YM BIOSCIENCES REPORTS FISCAL YEAR END 2008 OPERATIONAL AND FINANCIAL RESULTS



    MISSISSAUGA, ON, Sept. 19 /CNW/ - YM BioSciences Inc. (AMEX:   YMI, TSX:
YM, AIM: YMBA), an oncology company that identifies, develops and
commercializes differentiated products for patients worldwide, today reported
operational and financial results for its fiscal 2008 year end, ended June 30,
2008.
    "The critical highlight of the year was the confirmation that nimotuzumab
differs mechanistically from the currently marketed EGFR-targeting monoclonal
antibodies, cetuximab and panitumumab. This mechanistic information supported
by recent clinical data, provides us with a clear path-to-market for
nimotuzumab," said David Allan, Chairman and CEO of YM BioSciences. "Recent
work has demonstrated that, in circumstances where EGFR-expression is moderate
to high, or where its density may be enhanced, as in radiation-containing
regimens, our antibody is effective without the debilitating and dangerous
Grade III/IV side-effects associated with cetuximab treatment. Nimotuzumab's
path-to-market in North America is in two indications in which there is an
unmet medical need - palliative non-small-cell lung cancer and in brain
metastases - for both of which indications we have supportive clinical
evidence, patient populations are substantial and the markets uncrowded. Our
licensees in the rest of the world have defined strategies and, in Europe, the
drug is in a number of late-stage, registration trials."


    Nimotuzumab highlights

    Nimotuzumab is being developed to compete as best-in-class against the
currently marketed EGFR-targeting drugs. This drug has displayed efficacy in
numerous clinical trials with anti-cancer activity that rivals the other
EGFR-targeting antibody drugs. However, in none of its trials to date, to YM's
knowledge, have any of the patients treated with nimotuzumab had Grade III/IV
rash, a severe and dose-limiting side-effect observed in all of the other
antibodies and small molecules targeting the EGF tyrosine kinase signaling
pathway. Reports of any severe incidents of the other side-effects that are
typical of EGFR-targeting molecules have been rare and, unlike cetuximab,
nimotuzumab patients do not have to be pre-medicated.
    Results of the first trial of nimotuzumab in combination with irinotecan
in irinotecan-refractory colorectal cancer patients were recently reported
with the disease control rate (DCR) from the addition of nimotuzumab being
similar to that reported for cetuximab in similar trials. The nimotuzumab
treated patients exhibited no debilitating rash and the cetuximab patients
demonstrated a higher response rate. Since DCR has been established as a
significantly more powerful predictor of survival than RR, the similar overall
survival times seen with these two antibodies in this condition are,
therefore, not surprising.
    YM and its direct licensees have studies underway and others in planning
that investigate nimotuzumab in settings where regimens that stimulate EGFR
activated expression are used, such as radiation or chemoradiation:

    
    -   In Europe, data from the fully recruited Phase III trial of
        nimotuzumab combined with radiation therapy in the first-line
        treatment for children with inoperable brain cancer conducted by our
        licensee, Oncoscience AG, could be submitted to the EMEA for
        marketing approval during calendar 2009, as a Type II Variation
        should the submission that has been made to EMEA in late 2007 be
        accepted.

    -   Oncoscience also continues to enrol patients in a Phase III study in
        adult glioma treated with temozolomide and radiation therapy
        +/- nimotuzumab.

