CASI Pharmaceuticals, Inc (DE) - Annual Report: 2007 (Form 10-K)

          ENMD-1198. We discovered a New Chemical Entity (NCE) that inhibits tumor growth based on modifying the chemical structure of 2-methoxyestradiol (2ME2) to increase its antitumor and antiangiogenic properties, as well as decrease its rate of metabolism. The lead compound from this program, ENMD-1198, demonstrated improved pharmacokinetic parameters and improved metabolism while maintaining 2ME2’s multiple mechanisms of action.

          ENMD-1198 has shown positive antitumor activity in several preclinical animal models. Preclinical data demonstrated that oral administration of ENMD-1198 leads to pronounced in vivo antitumor activity in cancer models, resulting in a reduction of tumor burden and/or an increase in survival when compared to controls. Oral daily treatment with ENMD-1198 in an orthotopic animal model of human breast cancer led to the disruption of microtubules within tumor cells and a substantial decrease in tumor cell proliferation and angiogenesis. Combination studies with ENMD-1198 and another microtubule targeting agent commonly used in the treatment of leukemias, vincristine, demonstrate synergistic effects on leukemia cells in vitro and tolerability of doses that prolonged survival in leukemia xenograft models. ENMD-1198 was evaluated in a preclinical model of non-small cell lung cancer (NSCLC) and demonstrated a three-fold increase in survival compared to Cisplatin, an approved agent for the treatment of this disease. Approximately 80% of the ENMD-1198 treated models remained on study until tumor dissemination evaluation. In prior preclinical studies, ENMD-1198 has been shown to be an orally-active, antimitotic agent that leads to arrest of cell division and apoptosis in tumor cells. ENMD-1198 also exerts antiangiogenic activity that further contributes to its overall antitumor effects.

          ENMD-1198 is currently in a Phase 1 trial to evaluate the safety, tolerability, pharmacokinetics, and clinical benefit of ENMD-1198 in patients with advanced cancer. We anticipate completing enrollment for the Phase 1 study and reporting interim results in the second half of 2008.

          2ME2 for Rheumatoid Arthritis. The mechanisms ascribed to 2ME2, namely antiangiogenesis, pro-apoptosis, down regulation of HIF-1á, and inhibition of bone resorption, have implicated its use in diseases with inflammatory components, such as rheumatoid arthritis (RA). We and our collaborators have now established the dose-dependent, antiarthritic activity of 2ME2 following oral administration in four distinct animal models of rheumatoid arthritis. This activity has been manifested as an inhibition in 1) the infiltration of inflammatory cells, 2) pannus formation, 3) cartilage lesions, and 4) bone resorption.

          Treatment with 2ME2 has resulted in a dose-dependent decrease in the severity of RA disease in preclinical models, strongly suggesting disease-modifying anti-rheumatic drug (DMARD) activity — the potential to treat the underlying pathology of rheumatoid arthritis, rather than merely treating symptoms such as pain. Based on these results, we conducted IND-enabling toxicology studies for 2ME2 in rheumatoid arthritis. The use of Panzem^Ò for rheumatoid arthritis opens the possibility to cross over with 2ME2 from oncology into a therapeutic area with a large, still underserved market.

          In January 2008, the Food and Drug Administration (FDA) accepted our Investigational New Drug (IND) application. Our strategy in 2008 and 2009 will be to initiate early clinical trials internally and then seek a development partner for larger multi-center clinical trials. We anticipate initiation of a healthy volunteer trial during the second half of 2008.

          Aurora Kinase Inhibitors. Aurora kinases are key regulators of the process of mitosis, or cell division, and are often over-expressed in human cancers. Specifically, one of these compounds, ENMD-2076, is a multi-target kinase inhibitor with a unique selectivity profile and multiple mechanisms of action, including antiproliferative activity and the inhibition of angiogenesis. ENMD-2076 is a novel, angiogenesis kinase inhibitor with potent activity against Aurora A and tyrosine kinases linked to promoting cancer and inflammatory diseases. ENMD-2076 acts through multiple pathways resulting in antiproliferative activity and the inhibition of angiogenesis. ENMD-2076 has demonstrated substantial dose-dependent efficacy as a single agent in multiple xenograft models, including tumor regression in breast, colon, and leukemia models. Importantly, ENMD-2076 is an oral agent that has shown an acceptable toxicity profile in preclinical studies without cardiovascular effects.

          ENMD-2076 is unique in class because it not only inhibits Aurora A selectively over Aurora B, it also inhibits a number of other kinases important in the growth of tumors and, in particular, growth factor receptors critical to angiogenesis. ENMD-2076 has potent antitumor activity in multiple preclinical models including both solid tumors and hematological cancers.

          We have an active IND for ENMD-2076 and Phase 1 studies in solid tumors (1H08) and hematological cancers (2H08) are planned.

PRECLINICAL PIPELINE

          Our preclinical compound is also based on our scientific expertise in angiogenesis, cell cycle regulation and inflammation. Our strategy is to continue adding value to our pipeline by advancing our best preclinical assets forward into clinical development, while selectively exploring strategic alliances and co-development partners.

          HDAC Inhibitors. Inhibitors of histone deacetylases (HDACs) are emerging as a promising new class of anticancer agents. Inhibition of HDAC activities in cancer cells leads to inhibition of tumor cell proliferation, cell cycle arrest and induction of apoptosis. The recent approval of an HDAC inhibitor has provided clinical validation for the concept of HDAC inhibition in the treatment of cancer, and numerous HDAC inhibitors are currently being tested in clinical trials.

          EntreMed has developed a series of novel, potent HDAC inhibitors that are currently in preclinical evaluation. The Company’s portfolio of HDAC inhibitors encompasses several chemically distinct series of compounds. Comparisons in vitro and in vivo with benchmark compounds indicate that EntreMed’s HDAC inhibitors have superior potency and efficacy, and are potentially less toxic. Additionally, a chemical scaffold that can confer selectivity between Class I and II HDAC isoforms has been identified within a novel chemical series. Multiple patent applications have been filed, providing excellent protection as well as a good opportunity for second-generation molecules based on existing intellectual property.

BUSINESS DEVELOPMENT STRATEGY

          Oncology is our principal clinical and commercial focus, although recent data support further development of our compounds in certain non-oncology applications, such as rheumatoid arthritis. As a result, our strategy is to continue developing compounds for oncology and inflammatory diseases, while selectively exploring strategic alliances for our compounds in other therapeutic areas. We may pursue co-development partners for our core pipeline product candidates to help accelerate their development and strengthen the development program with complementary expertise. Likewise, we can provide our co-development partners with substantial know-how relating to small molecules that inhibit angiogenesis and inflammation, as well as regulate cell cycle pathways.

          Oncology Focus with Multi-Therapeutic Potential. We focus primarily on oncology. MKC-1 and Panzem^Ò NCD are currently in multiple Phase 2 clinical studies in cancer. ENMD-1198 is currently in Phase 1b dose-escalation studies in advanced cancer patients. These product candidates play to our strength in angiogenesis, cell cycle regulation and inflammation.

          Commercialization Goal. Our goal is to commercialize our pipeline, either in partnership with other pharmaceutical or biotechnology companies or, as practical with our own resources. We are committed to maintaining a balanced portfolio of oncology compounds that can be co-developed with pharmaceutical and biotechnology partners, or commercialized for our own account. We are committed to pursuing value-creating technologies and products, making sound financial decisions, and building the financial capacity to develop our clinical portfolio.

EMPLOYEES

          As of December 31, 2007, we had 57 full-time employees. Forty-four employees work in our research and development department. Certain of our activities, such as manufacturing and clinical trial operations, are outsourced at the present time. We may hire additional personnel, in addition to utilizing part-time or temporary consultants, on an as-needed basis. None of our employees are represented by a labor union, and we believe our relations with our employees are satisfactory.

RELATIONSHIPS — CORPORATE AND NON-PROFIT

          Corporate Transactions.

	•		Celgene. In March 2005, we in-licensed Celgene’s tubulin inhibitor program. We have assumed the responsibility for the preclinical and clinical development of tubulin inhibitors for oncology applications under this program. Celgene is our largest shareholder.
	•		Children’s Medical Center Corporation (“CMCC”). As part of our three-way agreement with Alchemgen Therapeutics, Inc. executed in February 2004, CMCC holds the licenses for Endostatin and Angiostatin for all markets outside of Asia. In February 2008, the Company received notice that Alchemgen Therapeutics is ceasing operations as of April 30, 2008, therefore terminating the agreement with CMCC as of that date.

          Contract Manufacturing. The manufacturing efforts for the production of our clinical trial materials are performed by contract manufacturing organizations. Established relationships, coupled with supply agreements, have secured the necessary resources to ensure adequate supply of clinical materials to support our clinical development program. We believe that our current strategy of outsourcing manufacturing is cost-effective and allows for the flexibility we require.

          Sponsored Research Agreements. To complement our in-house research and development efforts, we have entered into sponsored research agreements with outside scientists to conduct specific projects as outlined below. Under these agreements, we have secured the rights to intellectual property and to develop under exclusive license any discoveries resulting from these collaborations. The funds we provide in accordance with these agreements partially support the scientists’ laboratory, research personnel and research supplies.

          Cooperative Research and Development Agreements (CRADAs).

	•		“2-Methoxyestradiol (2ME2) and 2ME2 Analogs as Inhibitors of Hypoxia Inducible Factor-1 alpha (HIF-1α)”, National Cancer Institute (Expires September 2008)
	•		“FGF-2 Vaccination Study in Experimental Demyelination”, Henry M. Jackson Foundation (Expires May 2009)

          Clinical Trial Centers. As of February 8, 2008, we are conducting clinical trials at the following institutions:

	•		Dana-Farber Cancer Institute, Boston, MA
	•		Duke University Medical Center, Durham, NC
	•		Indiana University Cancer Center, Indianapolis, IN
	•		Mayo Clinic, Rochester, MN
	•		Wisconsin Comprehensive Cancer Center, Madison, WI
	•		Johns Hopkins University, Baltimore, MD
	•		MD Anderson Cancer Center, Houston, TX
	•		University of Iowa, Iowa City, IA
	•		University of Maryland, Baltimore, MD
	•		University of Colorado Cancer Center, Aurora, CO
	•		St. Vincent Hospital and Health Care Centers, Inc., Indianapolis, IN
	•		University Health Network, Toronto, Ontario, Canada
	•		University of Wisconsin, Madison, WI

PATENTS, LICENSES AND PROPRIETARY RIGHTS

          Our success will depend in part on our ability to obtain patent protection for our products, both in the United States and abroad. The patent position of biotechnology and pharmaceutical companies, in general, is highly uncertain and involves complex legal and factual questions.

          Following the February 2004 transfer of the licenses for endostatin and angiostatin back to Children’s Medical Center Corporation (“CMCC”), Boston, EntreMed, Inc. and its subsidiary, Miikana Therapeutics, Inc., own, or have licensed on an exclusive basis, a total of 63 issued patents and patent applications in the United States for our product candidates. EntreMed, Inc. and its subsidiary, Miikana Therapeutics, Inc., have a total of 258 issued patents and pending patent applications in the United States and other countries.

