DUSA Signs Clinical Trial Agreement With The National Cancer Institute, Division Of Cancer Prevention, For The Clinical Development Of Levulan'R' Pdt For Oral Cavity Dysplasia.

WILMINGTON, Mass. -- DUSA Pharmaceuticals, Inc. (NASDAQ:DUSA) today announced the signing of a second clinical trial agreement with the National Cancer Institute (NCI), Division of Cancer Prevention (DCP). The new agreement covers the clinical development of Levulan(R) photodynamic therapy (PDT) for the treatment of oral cavity dysplasia. It follows a similar agreement dated September 27, 2004, covering the treatment of high-grade dysplasia (HGD) within Barrett's Esophagus (BE). Levulan is DUSA's brand of aminolevulinic acid, or ALA.

DUSA and the NCI DCP will be working together to prepare an overall clinical development plan for Levulan PDT in oral cavity dysplasia, starting with a Phase I/II study and continuing through Phase III studies if appropriate. The immediate plan is for the NCI DCP to solicit clinical protocols from its extramural expert clinical investigator consortium, after which time DUSA and the NCI DCP will finalize the clinical trial design. The NCI DCP will use its resources to file its own IND. DUSA will provide Levulan, device(s) and the necessary training for the investigators involved in the studies. DUSA will maintain full ownership of its existing intellectual property and, subject to successful Phase II and III clinical trial results, intends to seek FDA approval in due course.

Oral Cancer and Dysplasia

Approximately 30,000 Americans will be diagnosed with oral cancer this year, and another 12,500 will be diagnosed with cancer of the larynx, or voice box. Risk factors include tobacco use and alcohol consumption. Some types of pre-malignancy, such as leukoplakia (visible as white patches seen on the lining of the oral cavity and larynx), are relatively common and affect approximately 2.1 million Americans. As many as 25% of leukoplakias are dysplastic at the first visit, and dysplasia currently appears to be the best predictor that a lesion will progress to cancer; There is currently no effective treatment for preventing progression of leukoplakia to cancer.

Independent investigator studies (a) have reported that ALA may be used to both identify and to remove dysplasia within the oral cavity and larynx. DUSA and the NCI DCP will be carrying out clinical testing of Levulan PDT to determine its potential to provide an entirely new approach to the prevention of oral cavity cancer.

Dr. Ramon Franco, Director of the Division of Laryngology at the Massachusetts Eye and Ear Infirmary, uses ALA-PDT to treat his patients with laryngeal keratosis. Dr. Franco states "Based on my experience with this experimental therapy to date, I believe that ALA-PDT holds great promise for the treatment of all oral precancers. There is currently no widely accepted treatment for oral precancers and the current standard of care is 'watchful waiting' for the development of cancer."

Stuart L. Marcus, MD, Ph.D., DUSA's VP Scientific Affairs and CMO, stated "We are very pleased that the NCI DCP is bringing its resources to bear on this collaborative clinical development effort. The treatment of oral cavity dysplasia is an example of a significant unmet medical need. Publications of the results of independent investigator studies in this area have reported positive results for ALA PDT in the treatment of oral cavity pre-cancers, using ALA given by both topical and systemic dosing. The goal of the new DUSA/NCI collaboration is the development of a simple, safe and effective treatment for this precancerous condition."

(a) Independent Investigator Reports

Tsai J, Chiang C, Chen H et al. Photodynamic Therapy of Oral Dysplasia With Topical 5-Aminolevulinic Acid and Light-Emitting Diode Array. Laser Surg Med 2004; 34: 18-24.

Ebihara A, Krasieva T, Liaw L et al. Detection and diagnosis of oral cancer by light-induced fluorescence. Lasers Surg Med 2003; 32: 17-24.

Sieron A, Adamek M, Kawczyk-Krupka A et al. Photodynamic therapy (PDT) using topically applied delta-aminolevulinic acid (ALA) for the treatment of oral leukoplakia. J Oral Pathol Med 2003; 32: 330-6.

Zheng W, Soo K, Sivanandan R et al. Detection of squamous cell carcinomas and pre-cancerous lesions in the oral cavity by quantification of 5-aminolevulinic acid induced fluorescence endoscopic images. Lasers Surg Med 2002; 31: 151-7.

Sieron A, Namyslowski G, Misiolek M et al. Photodynamic therapy of premalignant lesions and local recurrence of laryngeal and hypopharyngeal cancers. Eur Arch Otorhinolaryngol 2001; 258: 349-52.

Leunig A, Betz C, Mehlmann M et al. Detection of squamous cell carcinoma of the oral cavity by imaging 5-aminolevulinic acid-induced protoporphyrin IX fluorescence. Laryngoscope 2000; 110: 78-83.

Fan K, Hopper C, Speight P et al. Photodynamic therapy using 5-aminolevulinic acid for premalignant and malignant lesions of the oral cavity. Cancer 1996; 78: 1374-83.

DUSA Pharmaceuticals, Inc. is a biopharmaceutical company engaged primarily in the development and marketing of Levulan Photodynamic Therapy (PDT) and Photodetection (PD) for multiple medical conditions, with a primary focus on dermatology. PDT and PD utilize light-activated compounds to induce a therapeutic or detection effect. DUSA maintains offices in Wilmington, MA, Valhalla, NY and Toronto, Ontario.

Except for historical information, this news release contains certain forward-looking statements that involve known and unknown risk and uncertainties, which may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the statements made. These forward-looking statements relate to DUSA and NCI DCP's intention to work together on the clinical development of Levulan PDT, finalization of clinical trial designs, NCI DCP's intention to use its resources to file an IND, DUSA's intention to provide Levulan, devices and training, maintain ownership of potential intellectual property and seek FDA approval of a potential therapy in due course, the number of Americans will oral cancer and cancer of the larynx, and the belief that ALA-PDT holds promise for the treatment of oral precancers. Such risks and uncertainties include, but are not limited to, changing market and regulatory conditions, continuing FDA approval of therapies, maintenance of DUSA's patent portfolio, the ability of NCI DCP and DUSA to successfully collaborate on this clinical trial, NCI DCP's success in soliciting clinical protocols, finalization of clinical trial designs, results of clinical studies, the regulatory approval process and other risks identified in our SEC filings from time to time, including those contained in DUSA's Form 10-K for the year ended December 31, 2003 and other risks identified in DUSA's SEC filings from time to time.