    During fiscal 2008, YM and its licensees achieved the following:
    -   YM received clearance from the FDA to initiate a clinical trial
        evaluating nimotuzumab as a monotherapy in children with diffuse,
        intrinsic pontine glioma (DIPG), an inoperable, treatment-resistant
        brain cancer. This was followed the granting of a Special License to
        YM USA by the US Treasury's Office of Foreign Assets Control (OFAC).
        In February 2008, YM enrolled the first patient in the 44-patient
        single-arm trial, initially limited by OFAC to six leading
        US pediatric clinical centers, but now unlimited, and at two Canadian
        centers. Recruitment is expected to be completed in late calendar
        2009. Nimotuzumab is also available to patients in the US under an
        Expanded Access Program.
    -   In Japan, YM licensee, Daiichi-Sankyo Co., Ltd., completed
        preliminary safety trials with nimotuzumab and has advised that it
        plans to evaluate the drug in more advanced trials.
    -   In Europe, Oncoscience continued to enrol patients in a
        Phase IIb/IIIa randomized trial in advanced pancreatic cancer that
        compares gemcitabine alone to gemcitabine plus nimotuzumab, designed
        to be supportive of registration. In June 2008 nimotuzumab was
        accorded Orphan Drug Designation for pancreatic cancer in Europe.
    -   In August 2008, YM's licensee in Singapore/Indonesia,
        Innogene Kalbiotech/P.T. Kalbe Farma (IGK) received approval for
        nimotuzumab for marketing in the Philippines and, in addition, has
        initiated a Special Access Program in IGK's substantial markets where
        a broad development program is underway. IGK is the sponsor for a
        Phase II trial in locally advanced head and neck cancer (radiation +
        nimotuzumab) being conducted by the internationally recognized
        National Cancer Center of Singapore.
    -   YM presented data at ASCO 2008 from the Canadian arm of a fully
        recruited Phase I palliative trial in non-small-cell lung cancer
        (NSCLC) being conducted in Canada by YM and in Korea by
        Kuhnil Pharmaceutical Co. suggesting that the combination of
        nimotuzumab with radiation has the potential to provide an important
        survival advantage to patients over radiation alone in the curative
        setting.
    -   Subsequent to the end of fiscal 2008, the Company reported
        preliminary results obtained from its open-label, Phase II study of
        nimotuzumab in patients with irinotecan-refractory, metastatic
        colorectal cancer. The overall survival and disease control rate for
        the 58 evaluable patients receiving nimotuzumab compared well with
        published results in similar patient populations treated with
        cetuximab. However, as with all previous trials, nimotuzumab
        continued to display a safety profile unequalled in its class.
    

    AeroLEF(R)

    AeroLEF(R) is a novel approach to the treatment of pain with an approved
drug which positions this product within a precedent context for its
prospective approval. The intellectual property relates to the composition of
free and liposome-encapsulated opioid - in this case fentanyl - which is
inhaled through a widely-available, FDA-approved nebulizer. The inhalation of
the free fentanyl produces very rapid onset of pain relief and the liposome
encapsulated proportion results in an extended duration of analgesia, thus
differentiating AeroLEF(R) from other fentanyl products in the marketplace.
AeroLEF(R) has successfully completed a randomized Phase IIb trial and is now
positioned for later-stage development.

    During fiscal 2008:
    
    -   In May 2008, three posters were presented at the Annual Meeting of
        the American Pain Society reporting results from previous clinical
        trials including a randomized, placebo-controlled Phase IIb trial
        enrolling opioid-naive patients with postoperative pain following
        orthopedic surgery, where AeroLEF(R) demonstrated a statistically
        significant difference in pain relief and pain intensity to placebo
        (p=0.0194). All the posters referred to both the safety
        and efficacy of the product.
    -   In June 2007, the FDA cleared the first Phase II protocol to proceed
        with an AeroLEF(R) trial in the US. An amended protocol, submitted in
        2008, has since been cleared.
    -   YM put in place a strengthened team with extensive experience
        developing fentanyl-based pain products, lead by Dr. Ali Raza,
        appointed President of the AeroLEF(R) division and supported by
        Elizabeth Jenkins, a UK-based regulatory expert. Under Dr. Raza's
        leadership, the Company plans to meet with European regulators in the
        coming months to solidify trial designs for registration of this
        product.
    