          We have licensed technology exclusively from CMCC, which covers the use of steroid-derived small molecular weight compounds such as Panzem^Ò that are antimitotic and antiangiogenic agents. A U.S. patent application has been issued covering purified Panzem^Ò as a composition of matter. There are 5 pending United States patent applications and 17 allowed or issued United States patents covering Panzem^Ò technology. Patent applications also cover estrogen-related compounds with anti-fungal activity and the treatment of localized atherosclerosis. The terms of the licenses for Panzem^Ò extend until the last underlying patent expires.

          We have patent applications filed in both the U.S. and selected international jurisdictions that cover the steroid-derived small molecule designated ENMD-1198 that is currently in the clinic. In addition, we have patent applications and patents filed in both the U.S. and selected international jurisdictions that cover the small molecule designated MKC-1 that is currently in the clinic.

          We own the technology associated with our 2ME2 analogs, PAR-2 inhibitors, TFPI peptides, and NCEs for oncology and inflammation.

           Many patent applications corresponding to the above-described United States patent applications have been filed in Europe, Japan, Canada, Australia, and other selected countries.

           EntreMed, Inc. and its subsidiary, Miikana Therapeutics, Inc., have registered the trademarks ENTREMED, MIIKANA, PANZEM^® and THE ANGIOGENESIS COMPANY in the U.S. Patent and Trademark Office and have applied for registration of the marks in selected foreign countries.

GOVERNMENT REGULATION

          Our development, manufacture, and potential sale of therapeutics in the United States are subject to extensive regulations.

          In the United States, the Food and Drug Administration (FDA) regulates our product candidates currently being developed as drugs or biologics. New drugs are subject to regulation under the Federal Food, Drug, and Cosmetic Act (FFDCA), and biological products, in addition to being subject to certain provisions of that Act, are regulated under the Public Health Service Act (PHSA). We believe that the FDA is likely to regulate the products currently being developed by us or our collaborators as new drugs. Both the FFDCA and PHSA and corresponding regulations govern, among other things, the testing, manufacturing, safety, efficacy, labeling, storage, recordkeeping, advertising and other promotion of biologics or new drugs, as the case may be. FDA clearances or approvals must be obtained before clinical testing, and before manufacturing and marketing of biologics or drugs.

          Preparing drug candidates for regulatory approval has historically been a costly and time-consuming process. Generally, in order to gain FDA permission to test a new agent, a developer first must conduct preclinical studies in the laboratory and in animal model systems to gain preliminary information on an agent’s effectiveness and to identify any safety problems. The results of these studies are submitted as a part of an Investigational New Drug (IND) application for a drug or biologic, which the FDA must review before human clinical trials of an investigational drug can begin. In addition to the known safety and effectiveness data on the drug or biologic, the IND must include a detailed description of the clinical investigations proposed to be undertaken. Based on the current FDA organizational structure, Panzem^Ò, 2ME2 analogs, and other compounds in our small molecule programs are regulated as new drugs by the FDA’s Center for Drug Evaluation and Research (CDER). Generally, as new chemical entities like our small molecules are discovered, formal IND-directed toxicology studies are required prior to initiating human testing. Clinical testing may begin 30 days after submission of an IND to the FDA unless FDA objects to the initiation of the study or has outstanding questions to discuss with the IND sponsor.

          In order to commercialize any drug or biological products, we or our collaborators must sponsor and file an IND and conduct clinical studies to demonstrate the safety and effectiveness necessary to obtain FDA approval of such products. For studies conducted under INDs sponsored by us or our collaborators, we or our collaborators will be required to select qualified investigators (usually physicians within medical institutions) to supervise the administration of the products, test or otherwise assess patient results, and collect and maintain patient data; monitor the investigations to ensure that they are conducted in accordance with applicable requirements, including the requirements set forth in the general investigational plan and protocols contained in the IND; and comply with applicable reporting and recordkeeping requirements.

          Clinical trials of drugs or biologics are normally done in three phases, although the phases may overlap. Phase 1 trials for agents to be used to treat cancer patients are concerned primarily with the safety and preliminary effectiveness of the drug, involve a small group ranging from 15 - 40 subjects, and may take from six months to over one year to complete. Phase 2 trials normally involve 30 — 200 patients and are designed primarily to demonstrate effectiveness in treating or diagnosing the disease or condition for which the drug is intended, although short-term side effects and risks in people whose health is impaired may also be examined. Phase 3 trials are expanded clinical trials with larger numbers of patients which are intended to evaluate the overall benefit-risk relationship of the drug and to gather additional information for proper dosage and labeling of the drug. Phase 3 clinical trials generally take two to five years to complete, but may take longer. The FDA receives reports on the progress of each phase of clinical testing, as well as reports of unexpected adverse experiences occurring during the trial. FDA may require the modification, suspension, or termination of clinical trials, if it concludes that an unwarranted risk is presented to patients, or, in Phase 2 and 3, if it concludes that the study protocols are deficient in design to meet their stated objectives.

          If clinical trials of a new product are completed successfully, the sponsor of the product may seek FDA marketing approval. If the product is classified as a new drug, an applicant must file a New Drug Application (NDA) with the FDA and receive approval before commercial marketing of the drug. The NDA must include detailed information about the product and its manufacture and the results of product development, preclinical studies and clinical trials.

          The testing and approval processes require substantial time and effort and there can be no assurance that any approval will be obtained on a timely basis, if at all. Although it is the policy of the FDA to complete the review of the initial submission of NDAs within six to twelve months, the entire FDA review process may take several years. Notwithstanding the submission of relevant data, the FDA may ultimately decide that the NDA does not satisfy its regulatory criteria and deny the approval. Further, the FDA may require additional clinical studies before making a decision on approval. In addition, the FDA may condition marketing approval on the conduct of specific post-marketing studies to further evaluate safety and effectiveness. Even if FDA regulatory clearances are obtained, a marketed product is subject to continuing regulatory requirements and review relating to Good Manufacturing Practices, adverse event reporting, promotion and advertising, and other matters. Discovery of previously unknown problems or failure to comply with the applicable regulatory requirements may result in restrictions on the marketing of a product or withdrawal of the product from the market, as well as possible civil or criminal sanctions.

COMPETITION

          Competition in the pharmaceutical, biotechnology and biopharmaceutical industries is intense and based significantly on scientific and technological factors, the availability of patent and other protection for technology and products, the ability and length of time required to obtain governmental approval for testing, manufacturing and marketing and the ability to commercialize products in a timely fashion. Moreover, the biopharmaceutical industry is characterized by rapidly evolving technology that could result in the technological obsolescence of any products that we develop.

          We compete with many specialized biopharmaceutical firms, as well as a growing number of large pharmaceutical companies that are applying biotechnology to their operations. Many biopharmaceutical companies have focused their development efforts in the human therapeutics area, including oncology and inflammation, and many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, governmental agencies and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and consultants.

          Our competition will be determined in part by the potential indications for which our product candidates may be developed and ultimately approved by regulatory authorities. We may rely on third parties to commercialize our products, and accordingly, the success of these products will depend in significant part on these third parties’ efforts and ability to compete in these markets. The success of any collaboration will depend in part upon our collaborative partners’ own competitive, marketing and strategic considerations, including the relative advantages of alternative products being developed and marketed by our collaborative partners and our competitors.

          Many of our existing or potential competitors have substantially greater financial, technical and human resources than we do and may be better equipped to develop, manufacture and market products. In addition, many of these competitors have extensive experience in preclinical testing and human clinical trials and in obtaining regulatory approvals. The existence of competitive products, including products or treatments of which we are not aware, or products or treatments that may be developed in the future, may adversely affect the marketability of products that we may develop.

Available Information

          Through our website at www.entremed.com, we make available, free of charge, our filings with the Securities and Exchange Commission (“SEC”), including our annual proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and all amendments thereto, as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission. Our filings are also available through the Securities and Exchange Commission via their website, http://www.sec.gov. You may also read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The information contained on our website is not incorporated by reference in this annual report on Form 10-K and should not be considered a part of this report.

ITEM 1A. RISK FACTORS.

We Have a History of Losses and Anticipate Future Losses

          To date, we have been engaged primarily in research and development activities. Although we have received license fees and research and development funding from a former collaborator, limited revenues on royalties from sales of Thalomid^® and certain research grants, we have not derived significant revenues from operations.

          At December 31, 2007, we had an accumulated deficit of approximately $334,048,000. Losses have continued since December 31, 2007. We will also be required to conduct substantial research and development and clinical testing activities for our proposed products. We expect that these activities will result in operating losses for the foreseeable future before we commercialize any products, if ever. In addition, to the extent we rely on others to develop and commercialize our products, our ability to achieve profitability will depend upon the success of these other parties. To support our research and development of certain product candidates, we also may rely on cooperative agreements from governmental and other organizations as a source of support. If our cooperative agreements were to be reduced to any substantial extent, it may impair our ability to continue our research and development efforts. Even if we do achieve profitability, we may be unable to sustain or increase it.

The Market Price of Our Common Stock May Be Highly Volatile or May Decline Regardless of Our Operating Performance

          Our stock price has fluctuated from year-to-year and quarter-to-quarter and will likely continue to be volatile. The valuations of many biotechnology companies without consistent product revenues and earnings are extraordinarily high based on conventional valuation standards, such as price to earnings and price to sales ratios. These trading prices and valuations may not be sustained. In the future, our operating results in a particular period may not meet the expectations of any securities analysts whose attention we may attract, or those of our investors, which may result in a decline in the market price of our common stock. Any negative change in the public’s perception of the prospects of biotechnology companies could depress our stock price regardless of our results of operations. These factors may materially and adversely affect the market price of our common stock.

Our Existing Term Loan Contains Operating and Financial Covenants That May Restrict our Business and Financing Activities

          We entered into a $20 million loan agreement with General Electric Capital Corporation, as agent for the lenders party thereto, on September 12, 2007. The loan agreement is secured by a pledge of all of our assets other than intellectual property, including the shares of the outstanding capital stock, or other equity interests, of each of our subsidiaries, and contains a variety of operational covenants, including limitations on our ability to incur liens or additional debt, make dispositions, pay dividends, redeem our stock, make certain investments and engage in certain merger, consolidation or asset sale transactions and transactions with affiliates, among other restrictions. Any future debt financing we enter into may involve similar or more onerous covenants that restrict our operations. Our borrowings under the loan agreement or any future debt financing we do will need to be repaid, which creates additional financial risk for our company, particularly if our business, or prevailing financial market conditions, are not conducive to paying-off or refinancing our outstanding debt obligations. Furthermore, our failure to comply with the covenants in the loan agreement could result in an event of default that, if not cured or waived, could result in the acceleration of all or a substantial portion of our debt, which could have a material adverse effect on our cash position, business, prospects, financial condition and results of operations.

Development of Our Products is at an Early Stage and is Uncertain

          Our proposed products and research programs are in the early stage of clinical development and require significant, time-consuming and costly research and development, testing and regulatory clearances. In developing our products, we are subject to risks of failure that are inherent in the development of products and therapeutic procedures. For example, it is possible that any or all of our proposed products will be ineffective or toxic, or otherwise will fail to receive necessary FDA clearances. There is a risk that the proposed products will be uneconomical to manufacture or market or will not achieve market acceptance. There is also a risk that third parties may hold proprietary rights that preclude us from marketing our proposed products or that others will market a superior or equivalent product. Further, our research and development activities might never result in commercially viable products.

