PRAECIS PHARMACEUTICALS INCORPORATED Reports Second Quarter 2006 Financial Results

PRAECIS PHARMACEUTICALS INCORPORATED (NASDAQ: PRCS)
today announced consolidated financial results for the three and six
months ended June 30, 2006.

   Second Quarter 2006 Results

   The Company's net loss for the three months ended June 30, 2006
was approximately $15,073,000, or $1.42 per diluted share, compared to
a net loss of approximately $42,370,000, or $4.04 per diluted share,
for the three months ended June 30, 2005.

   The decreased net loss for the second quarter of 2006 was due
primarily to approximately $32.2 million of restructuring and asset
impairment expenses that were recorded in the second quarter of the
prior year in connection with the Company's strategic restructuring.
In June 2006, the Company announced that it would cease its active
efforts to license or sell its Plenaxis(R) assets. As a result, the
Company has recorded various non-cash and other charges totaling
approximately $7.5 million. Approximately $5.5 million of these
charges were recorded in cost of goods sold for the three months ended
June 30, 2006, which consisted of a non-cash charge of approximately
$1.7 million for the remaining value of capitalized Plenaxis(R)
inventory, as well as a charge of approximately $3.8 million related
to the present value of the Company's remaining commitments under
certain of its Plenaxis(R) manufacturing and supply agreements. The
remaining $2.0 million of charges consisted primarily of a non-cash
impairment charge to write down the remaining value of capitalized
Plenaxis(R) equipment to its residual value. This amount was recorded
in restructuring and asset impairment expenses for the three months
ended June 30, 2006. The reduction in sales and marketing expense as
well as certain reductions in other expenses from the prior year
related principally to the voluntary discontinuation of promotional
activities for Plenaxis(R) in the United States and a significant
headcount reduction. Expenses incurred during the second quarter of
2006 related to the advancement of the Company's DirectSelect(TM) drug
discovery technology, clinical development of the Company's
investigational compound, PPI-2458, other research expenses, and
general and administrative expenses. Also included in expenses for the
three months ended June 30, 2006 was approximately $970,000 of
incremental non-cash compensation expense associated with the
Company's adoption of Financial Accounting Standards Board Statement
No. 123R, Share-Based Payment (SFAS No. 123R). Of this amount,
approximately $720,000 of compensation expense associated with
equity-based compensation plans was allocated to research and
development expense, and approximately $250,000 of such compensation
expense was allocated to general and administrative expense.

   For the six months ended June 30, 2006, the net loss was
approximately $22,125,000, or $2.10 per diluted share, compared to a
net loss of approximately $54,715,000, or $5.22 per diluted share, for
the six months ended June 30, 2005. The reduced net loss for the six
months ended June 30, 2006 was principally the result of the $32.2
million of restructuring and asset impairment expenses recorded during
the second quarter of the prior year, as discussed above. At June 30,
2006, the Company had cash and cash equivalents of $46,170,000,
compared to cash, cash equivalents and marketable securities of
approximately $62,580,000 at December 31, 2005.

   Commenting on the activities for the quarter, Kevin F. McLaughlin,
PRAECIS' President and Chief Executive Officer stated, "During the
second quarter we continued moving our PPI-2458 program through
clinical development, advancing our DirectSelect(TM) internal and
external discovery programs, as well as advancing other research
programs. As we announced in June, we have embarked on a process of
exploring strategic options which may be available to the Company with
a goal of enhancing stockholder value. These options include
principally a financing transaction or a business combination with a
public or private company. As we indicated when we announced this
process, we do not intend to disclose developments or anticipated
timing regarding these efforts unless and until the Board of Directors
has approved a specific transaction.

   "PPI-2458 is currently progressing through a phase 1 clinical
trial in non-Hodgkin's lymphoma and solid tumors, and we are
encouraged by the progress of this program," stated Mr. McLaughlin.
"As previously announced, we intend to present interim data from this
clinical trial during the fourth quarter. As we continue to learn
additional information from our phase 1 safety investigation of this
compound, we are carefully evaluating the next steps for its clinical
development in oncology, as well as for initiating clinical studies of
this compound in rheumatoid arthritis. We are also continuing to
advance our DirectSelect(TM) technology and are conducting both
internal and external discovery programs utilizing this novel
technology. We are pleased with our progress to date under our
existing pilot study agreements. We are also applying DirectSelect(TM)
to internal targets we believe to be of interest to potential
pharmaceutical partners and accordingly, continue to initiate and
advance discussions with other potential partners regarding this
technology and those targets."

   There will be a conference call to discuss this press release
today beginning at 9:00 a.m. (EDT). This call will be broadcast live
over the Internet at www.praecis.com under "Investor Relations." A
telephonic replay of this call will be available beginning at 12:00
Noon (EDT), until midnight Friday, August 11, 2006, by calling
888-203-1112 (domestic toll-free) or 719-457-0820, and entering the
passcode 4327855. This press release, including the financial results
relating to PRAECIS' second quarter ended June 30, 2006, is also
available on PRAECIS' web site under "News Center."

