Dow Jones 10623.15 -17.76 1:07 pm PST, August 1, 2005  NASDAQ 2195.38 +10.55 For info, visit access.smallcapnetwork.com S & P 500 1235.34 +1.16 Change your subscription status here Russell 2000 683.61 +3.86 VOLUME 05: ISSUE 58  Trading Alert: Novelos - Compounds Beat Up On Cancer and Hepatitis. Before we detail the amazing potential of the cancer/hepatitis fighting therapies developed by Massachusetts-based Novelos Therapeutics (OTCBB: NVLT), we thought that as a reference, it would be of value to table our past smallcap biotech picks. As you can see, we're extremely particular as to the companies we follow and are very pleased to welcome Novelos to that number. We are confident that investors will find the Novelos story --which SmallCap readers are among the first to hear of--unique and, in our opinion extremely profitable as the company executes its solid plan to bring it's impressive life-saving therapies through Phase testing and to eventual commercialization.  There's a lot to this story, but the premise is simple: save and/or improve the quality of patients' lives afflicted with some of the world's deadliest diseases. Read on... Salient Investor Points Regarding Novelos: Came public June 2005 @ $2.00. Company well under the radar, for now. 26 million shares outstanding/Market Cap approximately $80 million. Proprietary Oxidized Glutathione-based compounds. Seven patents granted and 30 more filed worldwide. Oxidized Glutathione-based compounds simple to manufacture: inexpensive and scaleable. NOV-002 primarily a therapy for improving treatment of cancer in conjunction with chemotherapy. Lung Cancer market alone roughly $1 billion. NOV-002 clinical data shows effectiveness in treating platinum-refractory (chemotherapy resistant) ovarian cancer. HomeLand Security potential as NOV-002 demonstrates effectiveness in the treatment of radiation exposure from weapons (dirty bombs) or nuclear accidents.  Russian studies completed and NOV-002 product approved under name 'Glutoxim' in Russia (marketed by an unrelated company). Has been successfully administered to over 5000 patients. Phase 1/2 US lung cancer study completed for NOV-002--results pending. NOV-205 shown in Russian studies to reduce or eliminate viral loads in Hep-B and Hep-C patients. Hepatitis C market expected to grow to $10 billion by 2012. Solid US Clinical Development plan for both compounds. Novelos: Russian Experience Markedly Reduces Investor Risk We believe that the potential for Novelos' products for the treatment of cancer and hepatitis is extremely compelling and suggest accumulation for long-term investors. First of all it is important to note that Novelos owns the intellectual property rights (other than Russia) related to both of its clinical compounds--NOV-002 and NOV-205--as well as other pre-clinical compounds based on oxidized glutathione, a natural metabolite. NVLT's compounds are believed to act via glutathiolation of critical regulatory immune function, tumor progression (in combination with chemotherapy), and drug detoxification. Both of Novelos' compounds have completed clinical trials in Russia and are approved for use in that country. In the treatment of Non Small Cell Lung Cancer (NSCLC) the administration of NOV-002 increased the one-year survival rate from 17 percent to 63 percent. As the US has a 35 percent one-year NSCLC survival rate, the Russian study improves on that number by 80 percent. (see chart below)  Novelos President Harry Palmin stated: "Taking NOV-002 in combination with toxic chemotherapy, patients in Russian clinical studies immediately began to feel better, their blood and immune indices improved, they were able to take more cycles of chemotherapy, all of which translated into a survival advantage". Novelos has completed a US Phase 1/2 NOV-002 trial and preliminary results will likely confirm the Russian experience. Novelos plans a Phase 3 trial in Q2 2006. The lung cancer market in the US is approximately $1 billion. One really exciting aspect to NOV-002 is its potential effectiveness in increasing the receptivity and sensitivity of chemotherapy to currently resistant cancers such as ovarian. This $280 million market lacks effective treatments, as do other types of ' platinum resistant' cancers. NOV-002 could well improve the survival rate for those patients with these treatment-resistant forms of cancer by improving the diseases' reception to chemotherapy, which to date has had little or no effect. NOV-205 Beats up on Hepatitis B and C. Picture, thousand words; you know the rest.  The following chart below shows the effectiveness of NOV-205 in the treatment of Hepatitis B and C courtesy of recent Russian studies. Pay particular attention to the lower  Hep'  C' graphic. Hepatitis C is a particularly nasty disease. It is a potentially fatal liver infection. The global treatment market is expected to exceed $10 billion by 2012. The very few current treatments have vicious side effects and tend to be very expensive. NOV-205 has shown no toxicity so far and is inexpensive to produce, thereby giving a significant pricing/margin advantage. Current drugs are only indicated in 15-20 percent of cases. NOV-205 is anticipated to be useful in all Hep C cases. Two-month treatments of NOV-205 in the Russian studies reduced the viral load below the point of detection in 50 percent of patients and substantially improved liver function. Nothing else, so far, even comes remotely close to this result--especially with the impressive safety and efficacy profile. Simple, Inexpensive and Already Effective... In our opinion, Novelos represents a company that has simple, safe and inexpensive proprietary therapies to treat some of the world's truly devastating afflictions. Investors should be impressed not only with the technology, but with the in-depth data gained from years of study, administration and patient success in Russia. As well, and just as importantly is the strong patent profile the company has secured, particularly in the US, Japan and Europe. Novelos is focused and well capitalized (release below). We are also awaiting the results of its Phase 1/2 NOV-002 trial, which are expected to support the previous Russian findings. The