MIGENIX Reports First Quarter Fiscal Year 2008 Financial Results

MGIFF), a clinical-stage developer of drugs for infectious diseases, reports
financial results for the three months ended July 31, 2007 and an update on
its programs.


    Omiganan 1% gel (Omigard(TM)/CPI-226/MX-226; topical cationic peptide;
prevention of catheter-related infections): A pivotal Phase III study is in
progress in the United States under a Special Protocol Assessment (SPA)
agreement with the US FDA and in Europe. This confirmatory Phase III trial is
a randomized, Evaluation Committee-blinded study to assess the effectiveness
of Omigard(TM) vs. 10% povidone-iodine for the prevention of central venous
catheter-related infections. This ongoing trial is known as the Central Line
Infection Reduction Study, or CLIRS trial.
    On July 30, 2007 Cadence Pharmaceuticals, our North American and European
development and commercialization partner for Omigard(TM), announced that the
FDA had agreed with their plan to increase the number of patients to be
enrolled in CLIRS trial from 1,250 to 1,850. Cadence also announced that in
June 2007 it completed enrollment of the original target of 1,250 patients in
this clinical trial. Cadence expects they will complete enrollment of the new
goal of 1,850 patients in the second quarter of 2008. If the results of the
CLIRS trial are positive, Cadence expects to submit an NDA for omiganan 1% gel
in the first half of 2009.

    Celgosivir (MX-3253; oral a-glucosidase I inhibitor; treatment of chronic
hepatitis C virus infections): Final top-line results of a Phase II
combination study in non-responder and partial responder patients were
announced April 11, 2007, demonstrating proof-of-concept and evidence of
clinical benefit when adding celgosivir to the current standard-of-care HCV
therapy (pegylated interferon plus ribavirin) as compared to the active
control treatment (standard-of-care alone) in patients with chronic hepatitis
C virus genotype 1 infections who were characterized as non-responders to
prior therapy with optimized pegylated alpha interferon plus ribavirin.
    Data from the Phase II non-responder study were presented on April 15,
2007 at the 42nd Annual Meeting of the European Association for the Study of
the Liver (EASL) held in Barcelona, Spain and on May 21, 2007 at Digestive
Disease Week (DDW) 2007 held in Washington, DC.
    On June 26, 2007, Schering-Plough advised us that they would not be
entering into a second period of exclusivity to negotiate the terms of a
license agreement for celgosivir at that time. MIGENIX is now in various
stages of discussions with other interested parties for the partnering of
    A Phase II viral kinetics combination study of celgosivir in patients
with chronic HCV (genotype 1) infection who have not received prior treatment
for their infection is ongoing. The focus of this study is on viral kinetics,
pharmacokinetics, safety and tolerability of celgosivir in combination with
peginterferon alfa-2b with ribavirin. As reported previously, enrollment in
the study has been slower than anticipated. Interim 4-week data from the study
are expected in approximately 10 patients in October 2007, with guidance for
12-week data to be provided in conjunction with the 4-week data.
    All MIGENIX-related clinical trials of celgosivir to date have been
conducted in Canada. An Investigational New Drug (IND) application is planned
to be submitted to the US FDA in the first quarter of 2008 for the future
development of celgosivir.

    Omiganan (CLS001; topical cationic peptide; treatment of dermatological
diseases): Cutanea Life Sciences, Inc., our development and commercialization
partner for CLS001, is conducting a Phase II rosacea clinical trial in the
United States. The Phase II trial is a randomized, vehicle-controlled,
double-blind, multi-center study designed to evaluate the safety and efficacy
of CLS001 in up to 240 subjects with papulopustular rosacea. The primary
efficacy endpoint is the mean percent reduction in the number of inflammatory
lesions. This study is expected to be completed by the end of 2007.

    MX-2401 (IV lipopeptide; treatment of gram-positive bacterial
infections): Good Laboratory Practices ("GLP") non-clinical studies were
initiated in April 2007. Timing for completion of the GLP studies is dependent
upon (1) additional manufacturing process development work; (2) initiation of
the remaining required GLP studies; and (3) financial resources. Prior to
initiating clinical trials in humans with MX-2401 the Company will need to
complete the GLP studies, manufacture clinical trial GMP quality MX-2401,
submit and obtain regulatory approval for initiating clinical studies, and
various other activities. A $9.3 million investment commitment from Technology
Partnerships Canada is associated with this program.

