Cell Pathways to Settle Securities Litigation.

Business Editors/Health & Medical Writers

BIOWIRE2K

HORSHAM, Pa.--(BW HealthWire)--Feb. 25, 2002

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 stockholder class action litigation filed in 2001. The settlement is subject to execution of a final agreement, approval by the United States District Court in Philadelphia and notice and an opportunity to object being provided to the shareholder class.

The agreement provides for the class action lawsuit to be settled for 1.7 million shares of Common Stock of Cell Pathways, Inc. to be issued by the Company and a sum of $2.0 million dollars. In connection with the settlement, the Company's insurance carrier will pay $2 million to the Company. The settlement will be recorded in the Company's financial statements in the fourth quarter of 2001.

"While we vigorously deny allegations of any wrongdoing, we believe that agreeing to this settlement is in the best interest of our shareholders to eliminate the burden and expense of further 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 future commercialization of novel and unique medications to treat and prevent cancer and the marketing of other oncology-related products. 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 class action securities litigation will not receive court approval or for other reasons will not be completed. 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.