ZIOPHARM Announces Second Quarter Financial Results and Key Developments Highlights Include Completion of Enrollment in PICASSO 3 Trial for Soft Tissue Sarcoma and Initiation of MATISSE Study for Small Cell Lung Cancer

ZIOPHARM Announces Second Quarter Financial

Results and Key Developments

Highlights Include Completion of Enrollment

in PICASSO 3 Trial for Soft Tissue Sarcoma and Initiation of MATISSE Study for Small Cell Lung Cancer

NEW YORK, NY - August 2, 2012

- ZIOPHARM Oncology, Inc. (Nasdaq: ZIOP) announced today its financial results for the second quarter ended June 30,

2012, and provided an update on the Company's development activities.

The Company's cash used in operations

during the second quarter was $16.8 million, an increase of $11.0 million from $5.8 million for the same period of 2011. The increase

in spending is attributable to research and development activities for the palifosfamide pivotal Phase 3 trial (PICASSO 3) in first-line

metastatic soft tissue sarcoma (STS) which completed enrollment during the quarter, start-up activities for the Phase 3 trial (MATISSE)

in small cell lung cancer (SCLC) that was initiated during the quarter, and expanding development activities supporting the Company's

palifosfamide and DNA-based therapeutics programs.

The Company reported a GAAP net loss of

$23.6 million for the second quarter of 2012, or $(0.30) per share, compared to a GAAP net loss of $10.7 million, or $(0.16) per

share, in the first quarter of 2011. Excluding a non-cash expense of $0.7 million attributable to the change in liability-classified

warrants, Non-GAAP1 net loss was $23.0 million, or $(0.29) per share, for the second quarter ended June 30, 2012. In

comparison, Non-GAAP1net loss for the second quarter of 2011 was $12.8 million, or $(0.19) per share, which excludes

non-cash income of $2.1 million attributable to the change in liability-classified warrants.

The Company ended the second quarter of

2012 with cash and cash equivalents of approximately $110.4 million and expects its existing cash resources to support operations

into the second half of 2013.

Palifosfamide (ZIO-201):

the second quarter of 2012, ZIOPHARM made substantial progress in its palifosfamide programs. The Company completed enrollment

in the pivotal Phase 3 trial (PICASSO 3) for metastatic first-line STS and, in June, initiated a pivotal Phase 3 multi-center,

open-label, adaptive, randomized study (MATISSE) of palifosfamide for the treatment of SCLC.The

MATISSE study, which is being conducted at centers in North America, Europe, Australia and Asia, includes a prospectively planned

opportunity for modification of the study's sample size designed to maintain adequate power across a range of significant

and meaningful outcomes, while keeping time and resources spent conducting the trial to a minimum.

The Company also announced recently that,

after completing a planned, pre-specified futility analysis, the Independent Data Monitoring Committee for the PICASSO 3 trial

has recommended that the trial proceed as designed and conducted. By design, there is no interim efficacy analysis. Outcome in

progression-free survival, the study's primary endpoint for accelerated approval, is anticipated in the fourth quarter of

DNA Therapeutics (Synthetic Biology):

ZIOPHARM continues to advance its DNA therapeutics

platform, with special focus on its interleukin-12 (IL-12) DNA program. During the quarter, the Company hosted a research and development

day where development plans for this technology and Ad IL-12, ZIOPHARM's lead synthetic biology clinical candidate, currently

in a Phase 1b trial for metastatic melanoma, were outlined. Upon successful completion of this study, the Company expects to initiate

a Phase 2 study of Ad IL-12 in melanoma. ZIOPHARM continues to explore the suitability of Ad IL-12 in other indications, including

breast cancer and head and neck cancer, in addition to leveraging clinical evidence from this program to advance additional candidates,

currently in the discovery and research stage, toward the clinic.