   The Company is planning to report third quarter 2006 results on
November 3, 2006. For information regarding live webcasts and
investment community conference calls related to third quarter 2006
results, please refer to www.praecis.com approximately one week prior
to the financial reporting release date.

   About PRAECIS

   PRAECIS PHARMACEUTICALS INCORPORATED is a biopharmaceutical
company focused on the discovery and development of novel compounds
that have the potential to address unmet medical needs or improve
existing therapies. PRAECIS has a novel MetAP-2 inhibitor, PPI-2458,
in clinical development for cancer indications, including
non-Hodgkin's lymphoma and solid tumors, as well as an innovative drug
discovery technology, DirectSelect(TM), which enables the generation
and practical use of ultra-large libraries for the discovery of orally
active compounds for drug development.

   This news release contains forward-looking statements, including
statements regarding the Company's plans to actively explore strategic
options which may be available to the Company, its plans for the
continued clinical development of, and the potential timing of
disclosure of clinical trial results related to, PPI-2458, and seeking
partnerships relating to, as well as the internal use in certain
programs of, the Company's DirectSelect(TM) technology. These
statements are based on the Company's current beliefs and expectations
as to future outcomes and are not guarantees of such outcomes or of
future performance. These statements are subject to numerous risks,
uncertainties and assumptions that could cause actual events and
results to differ from those expected or anticipated, including, but
not limited to, the Company's ability to successfully consummate, in a
timely manner and on favorable terms, a financing or other strategic
transaction, the Company's ability to continue to manage operating
expenses and to retain key employees, unexpected expenditures, the
Company's ability to continue development of and successfully partner
its DirectSelect(TM) technology and PPI-2458, the Company's ability to
successfully perform under its DirectSelect(TM) pilot study
agreements, unexpected results in ongoing and future clinical or
preclinical trials, and the need for additional research and testing,
including as a result of unanticipated determinations by regulatory
authorities, as well as the risks set forth from time to time in the
Company's filings with the Securities and Exchange Commission,
including but not limited to the various risks discussed in the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2006. The Company undertakes no obligation to update any
forward-looking statement made in this press release to reflect new
information, events or circumstances after the date of this release.

   Plenaxis(R) is a registered trademark of PRAECIS PHARMACEUTICALS
INCORPORATED.
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                 PRAECIS PHARMACEUTICALS INCORPORATED
            Condensed Consolidated Statements of Operations
                 (in thousands, except per share data)
                              (unaudited)

                               Three Months Ended    Six Months Ended
                                     June 30,            June 30,
                               ------------------- -------------------
                                  2005      2006      2005      2006
                                --------  --------  --------  --------

Revenues:
    Product sales              $    350  $     73  $  1,154  $    209
    Licensing and other
     revenues                        42         -       119        35
                                --------  --------  --------  --------
        Total revenues              392        73     1,273       244

Costs and expenses:
    Cost of goods sold            3,611     5,513     3,792     5,570
    Research and development      6,276     6,130    13,559    12,547
    Sales and marketing           2,128         -     5,785         -
    General and administrative    1,989     2,028     3,967     3,873
    Restructuring and asset
     impairment                  28,680     2,075    28,680     1,578
                                --------  --------  --------  --------
        Total costs and
         expenses                42,684    15,746    55,783    23,568
                                --------  --------  --------  --------

Operating loss                  (42,292)  (15,673)  (54,510)  (23,324)

Interest (expense) income, net      (78)      600      (205)    1,199
                                --------  --------  --------  --------

Net loss                       $(42,370) $(15,073) $(54,715) $(22,125)
                                ========  ========  ========  ========

Basic and diluted net loss per
 common share                  $  (4.04) $  (1.42) $  (5.22) $  (2.10)
                                ========  ========  ========  ========

Weighted average number of
 basic and diluted common
 shares outstanding              10,485    10,586    10,485    10,546



                 PRAECIS PHARMACEUTICALS INCORPORATED
                 Condensed Consolidated Balance Sheets
                            (in thousands)
                              (unaudited)


                                             December 31,    June 30,
                                                 2005         2006
                                             ------------ ------------

Cash and cash equivalents                    $    57,088  $    46,170
Marketable securities                              5,492            -
Accounts receivable and other current assets       1,080        1,173
Net fixed assets                                   3,559        1,775
Inventory and other long-term assets               2,325          793
                                              -----------  -----------

     Total assets                            $    69,544  $    49,911
                                              ===========  ===========

Current liabilities                          $     9,579  $     9,200
Long-term liabilities                              8,802        9,164
Total stockholders' equity                        51,163       31,547
                                              -----------  -----------

     Total liabilities and stockholders'
      equity                                 $    69,544  $    49,911
                                              ===========  ===========
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