    MX-4565 (small molecule; treatment of neurodegenerative diseases): In
June 2007 we were awarded a grant from the Michael J. Fox Foundation to fund
research in our MX-4565 program. The grant award agreement provides Elan
Pharmaceuticals with a limited right to license the technology arising from
the project for certain uses in the field of human disease.

    Annual General Meeting: The Company hosted its 2007 Annual General
Meeting yesterday. Re-elected to the board of directors were: David Scott
(Chairman), Michael Abrams, Jim DeMesa, Richard DeVries, Alistair Duncan,
Steve Gillis, Colin Mallet, Walter Moos, and Keith Schilit.

    Other Matters: Further to the notice of early termination of our
Vancouver facility lease due to a redevelopment of the site the Company has
entered into an offer to lease approximately 5,000 square feet of space
(currently office space, no labs) in close proximity to the existing facility
and has made an offer to lease approximately 6,000 to 9,000 square feet of lab
space in the Vancouver area. The Company is evaluating its facility options
and should it not locate suitable replacement premises or make alternative
arrangements on a timely basis, portions of the Company's operations may be


    For the three months ended July 31, 2007 ("Q1/08"), MIGENIX incurred a
loss of $3.1 million or $0.03 per common share, compared to a loss of
$2.5 million or $0.03 for the three months ended July 31, 2006 ("Q1/07"). The
increase in the Q1/08 loss compared to the Q1/07 loss is principally
attributable to: (i) a $0.4 million increase in research and development
expenses (see "Research and Development" below); (ii) a $0.2 million increase
in general and corporate expenses (see "General and Corporate" below; (iii) a 
 $0.1 million increase in the accretion of the convertible royalty
participation units (see "Other Income and Expenses" below); less: (iv) a $0.1
million decrease in amortization expense (see "Amortization" below).


    During Q1/08 the Company had nominal ((less than) $0.1 million) research
and development collaboration revenue (Q1/07: $nil). This research and
development collaboration revenue is pursuant to the sale of omiganan drug
substance to Cutanea Life Sciences.

    Research and Development Expenses

    The following table summarizes our research and development expenses for
the periods indicated:

                                             Three months    Financial years
                                             ended July 31    ended April 30
                                             2007     2006     2007     2006
    Program Expenses                           Canadian dollars, millions
      Omiganan 1% gel (partnered)             0.0      0.0      0.0      0.0
      Omiganan for dermatological
       diseases (partnered)                   0.0      0.0      0.0      0.0
      Celgosivir                              0.4      0.4      1.5      2.1
      MX-2401                                 0.0      0.0      1.1      0.6
      MX-4509                                 0.0      0.0      0.2      0.2
      Other Projects                          0.0      0.0      0.3      0.3
      Total Program Expenses                  0.4      0.4      3.1      3.2

    Unattributed Expenses
      Personnel                               0.7      0.6      2.7      2.7
      Patent costs                            0.3      0.2      0.8      0.9
      Other                                   0.3      0.1      0.9      0.9
      Total Unattributed Expenses             1.3      0.9      4.4      4.5

    Total Research & Development Expenses    $1.7     $1.3     $7.5     $7.7
    (1) Before amortization expense, technology and license acquisition
        costs, and write-offs of intangibles assets.
    (2) Value of $0.0 million represents $nil to ~$50,000 in expenses during
        the period.

    Our Omiganan programs are being advanced by development and
commercialization partners (Cadence Pharmaceuticals and Cutanea Life
    Celgosivir program costs were $0.4 million in Q1/08, relatively unchanged
from Q1/07.
    Costs in the MX-2401 program in Q1/08 were nominal (less than
$0.1 million) (Q1/07: nominal). The Q1/08 MX-2401 program costs are net of
$0.06 million in TPC assistance (Q1/07: $0.02 million).
    Research and development costs not allocated to programs were
$1.3 million in Q1/08 compared to $0.9 million in Q1/07. The approximate
$0.4 million increase in these unallocated research and development costs is
spread out across personnel costs (increased headcount initiated last year,
particularly with respect to non-clinical work in the celgosivir program),
patent costs (advancement of MX-3253 patent applications) and other costs
(higher level of activity in both the MX-3253 and MX-2401 programs).
    We anticipate that we will make determinations as to which programs to
pursue and how much funding to direct to each program on an ongoing basis. We
are currently focusing our resources on advancing the development of our
non-partnered programs: celgosivir and MX-2401.

