Cell Pathways Signs Agreement with John O. Butler Company for Marketing of Gelclair to U.S. and Canadian Dental Markets.

Business Editors and Health/Medical Writers

BIOWIRE2K

HORSHAM, Pa.--(BUSINESS WIRE)--Aug. 21, 2002

Cell Pathways, Inc. (Nasdaq:CLPA) today announced the signing of a four-year marketing agreement with the John O. Butler Company, a leading international supplier of oral health care products, for Gelclair(TM) Concentrated Oral Gel. John O. Butler will market Gelclair to the dental market within the United States. Butler will also market Gelclair in Canada, once the product is approved for sale in that country. Financial terms of the agreement were not disclosed.

Gelclair, a prescription bioadherent oral gel, received clearance by the U.S. Food and Drug Administration in December 2001 as a medical device for the management and relief of oral pain due to various causes. In addition to oral mucositis, a large cancer treatment-related market opportunity addressed by Cell Pathways through its own oncology sales force, the dental indications include irritation due to oral surgery, traumatic ulcers caused by braces or ill-fitting dentures or disease and diffuse aphthous ulcers.

"Based on our market research, we believe that Gelclair addresses an opportunity of approximately $100 million within the dental market," said Robert J. Towarnicki, Cell Pathways' chairman and chief executive officer. "John O. Butler is a leading provider of quality oral health care products, and we are delighted to partner with them in the United States and Canada to help realize the full market potential of Gelclair outside the oncology arena."

"We believe that Gelclair addresses a significant unmet need for safely and effectively relieving oral pain, and we are very pleased to obtain U.S. and Canadian dental marketing rights for Gelclair," said Tom Studney, vice president of New Product and Business Development at John O. Butler. "We expect to introduce Gelclair to the dental market within the next 90 days."

About Gelclair Concentrated Oral Gel

Gelclair, a bioadherent oral gel, adheres to the mucosal surface of the mouth where it creates a protective film barrier. This barrier is designed to reduce oral pain by protecting irritated tissue and exposed or sensitized underlying nerve endings from over-stimulation. Gelclair is provided in 15 ml, single-dose packets whose contents are mixed with one to three tablespoons of water prior to use. The product is intended to be used at least three times daily or as needed, and should be applied at least one hour before eating and drinking. Gelclair has no known interactions with medications or other products. Federal law restricts Gelclair to sale by or on the order of a physician or properly licensed medical practitioner.

About John O. Butler Company

John O. Butler Company, along with its parent company, Sunstar, Inc., is committed to advancing oral health worldwide through quality oral health care products and a leadership role in education, innovation, and partnership with consumers and dental professionals. In addition to its U.S. operations in Chicago, Illinois, the company has subsidiaries or branch operations in Canada, Germany, France, Italy, Spain, and Sweden, as well a distributor network covering 40 other countries.

About Cell Pathways

Cell Pathways, Inc., headquartered in Horsham, Pa., is a development stage pharmaceutical company focused on the discovery, development and commercialization of novel and unique medications to treat and prevent cancer and to treat certain inflammatory diseases. The company additionally markets and sells oncology-related products manufactured by others. For additional information on Cell Pathways, Inc., visit the Company's web site at http://www.cellpathways.com.

Editor's Note: Gelclair is a trademark of Sinclair Pharma, Ltd.

Certain statements 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. Statements of historic fact must also be understood in the context of, and subject to, these risks. Such risks and uncertainties relate to, among other factors: early stage of development; absence of approved products; history of operating losses; the need for further financing, whether through issuance of equity or debt, corporate collaborations or strategic alliances, or revenues generated from the marketing and/or distribution of in-licensed products; dependence on the development, regulatory approval and market acceptance of one or more of our product candidates for one or more significant disease indications; the costs, delays and uncertainties inherent in scientific research, basic pharmaceutical research, drug development, clinical trials and the regulatory approval process, with respect to both our current product candidates and our future product candidates, if any; the risks that CP461 will not exhibit safety and efficacy in its current and future clinical trials in cancer indications, in Crohn's disease or in any other disease indication; the risks that accrual of our Phase III trial of Aptosyn(R) and Taxotere(R) is not completed by year-end and that safety and efficacy are not demonstrated by this combination therapy in this trial; limitations on, or absence of, the predictive value of data obtained in laboratory tests, animal models and human clinical trials when planning additional steps in product development; uncertainty that additional studies, if any, of Aptosyn(R), CP461 or any other compound may not be positive; uncertainty of obtaining regulatory approval of any compound for any disease indication whether due to adequacy of the development program, changing regulatory requirements or otherwise; the risk that the Company does not conduct the clinical studies it may have planned to conduct or does not pursue development plans it may have planned to pursue; the risk that the U.S. Food and Drug Administration may stop or delay any clinical study for reasons of safety or otherwise; the risk that a registration strategy for CP461 in cancer is not fully developed by year-end, whether due to the nature or timing of further clinical results or otherwise; the risk that clinical studies do not result in the safety and efficacy necessary to obtain regulatory approvals; the risks of conducting clinical trials, including the risk of conducting clinical trials of our drugs in combination with other drug therapies; the commercial risk and risk of liability in marketing and selling Gelclair Concentrated Oral Gel, including the risk that the prescribers do not prescribe the product and sales do not materialize, the risk that the market opportunity available to Gelclair is smaller than estimated, due to inaccurate assumptions, competition or other factors, the risks associated with the product launch, manufacturing and marketing risks, and the risk that the Company's sales of Gelclair are less than the Company's minimum purchase obligations; the risk that the John O. Butler Company may fail to rapidly and effectively promote the use of Gelclair in the dental market; the commercial risk and risk of liability in providing marketing services promoting Nilandron(R) (nilutamide) manufactured by Aventis Pharmaceuticals, Inc., including the risk that Aventis' sales of Nilandron do not exceed the threshold entitling the Company to a percentage of gross margin; the risk that the Company may enter into, or may fail to enter into, licensing, partnership or collaborative arrangements or strategic alliances which accord to other companies rights with respect to one or more Company compounds, technologies or programs in exchange for financing and operational assistance, or in which the Company acquires rights and obligations; the volatility of the market price of our Common Stock; our ability to sell securities registered under the shelf registration statement or otherwise; the risk of dilution through the effects of further financings or strategic alliances; acceptance of any product candidates by physicians and providers of healthcare reimbursement; the actions of competitors; the pace of technological changes in the biopharmaceutical industry; dependence upon third parties; the validity, scope and enforceability of patents; the risk of pending or future class action securities litigation; potential product liability claims; and availability and adequacy of insurance. These and other risks are detailed in our reports filed from time to time under the Securities Act and/or the Securities Exchange Act, including the sections entitled "Business," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Other Events" in our annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K and in such registration statements on Form S-3 as we may file from time to time. You are encouraged to read these filings as they are made. They are available over the Internet from the SEC in its EDGAR database at http://www.sec.gov and from the Company. Given the uncertainties affecting pharmaceutical companies in the development stage, you 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, and subject to, the risks referred to above which characterize our development stage business. We undertake no obligation to update or revise the statements made herein or the risk factors that may relate thereto.