          Our product candidates are at the clinical and preclinical stages of development. Although several of our product candidates have demonstrated some promising results in early clinical (human) trials and preclinical (animal) studies, they may not prove to be effective in humans. For example, testing on animals may occur under different conditions than testing in humans and therefore the results of animal studies may not accurately predict human experience. Likewise, early clinical studies may not be predictive of eventual safety or effectiveness results in larger-scale pivotal clinical trials.

          There are many regulatory steps that must be taken before any of these product candidates will be eligible for FDA approval and subsequent sale, including the completion of preclinical and clinical trials. We do not expect that these product candidates will be commercially available for several years, if ever.

Even If Panzem^® is Approved, the Commercial Success of Our Oncology Business is Uncertain and We May Not Be Able to Recover the Value of Our Investment

          Even if Panzem^® is approved by the FDA, the market for oncology treatments is competitive and complex. The commercial success of the product will be limited if we cannot successfully manufacture, distribute and sell it in jurisdictions in which it is approved. There can be no assurance that demand for our drugs will support a volume and price that will achieve a profit in accordance with our expectations, or that our revenues for these products will exceed our cost of goods.

Technological Developments By Competitors May Render Our Products Obsolete

          If competitors were to develop superior technologies, our technologies could be rendered noncompetitive or obsolete, resulting in a material adverse effect to our business. Developments in the biotechnology and pharmaceutical industries are expected to continue at a rapid pace. Success depends upon achieving and maintaining a competitive position in the development of products and technologies. Competition from other biotechnology and pharmaceutical companies can be intense. Many competitors have substantially greater research and development capabilities, marketing, financial and managerial resources and experience in the industry. Even if a competitor creates a technology that is not superior, we may not be able to compete with such technology.

Our Common Stock May be Delisted From The NASDAQ Global Market, Which Could Negatively Impact the Price of Our Common Stock and Our Ability to Access the Capital Markets

          Our common stock is listed on The NASDAQ Global Market. The listing standards of The NASDAQ Global Market provide, among other things, that a company may be delisted if the bid price of its stock drops below $1.00 for a period of 30 consecutive business days. Recently our stock has traded below $1.00, and if we fail to comply with the listing standards applicable to issuers listed on The NASDAQ Global Market, our common stock may be delisted from The NASDAQ Global Market. The delisting of our common stock would significantly affect the ability of investors to trade our securities and would significantly negatively affect the value and liquidity of our common stock. In addition, the delisting of our common stock could materially adversely affect our ability to raise capital on terms acceptable to us or at all. Delisting from The NASDAQ Global Market could also have other negative results, including the potential loss of confidence by suppliers and employees, the loss of institutional investor interest and fewer business development opportunities.

We are Uncertain Whether Additional Funding Will Be Available For Our Future Capital Needs and Commitments, and If We Cannot Raise Additional Funding, or Access the Credit Markets, We May Be Unable to Complete Development of Our Product Candidates

          We will require substantial funds in addition to our existing working capital to develop our product candidates and otherwise to meet our business objectives. We have never generated sufficient revenue during any period since our inception to cover our expenses and have spent, and expect to continue to spend, substantial funds to continue our research and development and clinical programs. Any one of the following factors, among others, could cause us to require additional funds or otherwise cause our cash requirements in the future to increase materially:

	•		results of research and development activities;
	•		progress of our preclinical studies or clinical trials;
	•		results of clinical trials;

	•		changes in or terminations of our relationships with strategic partners;
	•		changes in the focus, direction, or costs of our research and development programs;
	•		competitive and technological advances;
	•		establishment of marketing and sales capabilities;
	•		manufacturing;
	•		the regulatory approval process; or
	•		product launch.

          At December 31, 2007, we had cash and cash equivalents and marketable securities of $47,748,191. We currently have no commitments or arrangements for any financing. We may continue to seek additional capital through public or private financing or collaborative agreements. Our operations require significant amounts of cash. We may be required to seek additional capital, whether from sales of equity or debt or additional borrowings, for the future growth and development of our business. We can give no assurance as to the availability of such additional capital or, if available, whether it would be on terms acceptable to us. The current credit environment has negatively affected the economy, and we have considered how it might affect our business. Events affecting credit market liquidity could increase borrowing costs or limit availability of funds. Moreover, the covenants of our term loan agreement contain provisions that may restrict the debt we may incur in the future. If we are not successful in obtaining sufficient capital because we are unable to access the capital markets at financially economical interest rates, it could reduce our research and development efforts and may materially adversely affect our future growth , results of operations and financial results, and we may be required to curtail significantly, or eliminate at least temporarily, one or more of our drug development programs.

We Must Show the Safety and Efficacy of Our Product Candidates Through Clinical Trials, the Results of Which are Uncertain

          Before obtaining regulatory approvals for the commercial sale of our products, we must demonstrate, through preclinical studies (animal testing) and clinical trials (human testing), that our proposed products are safe and effective for use in each target indication. Testing of our product candidates will be required, and failure can occur at any stage of testing. Clinical trials may not demonstrate sufficient safety and efficacy to obtain the required regulatory approvals or result in marketable products. The failure to adequately demonstrate the safety and efficacy of a product under development could delay or prevent regulatory approval of the potential product.

          Clinical trials for the product candidates we are developing may be delayed by many factors, including that potential patients for testing are limited in number. The failure of any clinical trials to meet applicable regulatory standards could cause such trials to be delayed or terminated, which could further delay the commercialization of any of our product candidates. Newly emerging safety risks observed in animal or human studies also can result in delays of ongoing or proposed clinical trials. Any such delays will increase our product development costs. If such delays are significant, they could negatively affect our financial results and the commercial prospects for our products.

The Independent Clinical Investigators and Contract Research Organizations That We Rely Upon to Assist in the Conduct of Our Clinical Trials May Not Be Diligent, Careful or Timely, and May Make Mistakes, in the Conduct of Our Trials

          We depend on independent clinical investigators and contract research organizations, or CROs, to assist in the conduct of our clinical trials under their agreements with us. The investigators are not our employees, and we cannot control the amount or timing of resources that they devote to our programs. If independent investigators fail to devote sufficient time and resources to our drug development programs, or if their performance is substandard, it will delay the approval of our FDA applications and our introduction of new drugs. The CROs we contract with to assist with the execution of our clinical trials play a significant role in the conduct of the trials and the subsequent collection and analysis of data. Failure of the CROs to meet their obligations could adversely affect clinical development of our products.

The Success of Our Business Depends Upon the Members of Our Senior Management Team, Our Scientific Staff and Our Ability to Continue to Attract and Retain Qualified Scientific, Technical and Business Personnel

          We are dependent on the principal members of our management team and scientific staff for our business success. The loss of any of these people could impede the achievement of our development and business objectives. We do not carry key man life insurance on the lives of any of our key personnel. There is intense competition for human resources, including management, in the scientific fields in which we operate and there can be no assurance that we will be able to attract and retain qualified personnel necessary for the successful development of our product candidates, and any expansion into areas and activities requiring additional expertise. In addition, there can be no assurance that such personnel or resources will be available when needed. In addition, we rely on a significant number of consultants to assist us in formulating our research and development strategy and other business activities. All of our consultants may have commitments to, or advisory or consulting agreements with, other entities that may limit their availability to us.

We May Need New Collaborative Partners to Further Develop and Commercialize Products, and if We Enter Into Such Arrangements, We May Give Up Control Over the Development and Approval Process and Decrease our Potential Revenue

          We plan to develop and commercialize our product candidates both with and without corporate alliances and partners. Nonetheless, we intend to explore opportunities for new corporate alliances and partners to help us develop, commercialize and market our product candidates. We expect to grant to our partners certain rights to commercialize any products developed under these agreements, and we may rely on our partners to conduct research and development efforts and clinical trials on, obtain regulatory approvals for, and manufacture and market any products licensed to them. Each individual partner will seek to control the amount and timing of resources devoted to these activities generally. We anticipate obtaining revenues from our strategic partners under such relationships in the form of research and development payments and payments upon achievement of certain milestones. Since we generally expect to obtain a royalty for sales or a percentage of profits of products licensed to third parties, our revenues may be less than if we retained all commercialization rights and marketed products directly. In addition, there is a risk that our corporate partners will pursue alternative technologies or develop competitive products as a means for developing treatments for the diseases targeted by our programs.

          We may not be successful in establishing any collaborative arrangements. Even if we do establish such collaborations, we may not successfully commercialize any products under or derive any revenues from these arrangements. Our strategy also involves entering into multiple, concurrent strategic alliances to pursue commercialization of our core technologies. There is a risk that we will be unable to manage simultaneous programs successfully. With respect to existing and potential future strategic alliances and collaborative arrangements, we will depend on the expertise and dedication of sufficient resources by these outside parties to develop, manufacture, or market products. If a strategic alliance or collaborative partner fails to develop or commercialize a product to which it has rights, we may not recognize any revenues on that particular product.

We Have No Current Manufacturing or Marketing Capacity and Rely on Only One Supplier For Some of Our Products

          We do not expect to manufacture or market products in the near term, but we may try to do so in certain cases. We do not currently have the capacity to manufacture or market products and we have limited experience in these activities. If we elect to perform these functions, we will be required to either develop these capacities, or contract with others to perform some or all of these tasks. We may be dependent to a significant extent on corporate partners, licensees, or other entities for manufacturing and marketing of products. If we engage directly in manufacturing or marketing, we will require substantial additional funds and personnel and will be required to comply with extensive regulations. We may be unable to develop or contract for these capacities when required to do so in connection with our business.

          We are currently manufacturing products for clinical trials on a contract basis. Panzem^® NCD, our lead small molecule clinical drug candidate, is currently manufactured by Elan. We do not have arrangements in place with alternative suppliers if our current supplier Elan was unable to deliver the product in necessary quantities.

          We depend on our third-party manufacturers to perform their obligations effectively and on a timely basis. These third parties may not meet their obligations and any such non-performance may delay clinical development or submission of products for regulatory approval, or otherwise impair our competitive position. Any significant problem experienced by one of our suppliers could result in a delay or interruption in the supply of materials to us until such supplier resolves the problem or an alternative source of supply is located. Any delay or interruption would likely lead to a delay or interruption of manufacturing operations, which could negatively affect our operations. Although we have identified alternative suppliers for our product candidates, we have not entered into contractual or other arrangements with them. If we needed to use an alternate supplier for any product, we would experience delays while we negotiated an agreement with them for the manufacture of such product. In addition, we may be unable to negotiate manufacturing terms with a new supplier that are as favorable as the terms we have with our current suppliers.

          Problems with any manufacturing processes could result in product defects, which could require us to delay shipment of products or recall products previously shipped. In addition, any prolonged interruption in the operations of the manufacturing facilities of one of our sole-source suppliers could result in the cancellation of shipments. A number of factors could cause interruptions, including equipment malfunctions or failures, or damage to a facility due to natural disasters or otherwise. Because our manufacturing processes are or are expected to be highly complex and subject to a lengthy FDA approval process, alternative qualified production capacity may not be available on a timely basis or at all. Difficulties or delays in our manufacturing could increase our costs and damage our reputation.

          The manufacture of pharmaceutical products can be an expensive, time consuming, and complex process. Manufacturers often encounter difficulties in scaling-up production of new products, including quality control and assurance and shortages of personnel. Delays in formulation and scale-up to commercial quantities could result in additional expense and delays in our clinical trials, regulatory submissions, and commercialization.

