GERMANTOWN, Md.
Nov. 7

MiddleBrook Pharmaceuticals, Inc. (Nasdaq: MBRK), a pharmaceutical company focused on developing and commercializing novel anti-infective products, announced an agreement with Deerfield Management, a healthcare investment fund and one of the Company's largest equity shareholders, raising up to $10 million in cash.

Under the terms of the agreement, $7.5 million will be immediately received by the Company with an additional $2.5 million to become available, if necessary, if and when the Company receives U.S. Food and Drug Administration (FDA) approval of Amoxicillin PULSYS. The agreement is designed to provide the Company with the financial flexibility to continue its ongoing strategic discussions beyond the PDUFA date for Amoxicillin PULSYS. The cash provided from the Deerfield agreement will also allow MiddleBrook to repay in full its outstanding loan facility with Merrill Lynch and eliminate the associated interest and principal payments.

"We are pleased to enter into this agreement with Deerfield as it provides us with the financial flexibility to continue our strategic discussions beyond the Amoxicillin PULSYS PDUFA date," commented Dr. Edward Rudnic, MiddleBrook president and CEO. "This agreement will also allow us to repay our loan facility with Merrill Lynch which has restricted our use of cash and other corporate assets."

MiddleBrook also announced that its process to explore strategic alternatives is still ongoing and may extend beyond the Company's expected Amoxicillin PULSYS FDA action date of January 23, 2008. MiddleBrook intends to actively continue its strategic evaluation process, alternatives for which include, but are not limited to, the possible sale of some or all of the Company's assets, partnering or other collaboration agreements, or a merger or other strategic transaction. There can be no assurance that the exploration of strategic alternatives at that time will result in any agreements or transactions, or that, if completed, any agreements or transactions will be successful or on attractive terms.

Transaction Terms
At the transaction closing on November 7, 2007, MiddleBrook sold certain assets, and assigned certain intellectual property rights, relating only to its existing cephalexin business, excluding cephalexin PULSYS, to Deerfield for $7.5 million, less a $500,000 payment to Deerfield. Pursuant to a consignment of those assets and license of those intellectual property rights back to the Company, the Company will continue to operate its existing cephalexin business, subject to royalty payments to Deerfield of 20% of net sales, which declines to a single digit royalty as the agreement matures. In addition, the Company granted to Deerfield a six-year warrant to purchase 3.0 million shares of the Company's common stock at $1.38, the closing market price on November 7, 2007.

If and when the Company receives approval of its Amoxicillin PULSYS New Drug Application, it may require Deerfield to acquire and license certain intellectual property rights relating only to the Company's cephalexin PULSYS business for a payment of $2.5 million. Pursuant to a sublicense of those intellectual property rights back to the Company, the Company will continue to operate its cephalexin PULSYS business. Cephalexin PULSYS is not approved for marketing by the FDA.

Deerfield also granted the Company the right to repurchase all assets and rights acquired and licensed by Deerfield for a flat purchase price of $14.0 million, if the Company has required Deerfield to acquire the intellectual property rights relating to the Company's cephalexin PULSYS business, or $11.0 million if Deerfield has not acquired these rights (in each case subject to certain adjustments), assuming the Company exercises its repurchase rights prior to November 7, 2008. Those repurchase prices will increase by $2.0 million on each subsequent anniversary of that date. The Company's exercise of this purchase right is mandatory upon the change of control of the Company.