Pharmacopeia Announces Second Quarter 2008 Financial Results

PRINCETON, N.J., July 31, 2008 (PRIME NEWSWIRE) -- Pharmacopeia (Nasdaq:PCOP)
today announced results for the quarter ended June 30, 2008 and further plans
related to the clinical development of PS433540.

Based on input from Key Opinion Leaders, potential corporate partners, and the
investment community, Pharmacopeia announced today that it intends to pursue
diabetic nephropathy as the primary indication for PS433540, the lead compound
from its Dual Acting Receptor Antagonist (DARA) program. Dual Acting Receptor
Antagonism is thought to have particular utility in diabetic nephropathy as
emerging preclinical and clinical data support that angiotensin and endothelin
work together to cause damage to the kidneys(1-3). Dual blockade of angiotensin
and endothelin at their respective receptors may offer additive or synergistic
effects in slowing kidney disease progression(4).

With the decision to pursue diabetic nephropathy as the primary indication for
PS433540, and after fully evaluating the safety and efficacy data reported from
the Phase 2a study of PS433540 for hypertension, Pharmacopeia also announced
today a reduction in the number of subjects in the ongoing Phase 2b study of
PS433540 in subjects with hypertension. The objective of the Phase 2b study is
to evaluate 200 mg and 400 mg of PS433540 versus placebo while also comparing
efficacy and safety data to irbesartan. Pharmacopeia expects to report upon
approximately 250 patients versus the 375 patients originally planned. The
decision to reduce the number of subjects in the Phase 2b study was not based on
the occurrence or anticipated occurrence of adverse events. Although data from
the Phase 2b study remains blinded, the data to date has a similar safety
profile to that observed in the Phase 2a trial. Pharmacopeia expects this
randomized, double-blinded, placebo and active-controlled, parallel-group, Phase
2b study in subjects with Stage 1 and Stage 2 hypertension to be completed in
the fourth quarter of 2008.

"The Phase 2a study of PS433540 provided robust efficacy data in hypertension,
and we are confident of its potential ability to become a novel treatment for
diabetic nephropathy," stated Joseph Mollica, Ph.D., Chairman of the Board and
Interim President and Chief Executive Officer of Pharmacopeia. "Our decision to
develop PS433540 for diabetic nephropathy is based on clinical fit with the
mechanism of action and the level of unmet medical need for diabetic nephropathy
treatments. There are approximately 3 to 4 million people in the U.S. alone with
diabetic kidney disease and several times this number worldwide. About 20 to 30
percent of all patients with diabetes will develop evidence of nephropathy. We
are enthusiastic about the therapeutic potential of PS433540 and the other
candidates in our pipeline and will continue to consider opportunities to
partner PS433540 as well as evaluate corporate strategic alternatives," he
continued.

To facilitate Pharmacopeia's ability to progress its assets in clinical
development, the company expects to further reduce its workforce in the third
quarter. In May 2008, Pharmacopeia had announced a reduction of approximately 15
percent of its workforce through attrition and termination of positions. The
company will continue to fulfill its contractual commitments to its corporate
partners.

As a result of its reduction in operating expenditures, Pharmacopeia expects the
cash burn for the quarter ending December 31, 2008 to be approximately $10
million exclusive of restructuring related expenditures. The company expects its
quarterly cash burn to be less than $10 million in 2009. In addition to its
ongoing cost saving efforts, the company believes it has a number of
opportunities to generate cash, including establishing a partnership for
PS433540, the continued success of its discovery efforts on behalf of partners,
future development milestones and potential royalties for the several clinical
candidates discovered by Pharmacopeia that are being advanced by partners such
as Schering-Plough and Bristol-Myers Squibb (BMS) and, when appropriate,
accessing the capital markets.

SECOND QUARTER 2008 FINANCIAL RESULTS

At June 30, 2008, Pharmacopeia had cash, cash equivalents and marketable
securities of $44.4 million, compared to $71.3 million at December 31, 2007. The
cash burn for the quarter ended June 30, 2008, was $17.1 million. As of June 30,
2008, Pharmacopeia had deferred revenue of $46.2 million relating to research
and development activities that are to be performed by the company subsequent to
June 30, 2008.

Pharmacopeia reported a net loss of $15.6 million, or ($0.53) per basic and
diluted share, for the quarter ended June 30, 2008, compared to a net loss of
$6.9 million, or ($0.26) per basic and diluted share, for the quarter ended June
30, 2007. In the six months ended June 30, 2008, Pharmacopeia reported a net
loss of $27.3 million, or ($0.92) per basic and diluted share, compared to a net
loss of $16.9 million, or ($0.63) per basic and diluted share for the same
period in 2007.

Pharmacopeia's net revenue was $5.9 million for the quarter ended June 30, 2008,
compared to $5.0 million for the quarter ended June 30, 2007, an increase of
19%. Net revenue for the six months ended June 30, 2008 was $12.1 million,
compared to $11.3 million in the six months ended June 30, 2007, an increase of
7%. These increases were primarily due to increased revenue recognized under
Pharmacopeia's agreements with Schering-Plough, GSK and BMS offset by lower
milestone revenue in 2008.