Failure of Manufacturing Facilities Producing Our Product Candidates to Maintain Regulatory Approval Could Delay or Otherwise Hinder Our Ability to Market Our Product Candidates

          Any manufacturer of our product candidates will be subject to applicable Good Manufacturing Practices (GMP) prescribed by the FDA or other rules and regulations prescribed by foreign regulatory authorities. We and any of our collaborators may be unable to enter into or maintain relationships either domestically or abroad with manufacturers whose facilities and procedures comply or will continue to comply with GMP and who are able to produce our small molecules in accordance with applicable regulatory standards. Failure by a manufacturer of our products to comply with GMP could result in significant time delays or our inability to obtain marketing approval or, should we have market approval, for such approval to continue. Changes in our manufacturers could require new product testing and facility compliance inspections. In the United States, failure to comply with GMP or other applicable legal requirements can lead to federal seizure of violated products, injunctive actions brought by the federal government, inability to export product, and potential criminal and civil liability on the part of a company and its officers and employees.

Manufacturing Our Product Candidates May Not Be Commercially Feasible

          The manufacturing processes for all of the small molecules we are developing have not yet been tested at commercial levels, and it may not be possible to manufacture these materials in a cost-effective manner.

We Depend on Patents and Other Proprietary Rights, Some of Which are Uncertain

          Our success will depend in part on our ability to obtain patents for our products, both in the United States and abroad. The patent position of biotechnology and pharmaceutical companies in general is highly uncertain and involves complex legal and factual questions. Risks that relate to patenting our products include the following:

	•		our failure to obtain additional patents;
	•		challenge, invalidation, or circumvention of patents already issued to us;
	•		failure of the rights granted under our patents to provide sufficient protection;
	•		independent development of similar products by third parties; or
	•		ability of third parties to design around patents issued to our collaborators or us.

          Our potential products may conflict with composition, method, and use of patents that have been or may be granted to competitors, universities or others. As the biotechnology industry expands and more patents are issued, the risk increases that our potential products may give rise to claims that may infringe the patents of others. Such other persons could bring legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected products. Any such litigation could result in substantial cost to us and diversion of effort by our management and technical personnel. If any of these actions are successful, in addition to any potential liability for damages, we could be required to obtain a license in order to continue to manufacture or market the affected products. We may not prevail in any action and any license required under any needed patent might not be made available on acceptable terms, if at all.

          We are a party to sponsored research agreements and license agreements that require us to make milestone payments upon attainment of certain regulatory milestones. Failure to meet such milestones could result in the loss of certain rights to compounds covered under such license agreements.

          We also rely on trade secret protection for our confidential and proprietary information. However, trade secrets are difficult to protect and others may independently develop substantially equivalent proprietary information and techniques and gain access to our trade secrets and disclose our technology. We may be unable to meaningfully protect our rights to unpatented trade secrets. We require our employees to complete confidentiality training that specifically addresses trade secrets. All employees, consultants, and advisors are required to execute a confidentiality agreement when beginning an employment or a consulting relationship with us. The agreements generally provide that all trade secrets and inventions conceived by the individual and all confidential information developed or made known to the individual during the term of the relationship automatically become our exclusive property. Employees and consultants must keep such information confidential and may not disclose such information to third parties except in specified circumstances. However, these agreements may not provide meaningful protection for our proprietary information in the event of unauthorized use or disclosure of such information.

          To the extent that consultants, key employees, or other third parties apply technological information independently developed by them or by others to our proposed projects, disputes may arise as to the proprietary rights to such information. Any such disputes may not be resolved in our favor. Certain of our consultants are employed by or have consulting agreements with other companies and any inventions discovered by them generally will not become our property.

Our Potential Products Are Subject to Government Regulatory Requirements and an Extensive Approval Process

          Our research, development, preclinical and clinical trials, manufacturing, and marketing of most of our product candidates are subject to an extensive regulatory approval process by the FDA and other regulatory agencies in the United States and abroad. The process of obtaining FDA and other required regulatory approvals for drug and biologic products, including required preclinical and clinical testing, is time consuming and expensive. Even after spending time and money, we may not receive regulatory approvals for clinical testing or for the manufacturing or marketing of any products. Our collaborators or we may encounter significant delays or costs in the effort to secure necessary approvals or licenses. Even if we obtain regulatory clearance for a product, that product will be subject to continuing review. Later discovery of previously unknown defects or failure to comply with the applicable regulatory requirements may result in restrictions on a product’s marketing or withdrawal of the product from the market, as well as possible civil or criminal penalties.

Potential Products May Subject Us to Product Liability for Which Insurance May Not Be Available

          The use of our potential products in clinical trials and the marketing of any pharmaceutical products may expose us to product liability claims. We have obtained a level of liability insurance coverage that we believe is adequate in scope and coverage for our current stage of development. However, our present insurance coverage may not be adequate to protect us from liabilities we might incur. In addition, our existing coverage will not be adequate as we further develop products and, in the future, adequate insurance coverage and indemnification by collaborative partners may not be available in sufficient amounts or at a reasonable cost. If a product liability claim or series of claims are brought against us for uninsured liabilities, or in excess of our insurance coverage, the payment of such liabilities could have a negative effect on our business and financial condition.

We Have Engaged In and May Continue to Engage in Acquisitions, Which Could Negatively Affect Our Business and Earnings

          In January 2006, we acquired Miikana Therapeutics, Inc., a clinical-stage biopharmaceutical company. We intend to continue to be opportunistic in acquiring companies that we believe are a strategic fit with our business or complement our existing product candidates. There are risks associated with such activities. These risks include, among others, incorrectly assessing the asset quality of a prospective merger partner, encountering greater than anticipated costs in integrating acquired businesses, being unable to profitably deploy assets acquired in the transaction, such as drug candidates, possible dilution to our shareholders, and the loss of key employees due to changes in management. Further, acquisitions may place additional constraints on our resources by diverting the attention of our management from our business operations. To the extent we issue securities in connection with additional transactions, these transactions and related issuances may have a dilutive effect on earnings per share and our ownership. Our earnings, financial condition, and prospects after an acquisition depend in part on our ability to successfully integrate the operations of the acquired business or technologies. We may be unable to integrate operations successfully or to achieve expected cost savings. Any cost savings which are realized may be offset by losses in revenues or other charges to earnings.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

          None.

ITEM 2. PROPERTIES.

          We currently lease approximately 46,000 square feet of space (approximately 32,000 square feet of which is laboratory space) in Rockville, Maryland. The lease expires in February 2009. Our current lease contains a five-year renewal option at the same terms, which is available to us with six month’s notice. We believe that our existing facilities will be adequate to accommodate the implementation of our current business plan.

ITEM 3. LEGAL PROCEEDINGS.

          EntreMed is subject in the normal course of business to various legal proceedings in which claims for monetary or other damages may be asserted. Management does not believe such legal proceedings, except as otherwise disclosed herein, are material.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Common Equity

          Our common stock began trading publicly on the Nasdaq Global Market under the symbol “ENMD” on June 12, 1996. The following table sets forth the high and low closing price for our common stock by quarter, as reported by the Nasdaq Global Market, for the periods indicated:

		HIGH				LOW
2006:
First Quarter		$	2.87			$	1.99
Second Quarter			2.54				1.51
Third Quarter			1.93				1.45
Fourth Quarter			2.20				1.52
2007:
First Quarter		$	1.70			$	1.43
Second Quarter			1.91				1.53
Third Quarter			1.56				1.07
Fourth Quarter			1.60				1.08
2008:
First Quarter (through February 26, 2008)		$	1.25			$	.85

          On February 26, 2008, the closing price of our common stock, as reported by the Nasdaq Global Market, was $.92 per share. As of February 26, 2008 there were approximately 916 holders of record of our common stock.

Dividend Policy

          Since our initial public offering in 1996, we have not paid cash dividends on our common stock. We currently anticipate that any earnings will be retained for the continued development of our business and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

Options under Employee Benefit Plans

          The following table discloses certain information about the options issued and available for issuance under all outstanding Company option plans, as of December 31, 2007.

(a)

(b)

(c)

Number of securities

remaining available for

future issuance under

Number of securities to

Weighted-average

equity compensation

be issued upon exercise

exercise price of

plans [excluding

of outstanding options,

outstanding options,

securities reflected in

Plan category

warrants and rights

warrants and rights

column (a)]

Equity compensation plans approved by security holders

8,671,308

$

6.81

455,162

Equity compensation plans not approved by security holders

131,113

$

3.71

0

Total

8,802,421

$

6.79

455,162

          Warrants issued under the unauthorized plans represent compensation for consulting services rendered by the holders.

STOCK PRICE PERFORMANCE PRESENTATION

The following chart compares the cumulative total stockholder return on the Company’s Shares with the cumulative total stockholder return of the NASDAQ Stock Market — U. S. Index, and the NASDAQ Pharmaceuticals Index.

		12/31/02				12/31/03				12/31/04				12/31/05				12/31/06				12/31/07
ENTREMED, INC.			100.000				386.047				376.744				225.581				183.721				139.535
NASDAQ STOCK MARKET — US			100.000				149.521				162.719				166.178				182.574				197.978
NASDAQ PHARMACEUTICALS			100.000				146.588				156.132				171.930				168.293				176.974

ITEM 6. SELECTED FINANCIAL DATA.

          The following selected consolidated financial data set forth below has been derived from our audited consolidated financial statements. The data should be read in conjunction with the consolidated financial statements and related notes, Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 and other financial information included elsewhere in this annual report on Form 10-K.

						Year Ended December 31,
		2007				2006				2005				2004				2003
STATEMENTS OF OPERATIONS DATA:
Revenues
Collaborative research and development		$	—			$	—			$	—			$	—			$	667,796
License fees			—				—				590,992				495,496				310,496
Grant revenues			—				—				—				—				508,243
Royalty revenues			7,393,463				6,881,799				5,310,439				5,918				2,705
Other			2,188				12,559				16,624				12,581				86,306
Total revenues			7,395,651				6,894,358				5,918,055				513,995				1,575,546
Expenses:
Research and development			23,739,392				21,671,117				17,325,048				10,523,252				14,252,196
General and administrative			7,386,570				7,393,722				5,920,455				6,570,664				7,022,986
Acquired In-Process R&D			—				29,481,894				—				—				—
Interest expense			793,393				156,787				—				—				—
Investment income			(2,112,583	)			(1,867,204	)			(1,010,771	)			(313,940	)			(205,580	)
Gain on sale of asset			—				(52,901	)			(3,420	)			(124,083	)			—
Gain on sale of securities			—				—				—				(520,000	)			—
Gain on sale of royalty interest			—				—				—				(3,000,000	)			—
Net loss		$	(22,411,121	)		$	(49,889,057	)		$	(16,313,257	)		$	(12,621,898	)		$	(19,494,056	)
Dividends on Series A convertible preferred stock			(1,005,000	)			(1,005,000	)			(1,005,000	)			(1,005,000	)			(1,005,000	)
Net loss attributable to common shareholders		$	(23,416,121	)		$	(50,894,057	)		$	(17,318,257	)		$	(13,626,898	)		$	(20,499,056	)
Net loss per share		$	(0.28	)		$	(0.71	)		$	(0.36	)		$	(0.37	)		$	(0.68	)
Weighted average number of shares outstanding			84,166,552				71,873,734				48,176,914				37,170,544				29,943,161

						As of December 31,
		2007				2006				2005				2004				2003
BALANCE SHEET DATA:
Cash and cash equivalents and short-term investments		$	47,748,191			$	50,570,097			$	30,082,388			$	34,539,516			$	36,941,430
Working capital			42,929,602				46,268,554				28,510,176				34,979,936				33,405,818
Total assets			53,014,908				55,719,534				36,431,885				39,404,002				40,153,764
Deferred revenue, less Current portion			—				—				—				95,496				192,993
Accumulated deficit			(334,048,007	)			(311,636,886	)			(261,747,829	)			(245,434,572	)			(232,812,674	)
Total stockholders’ equity			26,896,978				46,963,219				29,369,190				35,704,754				34,858,883

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

          The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto appearing elsewhere in this report. See “Risk Factors” in Item 1A of this Annual Report.

