release to reflect events or circumstances after the date hereof.