Cell Pathways Reaches Agreement in Principle to Settle 1999 Securities Class Action Lawsuit.

Business Editors & Health/Medical Writers

BIOWIRE2K

HORSHAM, Penn.--(BW HealthWire)--June 7, 2001

Cell Pathways, Inc. (NASDAQ: CLPA) today announced that the Company has reached an agreement in principle with plaintiffs to settle all claims in the consolidated 1999 securities class action lawsuit pending against Cell Pathways and its officers in United States District Court in Philadelphia. The settlement amount, $3.75 million, will be funded by the Company's insurance carrier. The settlement is subject to execution of a final agreement, court approval, and notice and an opportunity to object being provided to the shareholder class.

"While we vigorously deny allegations of any wrongdoing, we believe that agreeing to this settlement is in the best interest of our shareholders to avoid the further distraction of this litigation," said Robert J. Towarnicki, chairman, president and chief executive officer of Cell Pathways.

Cell Pathways, Inc., headquartered in Horsham, Pennsylvania, is a development stage pharmaceutical company focused on the research, development and commercialization of novel and unique medications to prevent and treat cancer. For additional information on Cell Pathways, Inc., visit the company's web site at http://www.cellpathways.com.

Certain statements made herein, and oral statements made in respect hereof, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are those which express plan, anticipation, intent, contingency or future development and/or otherwise are not statements of historical fact. These statements are subject to risks and uncertainties, known and unknown, which could cause actual results and developments to differ materially from those expressed or implied in such statements, including the risk that the settlement of the 1999 class action securities litigation will not receive court approval or for other reasons will not be completed and the risk that the 2001 securities class action will not be resolved in a manner that will minimize the distraction caused by that litigation. These and other risks are detailed in the Company's reports filed from time to time under the Securities Act of 1933 and/or the Securities Exchange Act of 1934. You are encouraged to read these filings as they are made. They are available over the Internet from the SEC in its EDGAR database. Investors are cautioned not to place undue reliance on any such forward-looking statements, any of which may turn out to be wrong due to inaccurate assumptions, unknown risks, uncertainties or other factors. No forward-looking statement can be guaranteed; actual future results may vary materially. Both forward-looking statements and statements of historic fact must be understood in the context of the risks referred to above which characterize the Company's development stage business. The Company undertakes no obligation to update or revise the statements made herein or the factors which may relate thereto.