Exhibit
10.1


NEOPHARM,
Inc. Announces Strategic Reassessment and Reorganization


Waukegan,
IL — April 19, 2007 - NEOPHARM, Inc. (NASDAQ: NEOL) announced
today its near-term reorganization strategy to best position the Company for
success while reducing its current cash consumption. These changes will allow
NEOPHARM to focus on evaluating our current portfolio and move appropriate
projects forward.


Near-term
Reorganization Strategy


“In my first three
weeks at NEOPHARM, I have initiated an extensive evaluation of our current
programs and long-term opportunities. This review is well underway and our
management team has made significant progress in identifying several key areas
to eliminate redundancies in our current operations,” commented Laurence Birch,
President and Chief Executive Officer of NEOPHARM. “Our long-term success
depends on our ability to capitalize on the intellectual property the Company
has developed to date. As such, in the coming months we will be completing a
comprehensive strategic review of our entire portfolio of projects and products
including Cintredekin Besudotox and our Liposome products in an effort to
establish a comprehensive long-term plan with appropriate milestones. We expect
to discuss this strategy in greater detail with our stakeholders during the
coming weeks and months.”


Dr. John Kapoor,
Chairman of the Board, NEOPHARM commented, “I believe the actions the Company
has taken will position it to thoughtfully assess it opportunities and maximize
the value of its intellectual property.”


Management
Realignment


Dr. Aquilur
Rahman, one of NEOPHARM’s co-founders, has agreed to serve as Chief Scientific
Officer, Emeritus. In this role, Dr. Rahman will work closely with the
management team and outside advisors to identify opportunities to bring the
Company’s products to market and evaluate new opportunities to add to its
pipeline.


Also, as part of
this realignment, Jeffrey W. Sherman, MD, FACP will be stepping down as Chief
Medical Officer and Executive Vice President of NEOPHARM to pursue other
opportunities within the pharmaceutical industry. Dr. Sherman has made
significant contributions to many of NEOPHARM’s leading projects and will
remain with the Company through a transitional period until a suitable
replacement is identified.


Additionally,
given the recent announcement outlining the FDA’s request for a second Phase 3
trial of Cintredekin Besudotox, and the Company’s on-going evaluation of its
options for this drug candidate, NEOPHARM has announced that Timothy P.
Walbert, Executive Vice President, Commercial Operations, will also be leaving
the Company. Mr. Walbert has brought a wealth of experience to this role;
however, Mr. Walbert and the Company agreed that after a suitable transition
period this position is not essential to the Company’s current operations.


Mr. Birch added, “I
am very pleased that Dr. Rahman has agreed to work closely with me to evaluate
and advance our pipeline. Also, I would like to thank both Jeff and Tim for
their ongoing commitment and hard work to move our drug product candidates
ahead, and appreciate their willingness to assist the Company during this
transition period.”


In related news,
the Company reported that the Board of Directors has appointed Mr. Birch to
serve as Acting Chief Financial Officer while the search for a new CFO
continues.











Workforce
Reduction; Impact on Cost Structure


As part of its
reorganization strategy, the Company has also reduced its head count by fifteen
(15) full time positions, or approximately 42% of its workforce.


The Company believes
that the foregoing actions will have the following impact:


·                  The
costs associated with termination benefits from its workforce reduction are
estimated to be approximately $600,000.


·                  Reductions
in other General and Administrative expenditures are projected to result in
more than $2 million in savings over the prior year.


·                  Total
cost reductions implemented and planned are expected to result in annualized
cash consumption of under $7 million before project costs.


·                  Depending
on the strategic decisions the Company makes regarding its investments in its
product portfolio, these changes are intended to reduce the Company’s cash
consumption for 2007 and 2008 and allow the Company to continue operations into
2009 before requiring additional financing.


About
NEOPHARM, Inc.


NeoPharm,
Inc., based in Waukegan, Illinois, is a publicly traded biopharmaceutical
company dedicated to the research, development and commercialization of new and
innovative cancer drugs for therapeutic applications. Additional information,
including ongoing clinical trials, can be obtained by visiting NeoPharm’s Web
site at www.neopharm.com.


Forward
Looking Statements - This press release contains “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. The Company has tried to identify such
forward-looking statements by use of such words as “expects,” “intends,” “projects,”
“hopes,” “anticipates,” “believes,” “could,” “may,” “evidences” and “estimates,”
and other similar expressions, but these words are not the exclusive means of
identifying such statements. Such statements include, but are not limited to,
any statements relating to the Company’s financial projections, projections
regarding cash used in operations, costs associated with termination benefits,
projected cost savings, and any other statements that are not historical facts.
Such statements involve risks and uncertainties, including, but not limited to,
the Company’s ability to conserve its cash resources, to implement reductions
in general and administrative expenditures, to successfully recruit senior
management to fill the Company’s open financial and management positions, risks
and uncertainties relating to difficulties or delays that may arise in the
development, testing, regulatory approval, production, and marketing of the
Company’s drug and non-drug compounds, including, but not limited to,
Cintredekin Besudotox, with a reduced work force, the Company’s possible
reduction in funding of certain of its development projects in order to
conserve its cash resources, the ability of the Company to procure additional
future sources of financing, and other risks detailed from time to time in
filings the Company makes with the Securities and Exchange Commission including
its annual report on Form 10-K for the calendar year ended December 31, 2006.
Such statements are based on management’s current expectations, but actual
results may differ materially due to various factors, including those risks and
uncertainties mentioned or referred to in this press release. Accordingly, you
should not rely on these forward-looking statements as a prediction of actual
future results.


CONTACT: NEOPHARM, Inc.


Laurence
Birch, President and Chief Executive Officer


lbirch@neopharm.com


847-406-1781


SOURCE: NeoPharm,
Inc.