    General and Corporate Expenses

    General and corporate expenses in Q1/08 were $1.0 million (Q1/07:
$0.8 million). Personnel costs were $0.5 million in Q1/08 (Q1/07: $0.5
million). The approximate $0.2 million increase in general and corporate costs
in Q1/08 compared with Q1/07 is principally due to: (i) contract personnel in
the Finance department engaged for internal controls, implementation of new
accounting software and year end work; and (ii) greater legal and accounting

    Amortization expense for equipment was approximately $0.1 million for
Q1/08 (Q1/07: $0.1 million).
    Amortization expense for intangible assets was approximately $0.1 million
for Q1/08 (Q1/07: $0.2 million).

    Other Income and Expenses

    Interest income was $0.1 million for Q1/08 (Q1/07: $0.1 million).
    Accretion expense related to the convertible royalty participation units
for Q1/08 was $0.4 million (Q1/07: $0.3 million). This accretion expense is a
non-cash expense resulting from accreting the liability component of the
convertible royalty participation units to the maximum royalties payable of
$29.5 million (will be reduced for actual royalties paid, any units converted
into common shares and should the estimate of royalties payable decline below
$29.5 million) over the estimated royalty payment term using the effective
interest method.
    The foreign exchange gains and losses were nominal for each of Q1/08 and

    Liquidity and Capital Resources

    As of July 31, 2007, the Company had cash, cash equivalents and
short-term investments of $12.8 million (April 30, 2007: $15.3 million) and
the Company's net working capital was $12.1 million (April 30, 2007:
$14.6 million). The $2.5 million decrease in net working capital from April
30, 2007 is primarily attributable to the cash loss of $2.4 million (loss
excluding non-cash expenses: amortization, stock-based compensation and
accretion of the convertible royalty participation units) for the three months
ended July 31, 2007.
    MIGENIX believes that its funds on hand at July 31, 2007, together with
ongoing cost containment measures and expected interest income, are sufficient
to provide for operations into the third quarter of calendar 2008 before funds
received, if any, from existing or new license agreements, the exercise of
warrants and options and future financing activities. The Company will
continue advancing its highest priority programs while operating within an
annual burn rate of $11 million to $13 million. The magnitude of spending in
the Company's development programs will be dependent on the licensing status
of the celgosivir program and results in the programs, and we may need to
increase or decrease our annual burn rate in response to such results. MIGENIX
is likely to need to raise additional funds in support of its operations and
there is no assurance that such funds can be obtained

    Outstanding Shares

    There are currently 94,463,806 (July 31, 2007: 94,463,806; April 30,
2007: 94,237,205) common shares outstanding; 29,465 convertible royalty
participation units (July 31, 2007 and April 30, 2007: 29,465); and 9,250,000
(July 31, 2007: 9,250,000; April 30, 2007: 9,350,000) preferred shares
outstanding. In May 2007 the Company converted 50,000 Series A and 50,000
Series B preferred shares into 158,342 common shares in respect of a milestone
achieved in the MX-2401 program in April 2007. As of August 31, 2007 the
4,000,000 Series E preferred shares representing potential milestone payments
of US$4,000,000 can be redeemed for the aggregate sum of US$1 following the
expiry of the milestone obligations associated with these preferred shares.

    Conference Call

    Investors, analysts and the media are invited to participate in a
conference call Tuesday September 11, 2007 at 11:00 a.m. ET (8:00 a.m. PT) to
discuss this announcement. To participate in the conference call, please dial
416-644-3415 or 1-800-732-9303. The call will be available for replay until
September 25, 2007 by calling 416-640-1917 or 1-877-289-8525 and entering the
pass code 21244947 followed by the number sign. The live and archived web cast
can be accessed through the company's website at www.migenix.com for the next
90 days.