OVERVIEW

          We are a clinical-stage pharmaceutical company developing novel multi-mechanism drugs for the treatment of cancer and inflammatory diseases. We are focused on developing drugs that are safe and convenient, and provide the potential for improved patient outcomes. MKC-1, a novel cell cycle inhibitor, is in Phase 2 clinical trials for cancer. Panzem^® (2-methoxyestradiol or 2ME2) is also currently in multiple Phase 2 clinical trials for cancer, and ENMD-1198, a novel antimitotic agent discovered by EntreMed, is currently in a Phase 1 clinical trial for cancer. In late 2007, we also filed and had accepted, an IND for ENMD-2076, a novel, Aurora A/angiogenesis kinase inhibitor in oncology and we expect to begin clinical trials in early 2008. Additionally, the FDA has accepted our IND filing for Panzem^®. Our development plans are to initiate clinical trials in healthy volunteers to support this indication. With multiple product candidates in clinical development, we expect research and development expenses to remain at similar levels or increase through 2008 as we support the existing clinical programs and also bring one or more additional development candidates forward. Our goal is to develop and commercialize drugs based on our scientific expertise in angiogenesis, cell cycle regulation and inflammation — processes vital to the progression of cancer and other diseases. We currently have four product candidates in clinical development that are based on these mechanisms. In order to further advance our commercial objectives, we may seek strategic alliances, licensing relationships and co-development partnerships with other companies to develop compounds for both oncology and non-oncology therapeutic areas.

CRITICAL ACCOUNTING POLICIES AND THE USE OF ESTIMATES

          The preparation of our financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Our critical accounting policies, including the items in our financial statements requiring significant estimates and judgments, are as follows:

•

Revenue Recognition — We recognize revenue in accordance with the provisions of Staff Accounting Bulletin No. 104, Revenue Recognition, whereby revenue is not recognized until it is realized or realizable and earned. Revenue is recognized when all of the following criteria are met: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed and determinable and collectibility is reasonably assured.

•

Royalty Revenue — Royalties from licenses are based on third-party sales and recorded as earned in accordance with contract terms, when third-party results are reliably measured and collectibility is reasonably assured. The majority of our 2007 revenues were from royalties on the sale of Thalomid®, which we began to recognize in the third quarter. In 2004 certain provisions of a purchase agreement dated June 14, 2001 by and between Bioventure Investments kft (“Bioventure”) and the Company were satisfied and, as a result, beginning in 2005 we became entitled to share in the royalty payments received by Royalty Pharma Finance Trust, successor to Bioventure, on annual Thalomid® sales above a certain threshold. Based on the licensing agreement royalty formula, annual royalty sharing commences with Thalomid® annual sales of approximately $225 million. The Company also is eligible to receive royalty payments under a February 2004 agreement with Children’s Medical Center Corporation (“CMCC”) and Alchemgen Therapeutics. Under the agreement, Alchemgen received rights to market endostatin and angiostatin in Asia. We are also eligible to receive royalties from Oxford Biomedica, PLC from the net sales of products developed for the treatment of ophthalmic (eye) diseases. We did not receive royalties under either of these agreements in 2007. In the future, royalty payments, if any, will be recorded as revenue when received and/or when collectibility is reasonably assured.

	•		Research and Development — Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with preclinical testing and clinical trials of our product candidates, including the costs of manufacturing the product candidates, and facilities expenses. Research and development costs are expensed as incurred.
	•		Expenses for Clinical Trials — Expenses for clinical trials are incurred from planning through patient enrollment to reporting of the underlying data. We estimate expenses incurred for clinical trials that are in process based on patient enrollment and based on clinical data collection and management. Costs that are associated with patient enrollment are recognized as each patient in the clinical trial completes enrollment. Estimated clinical trial costs related to enrollment can vary based on numerous factors, including expected number of patients in trials, the number of patients that do not complete participation in a trial, and when a patient drops out of a trial. Information about patient enrollment can become available significantly after we report our expenses for clinical trials, in which case we would change our estimate of the remaining cost of a trial. Costs that are based on clinical data collection and management are recognized based on estimates of unbilled goods and services received in the reporting period. In the event of early termination of a clinical trial, we would accrue an amount based on estimates of the remaining non-cancelable obligations associated with winding down the clinical trial.
	•		Stock-Based Compensation — Issued in December 2004, Statement of Financial Accounting Standards No. 123R (“SFAS 123R”) requires companies to recognize expense associated with share-based compensation arrangements, including employee stock options and stock purchase plans, using a fair value-based option pricing model, and eliminates the alternative to use the intrinsic value method of accounting for share-based payments. SFAS 123R was effective beginning January 1, 2006. Adoption of the expense provisions of SFAS 123R has a material impact on our results of operations. We have applied the modified prospective transition method; accordingly, compensation expense is reflected in the financial statements beginning January 1, 2006 with no restatement of prior periods. Compensation expense is recognized for awards that are granted, modified, repurchased or cancelled on or after January 1, 2006, as well as for the portion of awards previously granted that have not vested as of January 1, 2006. For the adoption of SFAS 123R, we have selected the straight-line expense attribution method, whereas our previous expense attribution method was the graded-vesting method, an accelerated method, described by FIN 28. Our results of operations are impacted by the recognition of non-cash expense related to the fair value of our share-based compensation awards. Share-based compensation expense recognized in the years ended December 31, 2007 and 2006 totaled $1,455,000 and $1,656,000, respectively.

          The determination of fair value of stock-based payment awards on the date of grant using the Black-Scholes model is affected by our stock price, as well as the input of other subjective assumptions. These assumptions include, but are not limited to, the expected term of stock options and our expected stock price volatility over the term of the awards. Changes in the assumptions can materially affect the fair value estimates.

          Any future changes to our share-based compensation strategy or programs would likely affect the amount of compensation expense recognized under SFAS 123R.

RESULTS OF OPERATIONS

Years Ended December 31, 2007, 2006 and 2005.

          Revenues. Revenues increased 7% in 2007 to $7,396,000 from $6,894,000 in 2006 after increasing 16% in 2006 from $5,918,000 in 2005. The three years presented reflect royalty revenues and licensing revenues. The increases in 2007 and 2006 revenues result from increased royalty revenue earned on sales of Thalomid^®. Beginning in 2005, we are entitled to share in the royalty payments received by Royalty Pharma Finance Trust on annual Thalomid^® sales above approximately $225 million. Thalomid^® sales in 2007, 2006 and 2005 surpassed the sharing point in the third quarter and we recorded estimated royalty revenues of $7,350,000, $6,882,000 and $5,310,000, respectively.

          We did not record any licensing revenues in 2007 and 2006, versus $591,000 in 2005. The 2005 amount reflects the accelerated recognition of deferred licensing revenues from the January 2002 agreement with Allergan, which was terminated in April 2005 by Allergan in accordance with the terms of the agreement, and the recognition of a $400,000 licensing payment from Alchemgen in May 2005. This amount was recorded as revenue when collectibility was deemed to be reasonably assured.

          Research and Development Expenses. Our 2007 research and development expenses, which totaled $23,739,000, a 10% increase from 2006, reflect an expanded clinical base including multiple trials for Panzem^® NCD and MKC-1, a Phase 1 clinical trial for ENMD-1198, and also the costs associated with the preparation and submission of two IND filings. The two IND filings, Panzem^® NCD in rheumatoid arthritis and ENMD-2076 in oncology, accounted for the increase in our 2007 R&D expenses. The 2007 amount reflects direct project costs for Panzem^® of $7,673,000, $2,200,000 for ENMD-1198, $3,241,000 for MKC-1 and $3,958,000 for ENMD-2076. In 2006, our research and development expenses totaled $21,671,000, reflecting direct project costs for Panzem^® of $7,814,000, $2,095,000 for ENMD-1198, $3,000,000 for MKC-1 and $1,457,000 for ENMD-2076. Research and development expenses totaled $17,325,000 in 2005, which included direct project costs of $7,594,000 for Panzem^® and $3,237,000 related to ENMD-1198. The 2006 increase was attributable to our January 2006 acquisition of Miikana Therapeutics, Inc. In 2006, we incurred R&D expenses of $5,167,000 related to initiating multiple MKC-1 clinical trials, advancement of two acquired pre-clinical programs and supporting the Toronto based research group. Our 2007 and 2006 R&D expenses also include non-cash stock-based compensation, pursuant to the adoption of SFAS 123R, totaling $353,000 and $352,000, respectively. The 2006 and 2005 expenditures reflect an increase in clinical and regulatory activity along with associated contract manufacturing activities.

          MKC-1 is currently being administered in four Phase 2 oncology trials and is also currently in a Phase 1 study for hematological cancers. Panzem^® NCD is being studied in multiple Phase 1 and 2 clinical trials and will also be evaluated as a potential product candidate in the treatment of rheumatoid arthritis. ENMD-1198, a an antimitotic agent, continues in the early stage of clinical development with an ongoing Phase 1 clinical trial in oncology. At December 31, 2007, accumulated direct project expenses for Panzem^® were $50,775,000, ENMD-1198 totaled $9,668,000, and since acquired, accumulated direct project expenses for MKC-1 totaled $6,241,000 and for ENMD-2076 totaled $5,415,000. The balance of our R&D expenditures includes facilities costs and other departmental overhead, and expenditures related to the advancement of our pre-clinical programs.

          The expenditures that will be necessary to execute our business plan are subject to numerous uncertainties, which may adversely affect our liquidity and capital resources. As of December 31, 2007, we have three proprietary product candidates in clinical trials along with two accepted IND filings. We expect our R&D expenses in 2008 to increase as these compounds advance through the various stages of clinical development. Completion of clinical trials may take several years or more, but the length of time generally varies substantially according to the type, complexity, novelty and intended use of a product candidate.

          We estimate that clinical trials of the type we generally conduct are typically completed over the following timelines:

CLINICAL PHASE		ESTIMATED COMPLETION PERIOD
Phase I		1 Year
Phase II		1-2 Years
Phase III		2-4 Years

          The duration and the cost of clinical trials may vary significantly over the life of a project as a result of differences arising during the clinical trial protocol, including, among others, the following:

	•		the number of patients that ultimately participate in the trial;
	•		the duration of patient follow-up that seems appropriate in view of the results;
	•		the number of clinical sites included in the trials; and
	•		the length of time required to enroll suitable patient subjects.