    Financial Results (CDN dollars)

    Total revenue for the fiscal year ended June 30, 2008 was $7.4 million
compared with $7.6 million for fiscal 2007. Total revenue for the fourth
quarter of fiscal 2008 was $2.0 million compared with $1.9 million for the
fourth quarter of fiscal 2007. Revenue from out-licensing was $4.9 million for
fiscal 2008 compared with $4.4 million for fiscal 2007. The most significant
agreement, signed with Daiichi Pharmaceutical Co., Ltd. in July 2006, licensed
the commercial rights for nimotuzumab for Japan and included a non-refundable
up-front payment from Daiichi to the Company of $16.2 million. This initial
license fee has been recorded as deferred revenue and is being recognized over
a period of four years. Interest income for fiscal 2008 was $2.6 million
compared with $3.2 million for fiscal 2007. Interest income is decreasing as
the Company draws on its cash balances to fund its operations.
    Total operating expenditures for the fiscal year ended June 30, 2008 were
$22.5 million compared to $37.6 million for the fiscal year ended June 30,
2007. Total operating expenditures for the fourth quarter ended June 30, 2008
were $4.9 million compared to $6.5 million for the same quarter in 2007.
General and administrative expenses decreased to $6.8 million in fiscal 2008
compared to $7.0 million in fiscal 2007. Licensing and product development
expenses for the year ended June 30, 2008 decreased by $13.1 million compared
to the year ended June 30, 2007. The large decreases are mainly the result of
reduced development activity for tesmilifene, for which a Phase III trial was
terminated in January 2007. Costs associated with development activities for
nimotuzumab decreased to $5.2 million for the fiscal year ended June 30, 2008
compared to $5.9 million for the year ended June 30, 2007. Costs associated
with development activities for AeroLEF(R) decreased to $2.0 million for the
fiscal year ended June 30, 2008 compared to $2.9 million for the year ended
June 30, 2007. Costs related to development activities for tesmilifene for the
year ended June, 2008 decreased to $1.3 million compared to $7.5 million for
the comparable period last year.
    In addition to the specific licensing and product development costs,
there was a significant decrease in licensing and product development salary
expenses. Salary expenses, including termination costs, were $2.0 million less
in fiscal 2008 compared to fiscal 2007 as the Company reduced development
staff following the termination of the Phase III DEC study for tesmilifene in
February 2007.
    Net losses for the fiscal year and fourth quarter ended June 30, 2008
were $14.9 million ($0.27 per share) and $3.0 million ($0.05 per share)
respectively compared to $31.7 million ($0.57 per share) and $4.7 million
($0.09 per share) for the same periods last year.
    As at June 30, 2008 the Company had cash and cash equivalents and
short-term deposits totaling $58.1 million and payables and accrued
liabilities totaling $2.0 million compared to $75.6 million and $3.3 million
respectively at June 30, 2007.
    As at June 30, 2008 the Company had 58,216,309 common shares outstanding,
of which 2,380,953 common shares are held in escrow for contingent additional
payment related to the acquisition of Delex Therapeutics Inc.,
5,709,765 warrants, and 5,633,102 options.
    The Company's annual financial statements and management's discussion and
analysis will be available on www.sedar.com, www.edgar.com and at
www.ymbiosciences.com.

    About YM BioSciences

    YM BioSciences Inc. is a company that identifies, develops and
commercializes differentiated products principally in the area of oncology for
patients worldwide. The Company is developing nimotuzumab, a humanized
monoclonal antibody, and AeroLEF(R), a proprietary, inhaled-delivery
composition of free and liposome-encapsulated fentanyl. Nimotuzumab is in
development targeting multiple tumour types in combination with radiation,
chemoradiation and chemotherapy. The drug, which is approved for marketing in
eight countries, is significantly differentiated from all other currently
marketed EGFR-targeting agents because of a remarkably benign side-effect
profile. In approximately 3,000 patients treated, to date, worldwide no Grade
III/IV rash has been reported and reports of any of the other side-effects
that are typical of EGFR-targeting molecules have been rare. AeroLEF(R) is in
development for the treatment of moderate to severe pain, including cancer
pain. The product completed a randomized trial in 2007 and is being prepared
for late-stage development internationally.

