Talon Therapeutics, Inc., (OTCBB:TLON), today reported financial results for the three and nine months ended September 30, 2011.

"In the third quarter of 2011, we achieved two significant accomplishments: the acceptance for filing of our NDA seeking accelerated approval of Marqibo® and the Special Protocol Assessment agreement for our Phase 3 confirmatory study, the HALLMARQ Trial. During the next several months leading up to our PDUFA date of May 13, 2012, we will be focused on preparing for an Oncology Drug Advisory Committee (ODAC) meeting, preparing for clinical and manufacturing pre-approval inspections, and initiating the HALLMARQ Trial. Our team is more committed than ever to our quest for FDA approval of Marqibo," stated Steven R. Deitcher, M.D. President, Chief Executive Officer and Board Member of Talon Therapeutics.

Recent Corporate Highlights:

• July 2011: Submitted NDA for Marqibo to the FDA
• July 2011: First patient enrolled in the Phase 1 Pediatric trial for Marqibo being conducted by the National Cancer Institute
• August 2011: Special Protocol Assessment agreement for our Phase 3 confirmatory study of Marqibo in newly diagnosed ALL
• August 2011: The Mayo Clinic and Talon completed an Investigator Initiated Clinical Trial Research Agreement for a randomized Phase 2 trial using Menadione Topical Lotion.
• September 2011: The NDA for Marqibo accepted for filing under Subpart H – Accelerated Approval with standard review.

Three Months Ended September 30, 2011 Financial Results

For the three months ended September 30, 2011, Talon reported a net loss of $706,000 and deemed dividends attributable to preferred stock of $1.0 million, which when combined, resulted in a net loss applicable to common stockholders of $1.7 million, or $0.08 per share. The deemed dividends attributable to preferred stock contributed $0.05 per share to the total net loss applicable to common stockholders for the three months ended September 30, 2011. This compared with a net loss of $7.9 million and deemed dividends attributable to preferred stock of $22.1 million, which when combined, resulted in a net loss applicable to common stockholders of $30.0 million, or $1.41 per share, for the three months ended September 30, 2010.

Total operating expenses for the three months ended September 30, 2011 were $3.4 million, compared with $10.3 million for the three months ended September 30, 2010. Research and development expenses were $2.4 million for the three months ended September 30, 2011, compared with $9.0 million for the same period in 2010. The decrease of $6.6 million reflects a one-time milestone payment of $5.75 million recognized in the condensed statement of operations for the three months ended September 30, 2010 and decreased activity in the third quarter of 2011 as a result of Talon's Marqibo NDA submission in July 2011. General and administrative expenses was $1.0 million for the three months ended September 30, 2011, compared with $1.3 million for the same period in 2010.

As of September 30, 2011, the Company had cash, cash equivalents and available-for-sale securities of $4.6 million. Cash used in operations was $6.0 million for the three months ended September 30, 2011.

Nine Months Ended September 30, 2011 Financial Results

For the nine months ended September 30, 2011, Talon reported a net loss of $17.2 million and deemed dividends attributable to preferred stock of $2.9 million, which when combined, resulted in a net loss applicable to common stockholders of $20.1 million, or $0.94 per share. The deemed dividends attributable to preferred stock contributed $0.14 per share to the total net loss applicable to common stockholders for the nine months ended September 30, 2011. This compared with a net loss of $19.7 million and deemed dividends attributable to preferred stock of $31.4 million, which when combined, resulted in a net loss applicable to common stockholders of $51.1 million, or $2.48 per share, for the nine months ended September 30, 2010.

Total operating expenses for the nine months ended September 30, 2011 were $14.8 million, compared with $19.3 million for the same period in 2010. Research and development expenses were $11.1 million for the nine months ended September 30, 2011, compared with $15.0 million for the same period in 2010. The decrease of $3.9 million reflects a one-time milestone payment of $5.75 million recognized in the condensed statement of operations for the nine-months ended September 30, 2010 offset by an increase in activity during the first two quarters of 2011 related to preparation for Talon's Marqibo NDA submission, which was completed in July 2011. General and administrative expenses were $3.7 million for the nine months ended September 30, 2011, compared with $4.3 million for the same period in 2010. 

Cash used in operations was $18.3 million for the nine months ended September 30, 2011.

About Marqibo (vincristine sulfate liposomes injection)

Marqibo is a novel, targeted Optisome™ encapsulated formulation product candidate of the FDA-approved anticancer drug vincristine. Talon is primarily developing Marqibo for the treatment of Ph- adult ALL. Vincristine, a microtubule inhibitor, is FDA-approved for ALL and is widely used as a single agent and in combination regimens for treatment for hematologic malignancies such as lymphomas and leukemias. Talon's encapsulation formulation is designed to provide prolonged circulation of the drug in the blood and accumulation at the tumor site. These characteristics are intended to increase the dose of vincristine delivered in a safe and effective manner. 

In July 2011, Talon submitted a New Drug Application seeking accelerated approval of Marqibo in Ph- adult ALL, in second or greater relapse or that has progressed following two or more prior lines of anti-leukemia therapy. The NDA was accepted for filing by the FDA in September 2011.  

Marqibo has also received orphan drug designation in adult ALL from the European Medicines Evaluation Agency.