    Selected Financial Highlights

    BALANCE SHEETS                                       July 31,   April 30,
    Unaudited - In Thousands of Canadian dollars            2007        2007
    Cash and cash equivalents                             $7,376      $2,945
    Short-term investments                                 5,437      12,365
    Other current assets                                   1,318       1,245
    Total current assets                                 $14,131     $16,555
    Long-term investments                                      1           1
    Equipment                                                928         881
    Intangible assets                                      1,607       1,671
    Deferred transaction costs(1)                              -         473
    Total assets                                         $16,667     $19,581

    Liabilities and Shareholders' Equity
    Accounts payable and accrued liabilities              $2,026      $1,958
    Total current liabilities                             $2,026      $1,958
    Convertible royalty participation units(1)             4,795       4,847
    Preferred shares                                           -         115
    Total liabilities                                     $6,821      $6,920

    Shareholders' equity
    Common shares                                       $125,156    $124,994
    Equity portion of convertible royalty
     participation units                                   4,554       4,554
    Contributed surplus                                    7,953       7,830
    Deficit                                             (127,817)   (124,717)
    Total shareholders' equity                            $9,846     $12,661
    Total liabilities and shareholders' equity           $16,667     $19,581
    (1) At July 31, 2007 pursuant to the adoption of new accounting standards
        Deferred transaction costs are netted against the Convertible royalty
        participation units in liabilities

    Unaudited - In Thousands Canadian dollars            Three months ended
     (except per share amounts)                               July 31,
                                                            2007        2006
      Research and development collaboration           $       6   $       -
                                                       $       6   $       -
      Research and development                             1,703       1,341
      General and corporate                                  987         789
      Amortization                                           137         226
                                                       $   2,827   $   2,356

    Loss before other income (expense)                 $  (2,821)  $  (2,356)
      Accretion of convertible royalty
       participation units                                  (421)       (300)
      Interest income                                        143         144
      Foreign exchange gain (loss)                            (1)         26
    Loss and comprehensive loss for the period         $  (3,100)  $  (2,486)
    Deficit, beginning of period                        (124,717)   (108,665)
    Deficit, end of period                             $(127,817)  $(111,151)

    Basic and diluted loss per common share            $   (0.03)  $   (0.03)
    Weighted avg. number of common shares
     outstanding (000's)                                  94,464      74,229

    STATEMENTS OF CASH FLOWS                             Three months ended
    Unaudited - In Thousands of Canadian dollars              July 31,
                                                            2007        2006
    Loss for the period                                $  (3,100)  $  (2,486)
    Items not affecting cash:
      Amortization                                           137         226
      Stock-based compensation                               133         147
      Accretion of convertible royalty
       participation units                                   421         300
      Changes in non-cash working capital items
       relating to operating activities                      (13)     (1,295)
    Cash used in operating activities                  $  (2,422)  $  (3,108)

    Issuance of common shares, net of issue costs              -           -
    Issuance of convertible royalty participation units        -       7,737
    Proceeds on exercise of stock options                      -           1
    Proceeds on exercise of warrants                          36          17
    Repayment of capital lease obligation                      -          (5)
    Cash provided by financing activities              $      36   $   7,750

    Funds from (purchases of) short-term investments       6,880      (1,364)
    Proceeds on disposal equipment                            12           -
    Purchases of equipment                                   (75)        (72)
    Cash provided by (used in) investing activities    $   6,817   $  (1,436)

    Increase in cash and cash equivalents              $   4,431   $   3,206
    Cash and cash equivalents, beginning of period         2,945       5,743
    Cash and cash equivalents, end of period           $   7,376   $   8,949

    About MIGENIX

    MIGENIX is committed to advancing therapy, improving health, and
enriching life by developing and commercializing drugs primarily in the area
of infectious diseases. The Company's clinical programs include drug
candidates for the treatment of chronic hepatitis C infections (Phase II and
preclinical), the prevention of catheter-related infections (Phase III) and
the treatment of dermatological diseases (Phase II). MIGENIX is headquartered
in Vancouver, British Columbia, Canada with US operations in San Diego,
California. Additional information can be found at www.migenix.com.