    This press release may contain forward-looking statements, which reflect
the Company's current expectation regarding future events. These
forward-looking statements involve risks and uncertainties that may cause
actual results, events or developments to be materially different from any
future results, events or developments expressed or implied by such
forward-looking statements. Such factors include, but are not limited to,
changing market conditions, the successful and timely completion of clinical
studies, the establishment of corporate alliances, the impact of competitive
products and pricing, new product development, uncertainties related to the
regulatory approval process and other risks detailed from time to time in the
Company's ongoing quarterly and annual reporting. Certain of the assumptions
made in preparing forward-looking statements include but are not limited to
the following: that nimotuzumab will continue to demonstrate a competitive
safety profile in ongoing and future clinical trials; that AeroLEF(R) will
continue to generate positive efficacy and safety data in future clinical
trials; and that YM and its various partners will complete their respective
clinical trials within the timelines communicated in this release. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.


    

    YM BIOSCIENCES INC.
    Consolidated Balance Sheets
    (Amounts in Canadian dollars, unless otherwise noted)

    June 30, 2008 and 2007

    -------------------------------------------------------------------------
                                                         2008           2007
    -------------------------------------------------------------------------

    Assets

    Current assets:
      Cash and cash equivalents                 $   3,119,189  $   5,847,351
      Short-term deposits                          54,981,737     69,724,438
      Accounts receivable                             403,371        370,011
      Prepaid expenses                                375,133        347,010
      -----------------------------------------------------------------------
                                                   58,879,430     76,288,810

    Property and equipment                            128,400        325,040

    Intangible assets                               4,065,409      5,125,950

    -------------------------------------------------------------------------
                                                $  63,073,239  $  81,739,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable                          $     307,588  $   1,169,211
      Accrued liabilities                           1,715,024      2,103,755
      Deferred revenue                              4,623,340      4,702,132
      -----------------------------------------------------------------------
                                                    6,645,952      7,975,098

    Deferred revenue                                4,414,256      8,929,900

    Shareholders' equity:
      Share capital                               172,921,153    172,921,153
      Share purchase warrants                       3,150,539      4,553,308
      Contributed surplus                           9,123,824      5,657,082
      Deficit                                    (133,182,485)  (118,296,741)
      -----------------------------------------------------------------------
                                                   52,013,031     64,834,802

    Basis of presentation
    Commitments

    -------------------------------------------------------------------------
                                                $  63,073,239  $  81,739,800
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    Consolidated Statements of Operations and Comprehensive Loss and Deficit
    (Amounts in Canadian dollars, unless otherwise noted)

    -------------------------------------------------------------------------
                                                 Years ended June 30,
                                          2008           2007           2006
    -------------------------------------------------------------------------

    Out-licensing revenue        $   4,859,085  $   4,407,890  $   1,151,135
    Interest income                  2,584,080      3,239,540      1,397,558
    -------------------------------------------------------------------------
                                     7,443,165      7,647,430      2,548,693

    Expenses:
      General and administrative     6,831,955      6,978,336      7,951,470
      Licensing and product
       development                  15,631,550     28,758,469     20,188,577
      Impairment of intangible
       assets                                -      1,829,538              -
      -----------------------------------------------------------------------
                                    22,463,505     37,566,343     28,140,047
    -------------------------------------------------------------------------

    Loss before the undernoted     (15,020,340)   (29,918,913)   (25,591,354)

    Gain (loss) on foreign
     exchange                           32,463       (142,552)      (220,630)

    Realized gain on short-term
     deposits                          126,588              -              -

    Unrealized gain on short-term
     deposits                           45,688              -              -

    Loss on marketable securities            -              -         (2,623)

    Loss on disposal of property
     and equipment                     (70,143)             -              -
    -------------------------------------------------------------------------