Collaborative research and development expense was $7.2 million for the quarter
ended June 30, 2008, compared to $5.7 million for the quarter ended June 30,
2007, an increase of 27%. For the six months ended June 30, 2008 and 2007,
collaborative research and development expense increased 39% to $15.1 million,
compared to $10.9 million in the prior year. These increases were primarily due
to increased resources allocated to Pharmacopeia's alliances with
Schering-Plough and GSK, as well as the company's discovery collaboration
agreement with BMS that was entered into in connection with the SARM program
acquisition.

Proprietary research and development expense was $9.2 million for the quarter
ended June 30, 2008, compared to $5.0 million for the quarter ended June 30,
2007, an increase of 83%. For the six months ended June 30, 2008 and 2007,
proprietary research and development expense increased 44% to $18.0 million,
compared to $12.5 million in the prior year. These increases were primarily due
to increased costs related to clinical development studies for PS433540.

General and administrative expense increased to $4.1 million for the quarter
ended June 30, 2008, compared to $2.8 million for the quarter ended June 30,
2007, an increase of 47%. For the six months ended June 30, 2008 and 2007,
general and administrative expense increased 37% to $7.5 million, compared to
$5.5 million in the prior year. These increases were primarily due to severance
costs incurred in connection with the resignation of the company's former
President and Chief Executive Officer. Also contributing to these increases were
increased compensation costs and patent prosecution and other legal costs.

In connection with the restructuring plan the company committed to in May 2008,
the company recorded a charge of approximately $1.7 million in the three and six
months ended June 30, 2008, which consisted of severance and benefits costs
related to the former employees affected by the reduction in force and costs
associated with streamlining facilities. This charge was classified as
restructuring expense in the company's statements of operations. There were no
such costs incurred in the comparable periods in 2007.

Other income for the six months ended June 30, 2008 consisted of $700 thousand
the company received in connection with the assignment of certain intellectual
property to a collaborator with which the company's research activities had
ceased.

SECOND QUARTER CONFERENCE CALL AND WEBCAST INFORMATION

Further details regarding Pharmacopeia's second quarter financial results will
be presented in a conference call today, July 31, 2008 at 5:00 p.m. Eastern
Time. Dr. Joseph A. Mollica, Chairman of the Board and Interim President and
Chief Executive Officer; Mr. Brian M. Posner, Executive Vice President and Chief
Financial Officer; and Dr. Rene Belder, Senior Vice President, Clinical and
Regulatory Affairs, will host the call. Forward-looking and material information
may be discussed on this conference call.

Date: July 31, 2008
Time: 5:00 p.m. EDT
U.S./Canada Participants: (877) 548-7901
International Participants: (719) 325-4871
Confirmation Code: 3478659
Name of Conference: Pharmacopeia's Second Quarter 2008
Financial Results Conference Call
Webcast information can be accessed by visiting www.pharmacopeia.com
A replay of the conference call can be accessed by dialing toll-free
888-203-1112 in the U.S., or 719-457-0820 outside the U.S. The access code for
the replay is 3478659. Replay of the webcast will also be accessible on
Pharmacopeia's website on the Investors page at http://www.pharmacopeia.com. The
replays will be available for two weeks.

ABOUT PHARMACOPEIA

Pharmacopeia is a clinical development stage biopharmaceutical company dedicated
to discovering and developing novel small molecule therapeutics to address
significant medical needs. The company has a broad portfolio of clinical and
preclinical candidates under development internally or by partners including
nine clinical compounds in Phase 2 or Phase 1 development addressing multiple
indications including diabetic nephropathy, hypertension, muscle wasting,
inflammation and respiratory disease. The company is leveraging its fully
integrated drug discovery platform to sustain the growth of its development
pipeline. Pharmacopeia has established strategic alliances with major
pharmaceutical and biotechnology companies, including Bristol-Myers Squibb,
Celgene, Cephalon, GlaxoSmithKline, Schering-Plough, and Wyeth Pharmaceuticals.
For more information please visit the company's website at
http://www.pharmacopeia.com.