    "Jim DeMesa"
    James M. DeMesa, M.D.
    President & CEO


    This news release contains forward-looking statements within the meaning
of the United States Private Securities Litigation Reform Act of 1995, and
forward-looking information within the meaning of applicable securities laws
in Canada, (collectively referred to as "forward-looking statements").
Statements, other than statements of historical fact, are forward-looking
statements and include, without limitation, statements regarding our strategy,
future operations, timing and completion of clinical trials, prospects, plans
and objectives of management. The words "anticipates", "believes", "budgets",
"could", "estimates", "expects", "forecasts", "intends", "may", "might",
"plans", "projects", "schedule", "should", "will", "would" and similar
expressions are often intended to identify forward-looking statements, which
include underlying assumptions, although not all forward-looking statements
contain these identifying words. By their nature, forward-looking statements
involve numerous assumptions, known and unknown risks and uncertainties, both
general and specific, that contribute to the possibility that the predictions,
forecasts, projections and other things contemplated by the forward-looking
statements will not occur.
    Although our management believes that the expectations represented by
such forward-looking statements are reasonable, there is significant risk that
the forward-looking statements may not be achieved, and the underlying
assumptions thereto will not prove to be accurate. Forward-looking statements
in this news release include, but are not limited to, statements concerning
our expectations for: Cadence Pharmaceuticals completing enrollment of 1,850
patients in the CLIRS trial in the second quarter of 2008 and if the results
of this trial are positive, Cadence submitting a new drug application (NDA)
for Omigard in the first half of 2009; data from the celgosivir Phase II
extension protocol being available by the end of 2007; 4-week interim results
from the Phase II viral kinetics combination study of celgosivir in
approximately 10 treatment-naive patients in October 2007; submitting an IND
in the US in the first quarter of 2008 for the future development of
celgosivir; Cutanea Life Sciences completing the Phase II CLS001 rosacea
clinical trial in 2007; our estimate of the probable royalties payable to the
holders of the convertible royalty participation units; the Company continuing
to advance its highest priority programs while operating within an annual burn
rate of $11 million to $13 million; and the Company's financial resources
being sufficient to fund operations into the third quarter of calendar 2008.
    With respect to the forward-looking statements contained in this news
release, we have made numerous assumptions regarding, among other things:
Cadence's ability to enroll sufficient patients to complete the Omigard CLIRS
trial; the adequacy of the CLIRS trial design to generate data that are deemed
sufficient by regulatory authorities to support potential regulatory filings,
including an NDA, for Omigard; our ability to manage licensing opportunities;
our ability to initiate, fund and complete non-clinical studies, clinical
studies, manufacturing and all ancillary activities within our expected
timelines; our partner Cutanea Life Sciences completing a Phase II CLS001
rosacea clinical trial in 2007; to and future expense levels being within our
current expectations.
    Actual results or events could differ materially from the plans,
intentions and expectations expressed or implied in any forward-looking
statements, including the underlying assumptions thereto, as a result of
numerous risks, uncertainties and other factors including: dependence on
corporate collaborations; potential delays; uncertainties related to early
stage of technology and product development; uncertainties as to the
requirement that a drug be found to be safe and effective after extensive
clinical trials and the possibility that the results of such trials, if
completed, will not establish the safety or efficacy of our products;
uncertainties as to future expense levels and the possibility of unanticipated
costs or expenses or cost overruns; the possibility that opportunities will
arise that require more cash than presently anticipated and other
uncertainties related to predictions of future cash requirements; and other
risks and uncertainties which may not be described herein. Certain of these
factors and other factors are described in detail in the Company's Annual
Information Form and Annual Report on Form 20-F for and other filings with the
Canadian securities regulatory authorities and the U.S. Securities & Exchange
    Forward-looking statements are based on our current expectations and
MIGENIX assumes no obligations to update such information to reflect later
events or developments.

    The Toronto Stock Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

For further information:

For further information: Art Ayres, MIGENIX Inc., Tel: (604) 221-9666
Ext. 233, aayres@migenix.com; Dian Griesel, Ph.D., Investor Relations Group,
Tel: (212) 825-3210, Theproteam@aol.com

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