company appears to know exactly what it wants to do, when it will do it and is executing on schedule. As we mentioned in our previous piece, Novelos, as a Phase1/2 company should be higher in the $70-$100 million market cap range represented in other companies. As the company progresses through the regulatory requirements and moves to commercialization, we believe that the share price will rise in concert. In essence, NVLT is currently at the lower end of that range, so we see lots of room for share price growth. Novelos' products work, as noted by the extensive Russian experience and studies. Investors who want to participate in the amazing potential that we feel Novelos represents should accumulate at current levels. We expect great things from Novelos and look forward to bringing you opinion and commentary as this unique and exciting story unfolds. We suggest that investors strongly consider a position in Novelos in the biotech portion of a portfolio for what we feel will be superior long-term gains. NB: EDEN ENERGY (OTCBB: EDNE) shareholders/traders need to go to the SCBLOG for an important trading announcement regarding the recent run-up in the EDNE share price.     Press Release NOVELOS THERAPEUTICS COMPLETES $4 MILLION FINANCING NEWTON, Mass., August 1, 2005 -- Novelos Therapeutics, Inc. (OTCBB: NVLT), a biotech company focusing on oxidized glutathione for use in fighting cancer and hepatitis, announced today that it has completed a private offering of $4,150,000 to accredited investors. The Company sold a total of 166 Units, each Unit consisting of 20,000 shares of common stock and a three-year warrant to purchase 10,000 shares of common stock at an exercise price of $2.25 per share, at a purchase price of $25,000 per Unit.  The proceeds from this transaction will be used for general corporate purposes, including clinical trials, research and development.  vFinance Investments, Inc. and Mercer Capital, Ltd. were the placement agents for the offering. About Novelos Therapeutics, Inc. Novelos Therapeutics, Inc. (OTCBB: NVLT) was established in 1996 to commercialize two promising oxidized glutathione based compounds, NOV-002 and NOV-205, for the treatment of cancer and hepatitis.  Both compounds have completed clinical trials in humans and have been approved for use in the Russian Federation where they were developed.  NOV-002, marketed in Russia by an unrelated entity under the trade name GLUTOXIM®, has been administered to over 5,000 patients, demonstrating clinical efficacy and excellent safety data.  The U.S. based Phase 1/2 clinical trial of NOV-002 for lung cancer has been completed.  The Company plans to file an IND with the FDA for NOV-205 as a mono-therapy for hepatitis C in 2005. About the Products NOV-002, the lead compound, is being developed to treat non-small cell lung cancer (NSCLC).  NOV-002 is designed to act as a cytoprotectant and an immunomodulator.  When used in combination with chemotherapy, NOV-002 increased the one-year survival rate from 17% to 63% in a Russian study, a result that also represents an 80% improvement above the U.S. 35% current standard of care.  A U.S. Phase 1/2 clinical study has been completed. NOV-002 is also being developed to treat refractory (that is, not responsive to chemotherapy) ovarian cancer.  Two additional clinical indications, radiation protection and psoriasis, will also be investigated for NOV-002. NOV-205 is being developed to treat chronic hepatitis C in the U.S.  NOV-205 is designed to act as a hepatoprotective agent with immunomodulating and antiviral activity.  In Russian clinical studies, when used as mono-therapy for one month in hepatitis B and for two months in hepatitis C, NOV-205 has been shown to greatly reduce or eliminate viral loads and to vastly improve liver function relative to existing drugs on the market.   COMPANY CONTACT Harry S. Palmin, President and Acting CEO Novelos Therapeutics, Inc. One Gateway Center, Ste. 504 Newton, MA 02458 Ph: 617-244-1616 ext.11 Fax: 631-574-3130 Email: hpalmin@novelos.com INVESTOR RELATIONS Stanley Wunderlich, CEO Consulting for Strategic Growth 800 Second Avenue New York, NY 10017 Ph: 800-625-2236 Fax: 212-337-8089 Email: CFSG1@aol.com   This news release contains forward-looking statements.  Such statements are valid only as of today, and we disclaim any obligation to update this information.  These statements are subject to known and unknown risks and uncertainties that may cause actual future experience and results to differ materially from the statements made.  These statements are based on our current beliefs and expectations as to such future outcomes.  Drug discovery and development involve a high degree of risk.  Factors that might cause such a material difference include, among others, uncertainties related to the ability to attract and retain partners for our technologies, the identification of lead compounds, the successful preclinical development thereof, the completion of clinical trials, the FDA review process and other government regulation, our  pharmaceutical collaborators' ability to successfully develop and commercialize drug candidates, competition from other pharmaceutical companies, product pricing and third-party reimbursement. Consulting For Strategic Growth I, Ltd. ("CFSG") has a June 1, 2005, contract to provide Novelos with consulting, business advisory, investor relations, public relations and corporate development services for a three-month period.  In connection with these services, CFSG prepares press releases, corporate profiles, and other publications on behalf of the Company. Independent of CFSG's receipt of cash compensation from the Company, CFSG may choose to purchase the common stock of the Company and thereafter liquidate those securities at any time it deems appropriate to do so.   We Value Your Feedback Got comments, questions or suggestions? Send 'em on over: Editor@smallcapnetwork.com If you wish to send a written request or inquiry, please send it to our physical address: TGR Group, LLC 3525 Del Mar Heights Rd #334 San Diego, CA 92130 Subscribe Information is power and timely information is profitable. 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