August 18, 2003

Neurochem Reports on Fourth Quarter and 2003 Year End Results.
Strategic focus on diseases of Central Nervous System and promising results on Phase II trial for Alzheimer candidate drug.

Neurochem Inc. (TSX : NRM) In announcing its results for the fourth quarter and 2003 fiscal year ended June 30, 2003, Neurochem Inc. (TSX: NRM) highlighted two milestones in its activities during this period. Neurochem announced promising results of a Phase II clinical trial with the investigational drug candidate, Alzhemed™, for the treatment of patients with mild-to-moderate Alzheimer's disease (AD). The Company also strengthened its strategic focus on diseases of the central nervous system by transferring to Innodia Inc., all intellectual property rights to its pre-clinical Diabetes project in exchange for an indirect 31% equity position in Innodia. The Company reported a net loss for its fourth quarter of $3,470,000 ($0.15 per share) compared to $4,693,000 ($0.26 per share) for the same quarter last year. The loss for the year ended June 30, 2003 amounted to $19,618,000 ($0.90 per share) compared to $13,475,000 ($0.75 per share) for the same period last year.

Update on Scientific Progress

Neurochem's drug development programs for its three key product candidates continued to make good progress during the past three months.

Alzhemed™

Neurochem completed the Phase II trial for Alzhemed™, the Company's investigational drug candidate for the treatment of Alzheimer's Disease (AD). The trial was primarily designed to evaluate the safety, tolerability, pharmacokinetic and pharmacodynamic profile of Alzhemed in 58 patients with mild to moderate AD. There were no safety findings of concern in patients treated with Alzhemed. The pharmacokinetic profile of Alzhemed™ has been well characterized and it was detected in the cerebrospinal fluid (CSF) of the patients, suggesting an ability to cross the blood brain barrier. Secondary objectives of the trial included the determination of amyloid levels in the CSF and cognitive function testing. Preliminary results revealed that patients with the greatest decrease in amyloid protein in the CSF were all on Alzhemed. Furthermore, the majority of patients on the highest dose of Alzhemed™ showed, at the six- month time point of the ongoing open-label extension study, stable results on cognitive function test.

Neurochem plans to publish the results of this Phase II trial in a peer-reviewed journal. Neurochem has endorsed the unanimous recommendation of its Clinical Advisory Board to proceed with Phase III efficacy studies, pending approval by regulatory authorities.



Fibrillex™

The pivotal Phase II/III clinical trial for Fibrillex™, Neurochem's most advanced program, completed patient recruitment and has 183 individuals enrolled. This two-year study is planned to end in January 2005. All patients who complete the Phase II/III clinical trial are invited to join an open-label extension study and receive Fibrillex™ for an additional two year period. No safety issues have been reported by the independent Data Safety Monitoring Board Neurochem has established to monitor the safety of patients during the trial.

Fibrillex™ is being developed for the treatment of AA amyloidosis, a fatal condition which develops in people suffering from chronic inflammatory and infectious diseases which are refractory to current treatments. No cure exists for AA amyloidosis and the disease commonly results in kidney failure, among other serious clinical effects.



Cerebril™

Recruitment for the Phase II clinical trial for Cerebril™, the Company's investigational drug candidate for the prevention of recurrence of Hemorrhagic Stroke due to Cerebral Amyloid Angiopathy, is on-going. The Company expects recruitment to be completed by the end of the summer of 2003 and the trial is being conducted in five centers in the United States. The study involves a 12-week treatment and is investigating the safety, tolerability, pharmacokinetic and pharmacodynamic profiles of Cerebril™ in 24 patients who have suffered a lobar hemorrhage.

During the quarter, Neurochem licensed to Innodia Inc., a company focused exclusively on the development of therapeutic treatments for Diabetes, its intellectual property rights relating to Neurochem's pre-clinical diabetes project in exchange for an important stake in Innodia. In addition to licensing its Diabetes technology to Innodia, Neurochem participated in Innodia's private placement and became Innodia's largest shareholder. Dr. Francesco Bellini, Chairman and CEO of Neurochem, and Dr. Francine Gervais, Neurochem's Vice President of Research and Development, joined Innodia's Board of Directors.

Neurochem also appointed to its Board of Directors Mr. Richard Cherney. Mr. Cherney is a partner with the law firm Davies Ward Phillips & Vineberg LLP and was replaced as Neurochem's corporate secretary by Mr. David Skinner, a senior lawyer, who was appointed Director of Legal Affairs and General Counsel for Neurochem.

Financial Results

The following information should be read in conjunction with the unaudited financial statements, as well as the audited financial statements for the fiscal year ended June 30, 2003.

For the year ended June 30, 2003, revenues amounted to nil compared to revenues of $2,271,000 for the same period last year. The decrease is due to the termination in the second quarter of 2002 of the collaborative research and licence agreement with H. Lundbeck A/S. As a result of the termination of this agreement, Neurochem has regained full ownership rights on drug molecules aimed at treating Alzheimer's disease, including Alzhemed™.

