Avalon Pharmaceuticals Receives NASDAQ Deficiency Notice

  
    
  
  
    
      Avalon Pharmaceuticals, Inc. (Nasdaq:AVRX), today announced that on 
      November 20, 2008 it received a Deficiency Notice from The NASDAQ Stock 
      Market, LLC notifying the Company that it is not in compliance with 
      NASDAQ Marketplace Rule 4450(a)(3) because the Company’s stockholders’ 
      equity, as reported in the Company’s Quarterly Report on Form 10-Q for 
      the period ended September 30, 2008, did not meet the minimum of $10 
      million required for continued listing on The NASDAQ Global Market. This 
      notification has no immediate effect on the NASDAQ listing or trading of 
      the Company’s common stock.
    
    
      The NASDAQ staff is reviewing the Company’s eligibility for continued 
      listing on The NASDAQ Global Market and has asked the Company to provide 
      a specific plan to achieve and sustain compliance with all of the NASDAQ 
      Global Market listing requirements, including a time frame for 
      completion of the plan. The Company is in the process of preparing a 
      response to NASDAQ’s request for a plan.
    
    
      In the event the Company receives notice that its common stock is being 
      delisted from The NASDAQ Global Market, the NASDAQ Marketplace Rules 
      permit the Company to appeal the delisting to a NASDAQ Listing 
      Qualifications Panel. Alternatively, NASDAQ may permit the Company to 
      transfer its common stock to The NASDAQ Capital Market if it satisfies 
      the requirements for inclusion on that market.
    
    
      About Avalon Pharmaceuticals
    
    
      Avalon is a biopharmaceutical company focused on the discovery, 
      development and commercialization of first-in-class cancer therapeutics.
    
    
      Forward Looking Statements
    
    
      This announcement may contain forward-looking statements that involve 
      risks and uncertainties. Such statements are based on certain 
      assumptions and actual results could differ materially from those 
      currently anticipated as a result of a number of factors, risks and 
      uncertainties. The information in this Release should be read in 
      conjunction with the Risk Factors set forth in our 2007 Annual Report on 
      Form 10-K and updates contained in subsequent filings Avalon makes with 
      the SEC.