          We test our potential product candidates in numerous pre-clinical studies to identify indications for which they may be product candidates. We may conduct multiple clinical trials to cover a variety of indications for each product candidate. As we obtain results from trials, we may elect to discontinue clinical trials for certain product candidates or for certain indications in order to focus our resources on more promising product candidates or indications.

          Our proprietary product candidates also have not yet achieved FDA regulatory approval, which is required before we can market them as therapeutic products. In order to proceed to subsequent clinical trial stages and to ultimately achieve regulatory approval, the FDA must conclude that our clinical data establish safety and efficacy. Historically, the results from preclinical testing and early clinical trials have often not been predictive of results obtained in later clinical trials. A number of new drugs and biologics have shown promising results in clinical trials, but subsequently failed to establish sufficient safety and efficacy data to obtain necessary regulatory approvals.

          An important element of our business strategy is to pursue the research and development of a range of product candidates for a variety of oncology and non-oncology indications. This allows us to diversify the risks associated with our research and development expenditures. As a result, we intend to pursue development of our existing product candidates internally or through development partnerships, as well as through the acquisition and subsequent development of promising candidates. The goal is to align our future capital requirements with multiple product candidates and to increase the likelihood that our future financial success is not substantially dependent on any one product candidate. To the extent we are unable to maintain a broad range of product candidates, our dependence on the success of one or a few product candidates would increase.

          Furthermore, our business strategy includes the option of entering into collaborative arrangements with third parties to complete the development and commercialization of our products. In the event that third parties take over the clinical trial process for one of our product candidates, the estimated completion date would largely be under the control of that third party rather than us. We cannot forecast with any degree of certainty which proprietary products or indications, if any, will be subject to future collaborative arrangements, in whole or in part, and how such arrangements would affect our capital requirements.

          As a result of the uncertainties discussed above, among others, we are unable to estimate the duration and completion costs of our research and development projects. Our inability to complete our research and development projects in a timely manner or our failure to enter into collaborative agreements, when appropriate, could significantly increase our capital requirements and could adversely impact our liquidity. These uncertainties could force us to seek additional, external sources of financing from time to time in order to continue with our business strategy. There can be no assurance that we would be able to raise additional capital if needed. Our inability to raise additional capital, or to do so on terms reasonably acceptable to us, would jeopardize the future success of our business.

          Research and development expenses consist primarily of compensation and other expenses related to research and development personnel, research collaborations, costs associated with internal and contract pre-clinical testing and clinical trials of our product candidates, including the costs of manufacturing the product candidates, and facilities expenses. Overall research and development expenses increased to approximately $23,739,000 in 2007 from $21,671,000 in 2006, also an increase from $17,325,000 in 2005. The 2007 increase reflects the cost of the preparation and submission of two IND filings in addition to the ongoing clinical costs related to our three clinical-stage drug candidates. In 2007, we expanded our clinical trial base with the initiated one and two Phase 2 trials for MKC-1 and Panzem^® NCD, respectively. The 2006 increase resulted from our acquisition of Miikana in Janaury 2006. Our 2006 expenditures include $5,167,000 for R&D activities associated with MKC-1, two acquired pre-clinical programs and support for the Toronto-based research group. Reflected in the 2006 increase was the company’s shift to a more clinical focus resulting in the advancement to Phase 2 trials for Panzem^® NCD, the initiation of clinical development in oncology for ENMD-1198 and the addition of MKC-1 as a Phase 2 oncology clinical candidate. The research and development expenditures in 2005 reflect increased clinical and regulatory activity along with associated contract manufacturing activities related primarily to the increased costs associated with further development of various drug candidates.

          The increases in R&D expenses reflected in 2007 and 2006 were specifically impacted by the following:

	•		Outside Services — We utilize outsourcing to conduct our product development activities. Larger-scale small molecule synthesis, in vivo testing and data analysis are examples of the services that we outsource. We spent $2,871,000 in 2007, $3,621,000 in 2006 and $2,399,000 in 2005 on these activities. In 2007, the primary components of our outside services were directed towards toxicity studies to support the ENMD-2076 IND filing, while in 2006, these same activities were conducted to support the Panzem® NCD IND filing for rheumatoid arthritis. In 2006, we also conducted in vivo studies investigating solid dosage forms for ENMD-1198. The 21% decrease in expenditures for outside services in 2007 was due to the different activities conducted in connection with the ENMD-2076 studies, as compared to the outside service activities utilized in support of Panzem® NCD in 2006.
	•		Collaborative Research Agreements — We made payments to our collaborators of $470,000, $231,000 and $673,000 in years 2007, 2006 and 2005, respectively. Our collaborative efforts are primarily directed towards exploration of the mechanism-of-action (MOA) of our drug candidates and also in vivo testing of potential therapeutic combinations. Sponsored research payments to academic collaborators include payments to Children’s Hospital of $225,000 in 2005.
	•		Clinical Trial Costs — Clinical costs increased to $4,282,000 in 2007 from $3,406,000 in 2006, which increased from $1,090,000 in 2005. The significant increases in clinical trial costs in 2007 and 2006 reflect the progression of our clinical candidates and also, in 2006, the addition of a second Phase 2 oncology clinical candidate, MKC-1, acquired with Miikana Therapeutics. Our 2007 clinical expense reflects the initiation of two Phase 2 trials for Panzem® NCD, the initiation of one additional Phase 2 trial for MKC-1, and support of the ongoing studies that were initiated in 2006 for both compounds. The 2006 expenses include initiating and supporting multiple trials for Panzem® NCD, the initiation of a Phase 1 clinical trial for ENMD-1198 and the initiation of multiple trials for MKC-1. Our 2005 clinical expenses reflect two Phase 1b clinical trials for the reformulated PanzemÒ NCD. Costs of such trials include the clinical site fees, monitoring costs and data management costs.
	•		Contract Manufacturing Costs — The costs of manufacturing the material used in clinical trials for our product candidates is reflected in contract manufacturing. These costs include bulk manufacturing, formulation, encapsulation and fill finish services, product release costs and also payments to contract manufacturers for technology access or licensing fees. Contract manufacturing costs increased slightly in 2007 to $5,681,000 from $5,595,000 in 2006. The 2007 contract manufacturing spending increase reflects the costs of supplying finished drug product to support the new and ongoing trials for our three clinical drug candidates and also the cost of securing clinical material to support Phase 1 trials for ENMD-2076, which are expected to start in early 2008. Our 2006 expenses included $1,079,000 related to the manufacture of MKC-1, with the balance of the manufacturing activities related primarily to supporting our Phase 2 Panzem® NCD trials. Product manufacturing costs were $5,606,000 in 2005, which included material to support 2005 activities and also the acquisition of API for the PanzemÒ and ENMD-1198 clinical programs in 2006. In 2005, we also incurred formulation costs for finished drug product for both candidates including certain PanzemÒ NCD contract manufacturing milestones triggered by clinical events.
	•		Personnel Costs — Personnel costs increased to $5,301,000 in 2007 from $4,368,000 in 2006. The increase in 2007 is attributed to general compensation increases and also the hiring of additional employees, including the Senior Vice President of R&D and a director in Medicinal Chemistry. Included in the 2006 costs is $1,212,000 related to Miikana employees. Personnel costs were $2,864,000 in 2005.

          Also reflected in our 2007 research and development expenses are patent costs of $1,251,000, facility and related expenses of $1,500,000, laboratory supplies and animal costs of $1,111,000, consulting fees of $627,000 and travel expenses of $243,000. In 2006, these expenses totaled $766,000, $1,503,000, $1,062,000, $624,000 and $235,000, respectively, and in 2005, these expenses totaled $654,000, $1,351,000, $772,000, $296,000 and $200,000, respectively. The 2007 increase in these R&D expenses, which is primarily attributed to patent costs, results from supporting our broader pipeline.

          General and Administrative Expenses. General and administrative expenses include compensation and other expenses related to finance, business development and administrative personnel, professional services and facilities.

          General and administrative expenses decreased to approximately $7,387,000 in 2007 from $7,394,000 in 2006. General and administrative expenses were $5,920,000 in 2005. The increases in 2007 and 2006 from our 2005 expenses relate primarily to the recording of non-cash stock-based compensation, pursuant to the adoption of SFAS 123R, in the amount of $1,102,000 and $1,303,000, respectively.

          Acquired In-Process R&D. In January 2006, we acquired Miikana Therapeutics, a private biotechnology company. Pursuant to the merger agreement, we acquired all of the outstanding capital stock of Miikana Therapeutics, Inc. in exchange for 9.96 million shares of our common stock and the assumption of certain obligations. Miikana was a development stage company. Accordingly, the acquisition of Miikana was treated as an asset purchase. In accordance with EITF 98-3 “Determining Whether a Nonmonetary Transaction Involves Receipt of Productive Asset or of a Business,” and Statement 141 “Business Combinations” the $30.1 million purchase price was first allocated to the tangible assets acquired ($600,000) based on the estimated fair values at the acquisition date. The balance of the purchase price ($29,500,000) was allocated to intangible assets and recorded as in-process research and development as the research and development projects in Miikana’s pipeline, as of the acquisition date, had not reached technological feasibility and had no alternative use. We believe the fair values assigned to the assets acquired and liabilities assumed are based upon reasonable assumptions given current available facts and circumstances. The total purchase price allocated was $30.1 million, consisting of 9,964,000 shares of our common stock with a fair value of $21.9 million, assumed debt of $1.5 million, assumed current liabilities of $2.7 million, $1 million loaned to Miikana prior to the closing and acquisition costs of $3 million. The fair value of common stock was determined using the closing price at the date of acquisition.

          Interest expense. Interest expense for the year ended December 31, 2007 increased to approximately $793,000 from approximately $157,000 in 2006. The increase results from of a financing transaction with General Electric Capital Corporation (GECC) in September 2007 and the related interest expense. The 2006 interest expense related to debt with Venture Lending & Leasing IV, LLC, which we assumed pursuant to our acquisition of Miikana Therapeutics in January 2006, and which was paid in full in September, 2007. We had no interest-bearing debt during 2005.

          Investment income. Investment income increased by 13% in 2007 to $2,113,000 as a result of higher yields on higher invested balances in interest-bearing cash accounts and investments. Investment income was $1,867,000 in 2006, an increase of 85% from $1,011,000 in 2005.

          Dividends on Series A convertible preferred stock. The Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005 reflect dividends of $1,005,000 relating to Series A Convertible Preferred Stock held by Celgene pursuant to a Securities Purchase Agreement dated December 31, 2002. The holders of Series A Preferred Stock will accumulate dividends at a rate of 6% and will participate in dividends declared and paid on the common stock, if any. All accumulated dividends must be paid before any dividends may be declared or paid on the Common Stock. We have no plans to pay any dividends in the foreseeable future.