This press release, and oral statements made with respect to information
contained in this press release, constitute forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements include those which express plan, anticipation,
intent, goal, contingency or future development and/or otherwise are not
statements of historical fact. These statements are based upon management's
current expectations and are subject to risks and uncertainties, known and
unknown, which could cause actual results and developments to differ materially
from those expressed or implied in such statements. These forward-looking
statements include, but are not limited to, statements about the successful
implementation of Pharmacopeia's strategic plans, Pharmacopeia's plans to
develop PS433540, a product candidate from its DARA program, Pharmacopeia's
Phase 2 clinical studies with respect to PS433540, including timing and expected
outcomes of such studies, Pharmacopeia's ability to raise additional capital,
Pharmacopeia's anticipated operating results, financial condition, liquidity and
capital resources, Pharmacopeia's plans to develop PS178990, a product candidate
from its SARM program, Pharmacopeia's Phase 1 clinical studies with respect to
PS178990, including timing and expected outcomes of such studies, Pharmacopeia's
plans to develop PS031291, a product candidate from its chemokine receptor CCR1
program, Pharmacopeia's estimates of the market opportunities for its product
candidates, including PS433540, PS178990 and PS031291, Pharmacopeia's ability to
successfully perform under its collaborations with Bristol-Myers Squibb,
Cephalon, GlaxoSmithKline, Schering-Plough and Wyeth, Pharmacopeia's ability to
build its pipeline of novel drug candidates through its own internally-funded
drug discovery programs, third party collaborations and in-licensing,
Pharmacopeia's expectations concerning the development priorities of its
collaborators, their ability to successfully develop compounds and its receipt
of milestones and royalties from the collaborations, Pharmacopeia's expectations
concerning the legal protections afforded by U.S. and international patent law,
Pharmacopeia's ability to pursue the development of new compounds and other
business matters without infringing the patent rights of others, additional
competition, and changes in economic conditions.

Further information about these and other relevant risks and uncertainties may
be found in Pharmacopeia's Reports on Form 8-K, 10-Q and 10-K filed with the
U.S. Securities and Exchange Commission. Pharmacopeia urges you to carefully
review and consider the disclosures found in its filings which are available in
the SEC EDGAR database at http://www.sec.gov and from Pharmacopeia at
http://www.pharmacopeia.com. All forward-looking statements in this press
release and oral statements made with respect to information contained in this
press release are qualified entirely by the cautionary statements included in
this press release and such filings. These risks and uncertainties could cause
actual results to differ materially from results expressed or implied by such
forward-looking statements. These forward-looking statements speak only as of
the date of this press release. Pharmacopeia undertakes no obligation to (and
expressly disclaims any such obligation to) publicly update or revise the
statements made herein or the risk factors that may relate thereto whether as a
result of new information, future events, or otherwise.

--------------------------------------------------------------
(1) Kohan, D. (editorial) Kidney International 1998;54:646-647
(2) Montanari et al. Hypertension 2002;39:715-720
(3) Bohlender et al. Hypertension 2002;39:992-997
(4) Barton et al. Hypertension 2006;48:834-837

PHARMACOPEIA, INC.
SELECTED FINANCIAL DATA
(Dollars in thousands, except share and per share data)
Consolidated Statements of Operations

For the Three Months For the Six Months
Ended June 30, Ended June 30,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------

Revenue
Net revenue $ 5,882 $ 4,957 $ 12,086 $ 11,306
---------- ---------- ---------- ----------

Operating Expenses
Collaborative research
and development
expense 7,215 5,685 15,135 10,922
Proprietary research
and development
expense 9,188 5,033 17,952 12,451
General and
administrative
expense 4,077 2,771 7,464 5,459
Restructuring expense 1,695 -- 1,695 --
---------- ---------- ---------- ----------
Total operating
expenses 22,175 13,489 42,246 28,832
---------- ---------- ---------- ----------
Operating loss (16,293) (8,532) (30,160) (17,526)
Other income 700 -- 700 94
Interest income 244 942 887 1,544
Interest and other
expense (103) (5) (203) (5)
(Increase) decrease in
warrant liability (145) 638 1,461 (1,068)
---------- ---------- ---------- ----------
Loss before income
taxes (15,597) (6,957) (27,315) (16,961)
Provision for (benefit
from) income taxes 2 (52) 2 (52)
---------- ---------- ---------- ----------
Net loss $ (15,599) $ (6,905) $ (27,317) $ (16,909)
========== ========== ========== ==========

Net loss per share:
- Basic and diluted $ (0.53) $ (0.26) $ (0.92) $ (0.63)
========== ========== ========== ==========

Weighted average number
of common stock shares
outstanding:
- Basic and diluted 29,688,920 26,336,997 29,688,000 26,716,303
========== ========== ========== ==========

PHARMACOPEIA, INC.
SELECTED FINANCIAL DATA
(Dollars in thousands)
Consolidated Balance Sheets

June 30, Dec. 31,
2008 2007
-------- --------

Cash, cash equivalents and marketable securities $ 44,440 $ 71,315
Other assets, net 19,238 19,083
-------- --------
Total assets $ 63,678 $ 90,398
======== ========

Current liabilities $ 35,960 $ 37,471
Long-term liabilities 30,127 29,843
Total stockholders' (deficit) equity (2,409) 23,084
-------- --------
Total liabilities and stockholders' (deficit)
equity $ 63,678 $ 90,398
======== ========
-0-
CONTACT: Pharmacopeia
Brian M. Posner, Executive Vice President and Chief
Financial Officer
(609) 452-3643
ir_pr@pcop.com