About ZIOPHARM Oncology, Inc.:

ZIOPHARM Oncology is a biopharmaceutical

company focused on the development and commercialization of new cancer therapies. The Company's clinical programs include:

Palifosfamide (ZIO-201), a novel DNA-targeted

cancer treatment that bypasses drug resistance mediated by ALDH (aldehyde dehydrogenase), an enzyme associated with cancer stem

cells, and has a favorable toxicity profile. Intravenous palifosfamide is currently being studied in a randomized, double-blinded,

placebo-controlled Phase 3 trial (PICASSO 3) for the treatment of first-line metastatic soft tissue sarcoma and is also in a pivotal

Phase 3 trial (MATISSE) for first-line metastatic small cell lung cancer. Additionally, the Company is developing an oral capsule

form of palifosfamide.

IL-12 DNA, a novel DNA therapeutic that

is delivered to the patient's tumor and expresses interleukin-12, a protein that controls anti-cancer immune responses. IL-12

DNA is currently in two Phase 1b studies, with plans to move into Phase 2 studies. ZIOPHARM's DNA therapeutics are being

developed in partnership with Intrexon Corporation through a revolutionary synthetic biology platform that allows for targeted,

controlled production of therapies in humans with a biologic on/off switch (the RheoSwitch Therapeutic System ).

Preclinical and discovery work with multiple therapeutic approaches, such as antibodies, immunotoxins and protein decoys, is expected

to result in multiple clinical candidates in the next 12 to 24 months.

Indibulin (ZIO-301) is a novel, tubulin

binding agent that is expected to have several potential benefits, including oral dosing, application in multi-drug resistant tumors,

no neuropathy and a tolerable toxicity profile. It is currently being studied in a Phase 1/2 trial in metastatic breast cancer.

Darinaparsin (ZIO-101) is a novel mitochondrial-

and hedgehog-targeted agent (organic arsenic) currently in ongoing studies with Solasia Pharma K.K.

ZIOPHARM's operations are located

in Boston, MA and New York City. Further information about ZIOPHARM may be found at www.ziopharm.com.

Forward-Looking Safe Harbor Statement:

This press release contains certain forward-looking

information about ZIOPHARM Oncology that is intended to be covered by the safe harbor for "forward-looking statements"

provided by the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are statements that are

not historical facts. Words such as "expect(s)," "feel(s)," "believe(s)," "will,"

"may," "anticipate(s)" and similar expressions are intended to identify forward-looking statements. These

statements include, but are not limited to, statements regarding our ability to successfully develop and commercialize our therapeutic

products; our ability to expand our long-term business opportunities; financial projections and estimates and their underlying

assumptions; and future performance. All of such statements are subject to certain risks and uncertainties, many of which are difficult

to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed

in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are

not limited to: whether Palifosfamide, Darinaparsin, Indibulin, or any of our other therapeutic products will advance further in

the clinical trials process and whether and when, if at all, they will receive final approval from the U.S. Food and Drug Administration

or equivalent foreign regulatory agencies and for which indications; whether Palifosfamide, Darinaparsin, Indibulin, and our other

therapeutic products will be successfully marketed if approved; whether our DNA-based biotherapeutics discovery and development

efforts will be successful; our ability to achieve the results contemplated by our collaboration agreements; the strength and enforceability

of our intellectual property rights; competition from pharmaceutical and biotechnology companies; the development of and our ability

to take advantage of the market for DNA-based biotherapeutics; our ability to raise additional capital to fund our operations on

terms acceptable to us; general economic conditions; and the other risk factors contained in our periodic and interim SEC reports

filed from time to time with the Securities and Exchange Commission, including but not limited to our Annual Report on Form 10-K

for the fiscal year ended December 31, 2011, and our Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012.

Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and

we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after

the date hereof, or to reflect the occurrence of or non-occurrence of any events.

1Non-GAAP net loss is calculated as GAAP net loss less the expense (or plus

the income) associated with the change in fair value of the liability-classified warrants. Non-GAAP net loss per share is calculated

by dividing the Non-GAAP net loss by the weighted average common shares outstanding.

ZIOPHARM Oncology, Inc.

Condensed Statements of Operations

(in thousands except share and per share

ZIOPHARM Oncology, Inc.

ZIOPHARM Oncology, Inc.

David Schull or Lena Evans