LIQUIDITY AND CAPITAL RESOURCES

          To date, we have been engaged primarily in research and development activities. As a result, we have incurred operating losses for 2007 and expect to continue to incur operating losses in the foreseeable future before we commercialize any products. In January 2006, we acquired Miikana Therapeutics, a private biotechnology company. Pursuant to the merger agreement, we acquired all of the outstanding capital stock of Miikana Therapeutics, Inc. in exchange for 9.96 million shares of common stock and the assumption of certain obligations. In addition, based on the success of the acquired pre-clinical programs, we may pay up to an additional $18 million upon the achievement of certain clinical and regulatory milestones. Such additional payments will be made in cash or shares of stock at our option. We expect that the Aurora Kinase pre-clinical program will advance to a Phase 1 clinical trial in early 2008. A dosing of the first patient triggers a purchase price adjustment milestone of $2 million, which we expect to be due (in cash or stock at our discretion) in the first half of 2008. Through the acquisition, we acquired rights to MKC-1, a Phase 2 clinical candidate licensed from Hoffman-LaRoche, Inc. (“Roche”) by Miikana in April 2005. Under the terms of the agreement, Roche may be entitled to receive future payments upon successful attainment of certain clinical, regulatory and commercialization milestones. We do not expect to trigger any of these milestone payments in 2008. Under the terms of the license agreements for 2ME2 and Celgene’s tubulin inhibitor program, we must be diligent in bringing potential products to market and we may be required to make future milestone payments totaling approximately $500,000 and $25.25 million, respectively. We do not expect to trigger any of these milestone payments in 2008. If we fail to comply with the milestones or fail to make any required sponsored research or milestone payment, we could face the termination of the relevant license agreement.

          At December 31, 2007, we had cash and short-term investments of $47,748,191 with working capital of $42,929,602. We invest our capital resources with the primary objective of capital preservation. As a result of trends in interest rates in 2007, we have invested in some securities with maturity dates of more than 90 days to enhance our investment yields. As such, some of our invested balances are classified as short-term investments rather than cash equivalents in our consolidated financial statements at December 31, 2007. Our short-term investments consist primarily of corporate debt securities, all of which mature within one year.

FINANCING ACTIVITIES

          On September 12, 2007, we entered into a Loan and Security Agreement with General Electric Capital Corporation (“GECC”), as agent, Merrill Lynch Capital and Oxford Finance Corporation (collectively with GECC, “the Lenders”). The Loan Agreement provided for a term loan issued by the Lenders to the Company in the aggregate amount of $20 million. In connection with the transaction, we issued warrants with an exercise price of $2.00 per share to the Lenders providing rights to purchase their respective pro rata share of 250,000 shares of common stock of the Company.

          The loan accrues interest in arrears at a fixed annual interest rate of 10.47% until fully repaid. The loan is to be repaid by the Company to GECC, for the ratable benefit of the Lenders, as nine consecutive monthly payments of interest only, each in the amount of $174,500, which commenced on November 1, 2007, and thirty consecutive monthly payments of principal and interest, each in the amount of $760,606, commencing on August 1, 2008.

          The Loan Agreement contains customary affirmative and negative covenants. We were in compliance with such covenants as of December 31, 2007.

          In December 2006, we completed a registered direct offering of 10,727,500 shares of our common stock at a price of $1.60 per share, for net proceeds of $15.9 million, after transaction-related expenses.

          In February 2006, we completed a private placement to institutional investors of units consisting of our common stock and warrants. We issued 12,972,966 shares of stock and warrants that are currently exercisable and remain exercisable until February 7, 2011 at an exercise price of $2.50 per share. We received net proceeds from the financing of approximately $27.9 million.

          To accomplish our business plans, we will be required to continue to conduct substantial development activities for some or all of our proposed products. Under our current operating plans in 2008, we expect to have four compounds under clinical investigation and we expect our 2008 results of operations to reflect a net loss of approximately $30,200,000, including non-cash charges of approximately $4,600,000. Management may deviate from its current operating plans throughout the fiscal year, based on the results received from our ongoing trials and our research and development efforts, and therefore we may increase or decrease funding of, or abandon, certain clinical investigations or other compounds in our pipeline. Any material change to our corporate strategy and drug candidate development pipeline may result in higher or lower aggregate net losses for fiscal 2008. In addition to the continued clinical development of MKC-1 and ENMD-1198, we plan to begin clinical evaluation of ENMD-2076 in oncology. We expect that the majority of our 2008 revenues will continue to be from royalties on the sale of Thalomid^®. Based on the historical sales trends for Thalomid^®, we expect to record royalty-sharing revenues of approximately $7.0 million in 2008; however, there can be no assurance in this regard. In addition, under our licensing agreement with Oxford Biomedica, PLC and Oxford Biomedica (UK) Limited Oxford, we are entitled to receive payments upon the achievement of certain milestones. However, we do not control the drug development efforts of Oxford and have no control over when or whether such milestones will be reached. We do not believe that we will receive any developmental milestone payments under these agreements in 2008.

          Based on our assessment of our current capital resources coupled with anticipated inflows, in the absence of additional financing, we believe that we will have adequate resources to fund planned operations for at least twelve months from December 31, 2007. Our estimate may change, however, based on our decisions with respect to future clinical trials related to our product candidates, the timing of receipt of milestone payments, developments in our business including the acquisition of additional intellectual property, other investments in new or complimentary technology, and our success in executing our current business plan.

          To address our long-term capital needs, we intend to continue to pursue strategic relationships and acquisitions that will provide resources for the further development of our product candidates or expand our product pipeline. There can be no assurance, however, that these discussions will result in relationships or additional funding. In addition, we may continue to seek capital through the public or private sale of securities, if market conditions are favorable for doing so. If we are successful in raising additional funds through the issuance of equity securities, stockholders will likely experience substantial dilution, or the equity securities may have rights, preferences or privileges senior to those of the holders of our common stock. If we raise funds through the issuance of debt securities, those securities would have rights, preferences and privileges senior to those of our common stock. There can be no assurance that we will be successful in seeking additional capital.

INFLATION AND INTEREST RATE CHANGES

          Management does not believe that our working capital needs are sensitive to inflation and changes in interest rates.

CONTRACTUAL OBLIGATIONS

The table below sets forth our contractual obligations at December 31, 2007.

CONTRACTUAL OBLIGATIONS		PAYMENTS DUE BY PERIOD
		Total				Less than 1 year				1 – 3 years				3 – 5 years				More than 5 years
Operating Leases Obligations		$	1,216,000			$	1,044,000			$	172,000			$	—			$	—
Loan Payable, including interest			20,000,000				2,982,000				17,018,000
Obligations under Licensing and Miikana Merger Agreements (1)			—				—				—				—				—
Purchase Obligations
Clinical Trial Contracts			5,971,000				4,777,000				1,194,000				—				—
Contract Manufacturing			1,523,000				1,523,000				—				—				—
Outside Service Contracts			258,000				258,000				—				—				—
Other Contracts			140,000				140,000				—				—				—
Total Contractual Cash Obligations		$	29,108,000			$	10,724,000			$	18,384,000			$	—			$	—

OFF-BALANCE-SHEET ARRANGEMENTS

          We had no significant off-balance sheet arrangements during fiscal year 2007.

NEW ACCOUNTING PRONOUNCEMENTS

          In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (SFAS 157). SFAS 157 provides guidance for using fair value to measure assets and liabilities. It also responds to investors’ requests for expanded information about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value, and does not expand the use of fair value in any new circumstances. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Based on our current use of fair value measurements, SFAS 157 is not expected to have a material effect on our results of operations or financial condition.

          In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” (SFAS 159), which provides companies with an option to report selected financial assets and liabilities at fair value. SFAS 159 establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities and highlights the effect of a company’s choice to use fair value on its earnings. It also requires a company to display the fair value of those assets and liabilities for which it has chosen to use fair value on the face of the balance sheet. SFAS 159 will be effective for us beginning January 1, 2008 and is not expected to have a material impact on our consolidated financial statements.

          In June 2007, the FASB issued EITF No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services Received for use in Future Research and Development Activities (“EITF No. 07-3”). EITF No. 07-3 states that nonrefundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. Such amounts should be recognized as an expense as the related goods are delivered or the related services are performed. Entities should continue to evaluate whether they expect the goods to be delivered or services to be rendered. If an entity does not expect the goods to be delivered or services to be rendered, the capitalized advance payment should be charged to expense. The provisions of EITF No. 07-3 will be effective for us on a prospective basis beginning January 1, 2008 and evaluated on a contract by contract basis.

          In December 2007, the FASB issued SFAS No. 141(R), a revised version of SFAS No. 141, “Business Combinations.” The revision is intended to simplify existing guidance and converge rulemaking under U.S. generally accepted accounting principles with international accounting standards. This statement applies prospectively to business combinations where the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. An entity may not apply it before that date. We are currently evaluating the impact of the provisions of the revision on our consolidated results of operations and financial condition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

          The primary objective of our investment activities is to preserve our capital until it is required to fund operations while at the same time maximizing the income we receive from our investments without incurring investment market volatility risk. Our investment income is sensitive to the general level of U.S. interest rates. In this regard, changes in the U.S. interest rates affect the interest earned on our cash and cash equivalents. Due to the short-term nature of our cash and cash equivalent holdings, a 10% movement in market interest rates would not materially impact on the total fair market value of our portfolio as of December 31, 2007.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

          The response to this item is submitted in a separate section of this report. See Index to Consolidated Financial Statements on Page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

          None.

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

          As of the end of the period covered by this Annual Report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer (its principal executive officer and principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)). Our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management (including our Chief Executive Officer and Chief Financial Officer) to allow timely decisions regarding required disclosures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded these disclosure controls are effective as of December 31, 2007.

Changes in Internal Control Over Financial Reporting

          During the quarter ended December 31, 2007, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting except as described below.

Management’s Report on Internal Control Over Financial Reporting

          Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Securities Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles. Any internal control over financial reporting, no matter how well designed, has inherent limitations. As a result of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those internal controls determined to be effective can provide only reasonable assurance with respect to reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

          Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we conducted an assessment of the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on our assessment, we concluded that our internal control over financial reporting was effective as of December 31, 2007.

          Ernst & Young LLP, the independent registered public accounting firm that has audited our consolidated financial statements included herein, has issued an attestation report on the effectiveness of our internal control over financial reporting as of December 31, 2007, a copy of which is included in this Annual Report on Form 10-K.

Report of Independent Registered Public Accounting Firm
On Internal Control Over Financial Reporting

The Board of Directors and Stockholders of EntreMed, Inc.

We have audited EntreMed, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). EntreMed, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying “Management’s Report on Internal Control over Financial Reporting.” Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, EntreMed, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of EntreMed, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2007 of EntreMed, Inc. and our report dated March 5, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

McLean, Virginia

March 5, 2008

ITEM 9B. OTHER INFORMATION

          None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

          Information required by this item will be contained in our Definitive Proxy Statement for our 2008 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2007. Such information is incorporated herein by reference.

          We have adopted a Code of Ethics, as defined in applicable SEC and NASD rules, that applies to directors, officers and employees, including our principal executive officer and principal financial and accounting officer. The Code of Ethics is available on the Company’s website at www.entremed.com.

ITEM 11. EXECUTIVE COMPENSATION

          Information required by this item will be contained in our Definitive Proxy Statement for our 2008 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2007. Such information is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

          Information required by this item will be contained in our Definitive Proxy Statement for our 2008 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2007. Such information is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

          Information required by this item will be contained in our Definitive Proxy Statement for our 2008 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2007. Such information is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

          Information required by this item will be contained in our Definitive Proxy Statement for our 2008 Annual Meeting of Stockholders, to be filed pursuant to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2007. Such information is incorporated herein by reference.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) 1. FINANCIAL STATEMENTS — See index to Consolidated Financial Statements.

     2. Schedules

          All financial statement schedules are omitted because they are not applicable, not required under the instructions or all the information required is set forth in the financial statements or notes thereto.