About Talon Therapeutics

Talon Therapeutics, Inc. is a biopharmaceutical company dedicated to developing and commercializing new, differentiated cancer therapies designed to improve and enable current standards of care. Talon is developing its lead product candidate, Marqibo, primarily for the treatment of ALL and lymphomas. The Company has additional pipeline opportunities some of which, like Marqibo, are designed to improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity. Additional information on Talon Therapeutics can be found at www.talontx.com.

The Talon Therapeutics, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3290

Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are often, but not always, made through the use of words or phrases such as "anticipates," "expects," "plans," "believes," "intends," and similar words or phrases. These forward-looking statements include without limitation, statements regarding Talon's ability to obtain accelerated approval of Marqibo for the treatment of adult Ph- adult ALL, the potential of Marqibo to represent an improvement over and replace existing therapies, and the timing, progress and anticipated results of the clinical and regulatory development of Marqibo and Talon's other product candidates. Such statements involve risks and uncertainties that could cause Talon's actual results to differ materially from the anticipated results and expectations expressed in these forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties, which could cause actual outcomes and results to differ materially from these statements. Among other things, there can be no assurances that Talon will be able to secure the additional capital necessary to fund its product development programs, including Marqibo, to completion; that any of Talon's clinical and regulatory development efforts relating to Marqibo will be successful; that the data of the clinical trials of Marqibo will be sufficient to support approval by the FDA of an NDA for Marqibo; and that the results of the clinical trials of Marqibo will support Talon's claims or beliefs concerning Marqibo's safety and effectiveness. Further, Talon's reliance on third-party researchers to develop its product candidates and its lack of experience in developing and commercializing pharmaceutical products also pose risks to its ability to timely and successfully develop its product candidates. Additional risks are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 and its Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. Talon assumes no obligation to update these statements, except as required by law.

TALON THERAPEUTICS, INC.
CONDENSED BALANCE SHEETS
(In thousands)
(Unaudited)
	September 30,	December 31,
	2011	2010
ASSETS
Current assets:
Cash and cash equivalents	$ 4,580	$ 4,573
Available-for-sale securities	16	18,068
Prepaid expenses	162	254
Other current assets	31	--
Total current assets	$ 4,789	$ 22,895
Property and equipment, net	86	97
Restricted cash	--	125
Debt issuance costs	790	905
Total assets	$ 5,665	$ 24,022
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable, accrued liabilities and other short-term liabilities	$ 3,560	$ 6,054
Total current liabilities	3,560	6,054
Notes payable, net of discount	23,856	23,340
Other long-term liabilities	3	5
Investors' rights to purchase additional shares of Series A-1 and A-2 preferred stock	4,295	5,131
Warrant liabilities	956	713
Commitments and contingencies
Redeemable convertible preferred stock; $100 par value:
10 million shares authorized; 0.4 million shares issued and outstanding at September 30, 2011 and December 31, 2010; aggregate liquidation value of $45.3 million and $42.4 million at September 30, 2011 and December 31, 2010, respectively	30,643	30,643
Stockholders' deficit:
Common stock; $0.001 par value:
350 million shares authorized; 21.8 million and 21.2 million shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively	22	21
Additional paid-in capital	120,614	119,242
Accumulated other comprehensive income (loss)	--	(16)
Accumulated deficit	(178,284)	(161,111)
Total stockholders' deficit	(57,648)	(41,864)
Total liabilities, redeemable convertible preferred stock and stockholders' deficit	$ 5,665	$ 24,022

TALON THERAPEUTICS, INC.
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share data)
(Unaudited)
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
	2011	2010	2011	2010
Operating expenses:
General and administrative	$ 964	$ 1,253	$ 3,721	$ 4,300
Research and development	2,385	9,003	11,061	14,967
Total operating expenses	3,349	10,256	14,782	19,267
Loss from operations	(3,349)	(10,256)	(14,782)	(19,267)
Other income (expense):
Interest expense	(892)	(856)	(2,660)	(2,881)
Other expense, net	(1)	34	5	35
Change in fair market value of warrant liabilities	301	349	(495)	(35)
Impairment of available-for-sale	--	--	(76)	--
Change in fair market value of rights to purchase additional shares of Series A-1 and A-2 Preferred Stock	3,235	2,809	836	2,431
Total other income (expense)	2,643	2,336	(2,390)	(450)
Net loss	$ (706)	$ (7,920)	$ (17,172)	$ (19,717)
Dividends attributable to preferred shares	(1,005)	(22,060)	(2,919)	(31,367)
Net loss applicable to common stock	(1,711)	(29,980)	(20,091)	(51,084)
Net loss per share, basic and diluted	$ (0.08)	$ (1.41)	$ (0.94)	$ (2.48)
Weighted average shares used in computing net loss per share, basic and diluted	21,775	21,234	21,473	20,570
Comprehensive loss:
Net loss	$ (706)	$ (7,920)	$ (17,172)	$ (19,717)
Unrealized holdings gains (losses) arising during the period	(12)	(14)	(60)	(6)
Less: reclassification adjustment for other-than-temporary impairment included in net loss	--	--	76	--
Comprehensive loss	$ (718)	$ (7,934)	$ (17,156)	$ (19,723)

CONTACT: Talon Therapeutics, Inc.
         Investor & Media Contacts:
         Investor Relations Team
         (650) 588-6641
         investor.relations@talontx.com