Novelos Therapeutics, Inc. (OTCBB: NVLT), a biopharmaceutical company developing therapeutics to treat cancer and hepatitis, today announced that Novelos entered into a definitive agreement with institutional investors to sell units consisting of an aggregate of 21,428,576 shares of its common stock and five-year warrants to purchase up to an aggregate of 16,071,434 shares of its common stock at an exercise price of $0.07 per share, for gross proceeds of $1.5 million. The net proceeds of the offering, after deducting $120,000 in placement agent fees and an estimated $130,000 in other transaction expenses, are estimated to be $1.25 million. Each unit consists of one share of common stock and a warrant to purchase 0.75 shares of common stock. The price per unit at which the units are being sold in the offering is $0.07.

In connection with obtaining the consent of our preferred stockholders for the transaction, we will issue five-year warrants to them for the purchase of up to an aggregate of 16,071,434 shares of common stock at an exercise price of $0.105 per share following the consummation of the transaction.

“This financing will provide us with capital into Q2 of 2011,” said Harry Palmin, President and CEO of Novelos. “We will seek to design a larger randomized controlled trial in breast cancer based on a recent positive Phase 2 result, as well as explore NOV-002 clinical development in other solid tumors in combination with immunogenic chemotherapies. Meanwhile, we intend to expand our pipeline through licensing or acquiring clinical-stage oncology compounds, utilizing our experienced and proven development team.”

The shares and warrants were offered by the Company pursuant to an effective registration statement filed with the Securities and Exchange Commission and declared effective on July 8, 2010. This press release is not an offer to sell or the solicitation of an offer to buy securities.