     3. Exhibits

2.1(19)		Agreement and Plan of Merger, dated as of December 22, 2005 among EntreMed, Inc., E.M.K. Sub, Inc., Miikana Therapeutics, Inc., and Andrew Schwab
3.1		Amended and Restated Certificate of Incorporation of EntreMed, Inc. (incorporated by reference from our Form 10-Q for the quarter ended June 30, 2006 previously filed with the Securities and Exchange Commission)
3.2		By-laws of EntreMed, Inc. (incorporated by reference from our Form 8-K filed on December 6, 2007 previously filed with the Securities and Exchange Comission)
4.1		Certificate of Designations of the Series A Convertible Preferred Stock (incorporated by reference to Exhibit 99.4 of our Form 8-K dated December 31, 2002, and filed with the Securities and Exchange Commission on January 15, 2003)
4.2		Warrant to Purchase Common Stock, dated January 13, 2003, issued by EntreMed, Inc. in favor of Celgene Corporation (incorporated by reference to Exhibit 99.5 of our Form 8-K dated December 31, 2002, and filed with the Securities and Exchange Commission on January 15, 2003)
4.3		Warrant to Purchase Common Stock, dated September 12, 2007, issued by EntreMed, Inc. in favor of General Electric Capital Corporation (incorporated by reference from our Form 10-Q for the quarter ended September 30, 2007 previously filed with the Securities and Exchange Commission)
4.4		Warrant to Purchase Common Stock, dated September 12, 2007, issued by EntreMed, Inc. in favor of Merrill Lynch Capital (incorporated by reference from our Form 10-Q for the quarter ended September 30, 2007 previously filed with the Securities and Exchange Commission)
4.5		Warrant to Purchase Common Stock, dated September 12, 2007, issued by EntreMed, Inc. in favor of Oxford Finance Corporation (incorporated by reference from our Form 10-Q for the quarter ended September 30, 2007 previously filed with the Securities and Exchange Commission)
10.1(1)		1992 Stock Incentive Plan*
10.2(1)		Amended and Restated 1996 Stock Option Plan*
10.3(1)		Form of Stock Option Agreement, under Amended and Restated 1996 Stock Option Plan*
10.4(2)		License Agreement between Children’s Hospital Medical Center Corporation and EntreMed, Inc. signed December 20, 1996 regarding Estrogenic Compounds as Anti-Mitotic Agents
10.5(3)		Amendment to the 1996 Stock Option Plan*
10.6(4)		License Agreement between Celgene Corporation and EntreMed, Inc. signed December 9, 1998 regarding thalidomide intellectual property

10.7(4)		Lease Agreement between EntreMed, Inc. and Red Gate III Limited Partnership, dated June 10, 1998
10.8(5)		1999 Long-Term Incentive Plan*
10.9(6)		EntreMed, Inc. 2001 Long-Term Incentive Plan*
10.10.1(7)		Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated June 15, 2001+
10.10.2(7)		Amendment 1 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated July 13, 2001
10.10.3(7)		Amendment 2 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated July 30, 2001
10.10.4(7)		Amendment 3 to Purchase Agreement between Bioventure Investments kft and EntreMed, Inc., dated August 3, 2001
10.11(8)		Board Service Agreement, dated February 5, 2003, between Michael M. Tarnow and EntreMed, Inc. *
10.12(9)		Securities Purchase Agreement by and among EntreMed, Inc., and Celgene Corporation, dated as of December 31, 2002
10.13(9)		Investor and Registration Rights Agreement by and between EntreMed, Inc. and Celgene Corporation, dated as of December 31, 2002
10.14(10)		Employment Agreement between EntreMed and James S. Burns effective June 15, 2004, as amended*
10.15(11)		Employment Agreement between EntreMed and Dane Saglio effective July 1, 2004, as amended*
10.18(16)		Letter Agreement between EntreMed and Dane Saglio dated May 20, 2005*
10.19(12)		Employment Agreement between EntreMed and Carolyn F. Sidor, M.D. effective December 1, 2004, as amended*
10.20(13)		Securities Purchase Agreement by and among EntreMed and Certain Institutional Investors, dated as of December 23, 2004
10.21(14)		EntreMed, Inc. 2001 Long Term Incentive Plan Non-Qualified Stock Option Grant Agreement (Director)*
10.22(14)		EntreMed, Inc. 2001 Long Term Incentive Plan Non-Qualified Stock Option Grant Agreement (Non-Director Employee)*
10.23(15)		Form of Letter Agreement between EntreMed and James S. Burns*
10.24(15)		Form of Restricted Stock Award under EntreMed, Inc. 2001 Long Term Incentive Plan*
10.25(16)		Employment Agreement by and between EntreMed and Marc Corrado, dated as of May 20, 2005*
10.25(17)		License Agreement between EntreMed and Celgene Corporation signed March 24, 2005 regarding the development and commercialization of Celgene’s small molecule tubulin inhibitor compounds for the treatment of cancer+

10.26(18)		Description of Compensation of Directors*
10.27(20)		Employment Agreement by and between EntreMed and Cynthia Wong, dated as of June 1, 2006, as amended*
10.28(21)		Letter Agreement between EntreMed and Dane Saglio dated June 21, 2006*
10.29(22)		License Agreement, dated January 9, 2006, by and between Elan Pharma International Limited and EntreMed, Inc. +
10.30(22)		Research, Development and Commercialization Agreement, dated as of April 20, 2005, by and between Hoffman-La Roche Inc. and F. Hoffman La Roche Ltd. (together, “Roche”), and Miikana Therapeutics Inc.+
10.31(23)		Loan and Security Agreement dated September 12, 2007 among General Electric Capital Corporation, Oxford Finance Corporation, Merrill Lynch Capital, as the lenders and EntreMed, Inc. and Miikana Therapeutics, Inc. as the loan parties
10.32(23)		Promissory Note dated September 12, 2007 to General Electric Capital Corporation
10.33(23)		Promissory Note dated September 12, 2007 to Merrill Lynch Capital
10.34(23)		Promissory Note dated September 12, 2007 to Oxford Finance Corporation
23.1		Consent of Independent Registered Public Accounting Firm
31.1		Rule 13a-14(a) Certification of President and CEO
31.2		Rule 13a-14(a) Certification of Chief Financial Officer
32.1		Rule 13a-14(b) Certification by President and CEO
32.2		Rule 13a-14(b) Certification by Chief Financial Officer

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

     Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.

SIGNATURE		TITLE		DATE
/s/ Michael M. Tarnow   Michael M. Tarnow		Chairman of the Board		March 3, 2008
/s/ James S. Burns   James S. Burns		President and Chief Executive Officer		March 5, 2008
/s/ Dane R. Saglio   Dane R. Saglio		Chief Financial Officer (Principal Financial and Accounting Officer)		March 1, 2008
/s/ Donald S. Brooks   Donald S. Brooks		Director		March 3, 2008
/s/ Dwight L. Bush   Dwight L. Bush		Director		March 1, 2008
/s/ Jennie C. Hunter-Cevera   Jennie C. Hunter-Cevera		Director		March 3, 2008
/s/ Mark C. M. Randall   Mark C. M. Randall		Director		March 3, 2008
/s/ Ronald Cape   Ronald Cape		Director		March 3, 2008
/s/ Peter S. Knight   Peter S. Knight		Director		March 1, 2008

The following consolidated financial statements of EntreMed, Inc. are included in Item 8:

Report of Independent Registered Public Accounting Firm		F-2
Consolidated Balance Sheets as of December 31, 2007 and 2006		F-3
Consolidated Statements of Operations for the years ended December 31, 2007, 2006 and 2005		F-4
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2007, 2006 and 2005		F-5
Consolidated Statements of Cash Flows for the years ended December 31, 2007, 2006 and 2005		F-6
Notes to Consolidated Financial Statements		F-7

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of EntreMed, Inc.:

We have audited the accompanying consolidated balance sheets of EntreMed, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December, 31 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of EntreMed, Inc. at December 31, 2007 and 2006, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2006 the Company changed its accounting for stock-based compensation in connection with the adoption of FASB Statement No. 123(R), “Share-Based Payment.”

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), EntreMed, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 5, 2008 expressed an unqualified opinion thereon.

/s/  Ernst & Young LLP

McLean, Virginia

March 5, 2008

EntreMed, Inc.
Consolidated Balance Sheets

		DECEMBER 31,
		2007				2006
ASSETS
Current assets:
Cash and cash equivalents		$	29,675,899			$	20,896,141
Short-term investments			18,072,292				29,673,956
Accounts receivable			3,901,554				3,845,000
Interest receivable			144,191				73,895
Prepaid expenses and other			464,083				377,871
Total current assets			52,258,019				54,866,863
Property and equipment, net			620,456				847,561
Other assets			136,433				5,110
Total assets		$	53,014,908			$	55,719,534
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	4,550,892			$	5,946,852
Accrued liabilities			1,675,814				1,828,164
Current portion of loan payable			2,982,117				751,093
Current portion of deferred rent			119,594				89,849
Total current liabilities			9,328,417				8,615,958
Loan payable, less current portion			16,768,749				—
Deferred rent, less current portion			20,764				140,357
Stockholders’ equity:
Convertible preferred stock, $1.00 par value; 5,000,000 shares authorized and 3,350,000 shares issued and outstanding at December 31, 2007 and 2006 (liquidation value — $33,500,000 at December 31, 2007 and 2006)			3,350,000				3,350,000
Common stock, $.01 par value:
170,000,000 and 170,000,000 shares authorized; 85,712,992 and 84,839,585 shares issued and outstanding at December 31, 2007 and 2006, respectively			857,125				848,400
Additional paid-in capital			364,705,150				362,318,737
Treasury stock, at cost: 874,999 shares held at December 31, 2007 and 2006			(8,034,244	)			(8,034,244	)
Accumulated other comprehensive income			66,954				117,212
Accumulated deficit			(334,048,007	)			(311,636,886	)
Total stockholders’ equity			26,896,978				46,963,219
Total liabilities and stockholders’ equity		$	53,014,908			$	55,719,534

See accompanying notes.

EntreMed, Inc.
Consolidated Statements of Operations

		YEAR ENDED DECEMBER 31,
		2007				2006				2005
Revenues:
Licensing		$	—			$	—			$	590,992
Royalties			7,393,463				6,881,799				5,310,439
Other			2,188				12,559				16,624
			7,395,651				6,894,358				5,918,055
Costs and expenses:
Research and development			23,739,392				21,671,117				17,363,890
General and administrative			7,386,570				7,393,722				5,881,613
Acquired In-Process R&D			—				29,481,894				—
			31,125,962				58,546,733				23,245,503
Investment income			2,112,583				1,867,204				1,010,771
Interest expense			(793,393	)			(156,787	)			—
Gain on sale of assets			—				52,901				3,420
Net loss			(22,411,121	)			(49,889,057	)			(16,313,257	)
Dividends on Series A convertible preferred stock			(1,005,000	)			(1,005,000	)			(1,005,000	)
Net loss attributable to common shareholders		$	(23,416,121	)		$	(50,894,057	)		$	(17,318,257	)
Net loss per share (basic and diluted)		$	(0.28	)		$	(0.71	)		$	(0.36	)
Weighted average number of shares outstanding (basic and diluted)			84,166,552				71,873,734				48,176,914

See accompanying notes.

ENTREMED, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
Periods Ended December 31, 2007, 2006 and 2005