    Loss before income taxes       (14,885,744)   (30,061,465)   (25,814,607)

    Income taxes                             -      1,668,775              -
    -------------------------------------------------------------------------

    Loss and comprehensive loss
     for the year                  (14,885,744)   (31,730,240)   (25,814,607)

    Deficit, beginning of year    (118,296,741)   (86,566,501)   (60,751,894)

    -------------------------------------------------------------------------
    Deficit, end of year         $(133,182,485) $(118,296,741) $ (86,566,501)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted loss per
     common share                $       (0.27) $       (0.57) $       (0.59)

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number of
     common shares outstanding      55,835,356     55,804,674     43,755,160

    Excludes common shares held
     in escrow for contingent
     additional payment related
     to the acquisition of
     Delex Therapeutics Inc.         2,380,953      2,380,953      2,380,953

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    Consolidated Statements of Cash Flows
    (Amounts in Canadian dollars, unless otherwise noted)

    -------------------------------------------------------------------------
                                                 Years ended June 30,
                                        2008            2007            2006
    -------------------------------------------------------------------------

    Cash provided by (used in):

    Operating activities:
      Loss for the year        $ (14,885,744)  $ (31,730,240)  $ (25,814,607)
      Items not involving cash:
        Depreciation of property
         and equipment               125,271         107,107          61,017
        Amortization of
         intangible assets         1,060,541       1,913,040       1,269,158
        Impairment of intangible
         assets                            -       1,829,538               -
        Loss on disposal of
         property and equipment       70,143               -               -
        Loss on sale of marketable
         securities                        -               -           2,623
        Stock-based compensation   2,063,973       1,716,913       2,588,413
        Stock-based consideration          -               -         100,000
        Warrants-based
         consideration                     -               -          54,775
      Change in non-cash operating
       working capital:
        Accounts receivable and
         prepaid expenses            (61,483)      1,816,092        (672,639)
        Accounts payable, accrued
         liabilities and deferred
         revenue                  (5,844,790)     11,604,460      (1,599,032)
      -----------------------------------------------------------------------
                                 (17,472,089)    (12,743,090)    (24,010,292)

    Financing activities:
      Issuance of common shares
       on exercise of options              -          11,232         851,322
      Issuance of common shares
       on exercise of warrants             -          89,375       3,627,430
      Net proceeds from issuance of
       shares and warrants                 -               -      42,622,618
      -----------------------------------------------------------------------
                                           -         100,607      47,101,370

    Investing activities:
      Short-term deposits, net    14,742,701      15,881,679     (55,529,720)
      Proceeds on sale of
       marketable securities               -               -           2,211
      Additions to property and
       equipment                     (37,770)       (127,162)        (54,791)
      Proceeds on sale of
       property and equipment         38,996               -               -
      -----------------------------------------------------------------------
                                  14,743,927      15,754,517     (55,582,300)

    Increase (decrease) in cash
     and cash equivalents         (2,728,162)      3,112,034     (32,491,222)

    Net cash assumed on
     acquisition                           -               -      34,540,166

    Cash and cash equivalents,
     beginning of year             5,847,351       2,735,317         686,373
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of year               $   3,119,189   $   5,847,351   $   2,735,317
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-cash items:
      Issuance of common shares
       on Delex acquisition    $           -   $           -   $   1,464,284
      Issuance of common shares
       on Eximias acquisition              -               -      35,063,171
      Issuance of common shares
       in exchange for licensed
       patents                             -               -         100,000

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    %SEDAR: 00004652E




For further information:

For further information: Thomas Fechtner, the Trout Group LLC, Tel.
(646) 378-2931, Email: tfechtner@troutgroup.com; James Smith, the Equicom
Group Inc., Tel. (416) 815-0700 x 229, Email: jsmith@equicomgroup.com;
Nominated Adviser, Canaccord Adams Limited, Ryan Gaffney, Tel. +44 (0)20 7050
6500


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