Innocoll Agrees the Sale of its CollaRx(R) GENTAMICIN SURGICAL IMPLANT and European Sales and Marketing Infrastructure to EUSA Pharma

Innocoll, Inc. announced that it has agreed the sale of its CollaRx(R) GENTAMICIN SURGICAL IMPLANT and European sales and marketing infrastructure to EUSA Pharma Inc., a transatlantic specialty pharmaceutical company focused on oncology, pain control and critical care. The transaction provides EUSA with rights to Innocoll's GENTAMICIN SURGICAL IMPLANT, a biodegradable leave-behind surgical implant for the treatment and prevention of surgical site infections, for all worldwide markets except the US. Similar rights to Innocoll's two late stage development products, CollaRx GENTAMICIN TOPICAL for the treatment and prevention of diabetic foot infections and CollaRx BUPIVACAINE IMPLANT for the management of post-operative pain, were included as part of the transaction, together with an option to the US rights for the BUPIVACAINE IMPLANT. Innocoll will transfer to EUSA its pan-European sales and marketing infrastructure, which has a presence in over 20 European territories, as well as its distribution network covering more than 25 further countries around the world. Under the terms of the agreement, Innocoll will continue to manufacture and supply the products to EUSA and will progress the development of the late-stage clinical programs. In return, EUSA will make an upfront payment, pay development, regulatory and sales performance milestone fees and make an equity investment in Innocoll's parent company.

Commenting on the announcement, Dr. Michael Myers, President and CEO of Innocoll, Inc., said "In the relatively short time since acquiring the commercial rights to the Gentamicin Implant in 2005, we have successfully created a dedicated sales and marketing infrastructure and have seen substantial growth in product sales as a result. We believe EUSA is well positioned and fully committed to further build on the recent sales growth in Europe and expand into other international markets. Innocoll's products are an excellent fit with EUSA's corporate strategy and this transaction will ensure Innocoll is able to fully focus its own resources on the clinical development of Gentamicin Implant in the US where it is now entering phase 3, as well as on the global development of our other late stage products."

Bryan Morton, Chief Executive of EUSA Pharma said "Having learned of the excellent progress Innocoll has made in building a European sales and marketing presence it made strategic sense to partner with them to add it to our infrastructure and to work closely with them to bring the newer products to market. Innocoll's strength in development provides us with pipeline opportunities with outstanding potential".

About Gentamicin Surgical Implant

GENTAMICIN SURGICAL IMPLANT is a biodegradable leave-behind implant impregnated with the broad spectrum aminoglycoside antibiotic, gentamicin. It was developed using Innocoll's proprietary collagen-based technology, CollaRx(R), and is indicated as an adjunct to systemic antibiotic therapy for the treatment and prevention of post-surgical acquired infection in both hard and soft tissues. There are approximately 60 prospective clinical trials and published case reports totalling over 7,500 patients documenting its safety and efficacy over a broad range of orthopaedic, colorectal, cardiothoracic, vascular and neurosurgical procedures. One such clinical trial involving 2,000 patients undergoing a full median sternotomy during cardiac surgery demonstrated a 53% reduction in the incidence of sternal wound infection when the product was used as an adjunct to standard infection prophylaxis. GENTAMICIN SURGICAL IMPLANT has been approved in 49 countries in Europe, Latin America, Middle East, Africa and Asia and is marketed under the following trade names; COLLATAMP(R) G, COLLATAMP(R) EG, SULMYCIN(R) IMPLANT, GARAMYCIN(R) SCHWAMM, DURACOL(R), DURACOLL(R), GENTACOL(R), GENTACOLL(R), GARACOL(R), GARACOLL(R) and CRONOCOL(R). An IND has been filed with FDA and the product is expected to commence phase 3 clinical trials in the US later this year.

About CollaRx(R) Gentamicin Topical

CollaRx GENTAMICIN TOPICAL is a biodegradable collagen-based dressing that is under clinical development for the topical treatment and prevention of infected diabetic foot ulcers. The product is already approved and marketed in Europe as Gentamicin Surgical Implant and various clinical case studies and anecdotal reports from clinicians strongly suggest the product is similarly effective for the topical treatment and cure of infected chronic wounds, including diabetic foot ulcers. Currently, there are no topically applied antibiotics marketed in Europe or the US that are specifically indicated for the treatment of infected diabetic foot ulcers. Innocoll plans to study the treatment of diabetic foot infections of varying severities in a series of phase 2 clinical trials scheduled to commence later this year under an approved IND. The lead indication is for the treatment of ulcers with a mild infection, where CollaRx GENTAMICIN will be compared to an orally administered antibiotic, the current standard of care. In other planned trials, Innocoll will investigate the product as an adjunct to systemic therapy for treating infections of higher severity and also as a prophylactic treatment to prevent ulcers from becoming clinically infected.

About CollaRx(R) Bupivacaine Implant

CollaRx BUPIVACAINE IMPLANT is biodegradable and fully resorbable surgical implant impregnated with the local anesthetic, bupivacaine. The product is formulated using Innocoll's proprietary CollaRx sponge technology and is currently under development for the management of post-operative pain following moderate/major abdominal, gynecological, thoracic or orthopedic surgeries. The collagen matrix naturally biodegrades over a few days during which time the bupivacaine is released to provide sustained local analgesia. The results of an initial clinical study performed at Wexham Park Hospital, Slough, UK in patients undergoing hysterectomy surgery were particularly encouraging in achieving the desired analgesic effect. In March 2007, Innocoll filed an IND and is planning to conduct a series of phase 2 clinical trials in the US commencing later this year.

About EUSA Pharma

EUSA Pharma is a rapidly growing transatlantic specialty pharmaceutical company focused on in-licensing, developing and marketing late-stage oncology, pain control and critical care products. The company currently has 5 products on the market, including Erwinase(R) and Kidrolase(R) for the treatment of acute lymphoblastic leukemia, and Rapydan(TM), a rapid-onset anaesthetic patch. Supported by leading life science investors, Essex Woodlands, 3i, Goldman Sachs, Advent Venture Partners, SV Life Sciences, NeoMed and NovaQuest, EUSA Pharma has raised over $225 million and completed three significant acquisitions since its founding in May 2006. Maintaining its focus on oncology, pain control and critical care, the company is currently seeking partners for the non-core development programs it gained as part of its recent acquisitions, in Alzheimer's disease, multiple sclerosis, anti-psychosis and inflammatory diseases. For more information, please visit http://www.eusapharma.com.

About Innocoll, Inc.

Innocoll is a privately held, specialty pharmaceutical company focused on surgical and dermatological products. It develops and manufactures a range of pharmaceutical products and medical devices using its proprietary collagen- based technologies, CollaRx(R) and Liquicoll(R). Innocoll 's lead product, Gentamicin Surgical Implant for the treatment and prevention of surgical site infections, is approved for sale in 49 countries and entering phase 3 development in the US. Other late stage pharmaceutical products in Innocoll's development pipeline include CollaRx Gentamicin Topical for the treatment and prevention of infected diabetic foot ulcers and Bupivacaine Implant for the management of post-operative pain, both of which are currently in Phase 2 development. For more information, please visit http://www.innocoll.com.