Research and development expenses, before research tax credits and grants, amounted to $4,676,000 for the quarter ended June 30, 2003, compared to $4,529,000 for the same period last year. For the year ended June 30, 2003, these expenses amounted to $18,782,000, compared to $15,304,000 for the year ended June 30, 2002. The increase is a direct result of the progression of the Company's product candidates progression to more advanced stages of clinical development during the year. Alzhemed™ and Cerebril™ were in Phase II clinical trial during the current year compared to Phase I last year and Fibrillex™ completed patient recruitment for its Phase II/III trialduring fiscal year 2003. As at June 30, 2003, approximately 240 patients were enrolled in clinical trials compared to approximately 50 patients a year earlier.

Research tax credits and grants amounted to $843,000 this quarter compared to $808,000 for the same quarter last year. For the year ended June 30, 2003, research tax credits and grants amounted to $3,305,000 compared to $3,119,000 for the corresponding period last year. The increase is due to higher research tax credits and is in line with the corresponding increase in research and development expenses qualifying for such tax credits. Research grants refer principally to investment contributions under the Technology Partnerships Canada Program received by the Company for the development of Alzhemed™ as well as payments received from the US Food and Drug Administration for the development of Fibrillex™.

General, administrative and other expenses for the quarter totaled $2,958,000 compared to $941,000 for the same quarter last year. The increase is mainly due to the hiring of new employees, increased awareness and educational activities related to AA Amyloidosis as well as higher professional fees due to increased corporate development activities. For the year ended June 30, 2003 these expenses amounted to $7,228,000 compared to $3,817,000 for the fiscal year 2002. The increase is mainly due to the above mentioned items as well as non-recurring expenses of $873,000 incurred in connection with the departure of two senior officers.

Depreciation and amortization for the current quarter increased to $320,000 ($1,197,000 for the year) from $230,000 for the comparable quarter last year ($888,000 for last year). The increase reflects the depreciation and amortization associated with the acquisition of additional property and equipment, as well as additions to patent costs, during the past year.

Interest income amounted to $157,000 ($800,000 for the year) compared to $199,000 for the comparable quarter last year ($1,144,000 for last year). The decrease results from lower average cash balances during the current quarter and throughout the year, compared to the same periods last year.

Gain on disposal of intellectual property amounted to $3,484,000 in fiscal 2003 and represents the gain realized on the technology transfer related to the Company's preclinical Diabetes project to Innodia Inc.

As a result, the net loss for this quarter amounts to $3,470,000 ($0.15 per share) compared to $4,693,000 ($0.26 per share) for the same quarter last year. The loss for the year ended June 30, 2003 amounted to $19,618,000 ($0.90 per share) compared to $13,475,000 ($0.75 per share) for the same period last year.

Liquidity and Capital Resources

As at June 30, 2003, the Company had cash, cash equivalents and marketable securities of $16,334,000 compared to $24,162,00 a year earlier. The decrease is due to funds used in operations and for capital expenditures, net of proceeds received from the issue of share capital and from the exercise of options and warrants.

As at July 31, 2003, the Company had 23,658,256 common shares outstanding as well as 2,323,397 options outstanding, of which 2,223,397 were granted under the stock option plan. In addition, warrants to purchase four million common shares of the Company were outstanding.

Neurochem Inc.
Selected Financial Highlights ($'000CDN)1

Three months Ended June 30

Twelve months Ended June 30

Statement of Operations

2003

2002

2003

2002

Revenues:

   Research contracts

-

-

-

2,271

2,271

Expenses:

   Research and
   Development

4,676

4,529

18,782

15,304

   Research tax credits
   & Grants

(843)

(808)

(3,305)

(3,119)

   General,
   administrative
   and other

2,958

941

7,228

3,817

   Depreciation and
   amortization

320

230

1,197

888

7,111

4,892

23,902

16,890

Interest income

157

199

800

1,144

Gain on sale of intellectual property

3,484

-

3,484

-

Net Loss

(3,470)

(4,693)

(19,618)

(13,475)

Loss per share

   Basic

(0.15)

(0.26)

(0.90)

(0.75)

   Diluted

(0.15)

(0.26)

(0.90)

(0.75)

Weighted average number of shares outstanding

   Basic

23,294,432

18,026,432

21,770,541

18,007,392

   Diluted

27,086,468

19,094,831

24,628,551

19,247,302

Balance Sheets

As at June 30, 2003

As at June 30 2002

Cash and cash equivalents and marketable securities

16,334

24,162

Other current assets

3,513

2,389

Total current assets

19,847

26,551

Long-term investments

4,421

-

Capital assets

6,656

5,956

Other long term assets

236

226

Total assets

31,160

32,733

Current liabilities

5,824

4,812

Obligations under
   capital leases

633

1,044

Shareholders' equity

24,703

26,877

Total liabilities and
   shareholders' equity

31,160

32,733

1 Condensed from the Company's audited financial statements.

About Neurochem

Neurochem is focused on the development and commercialization of innovative therapeutics for neurological disorders. The Company's staged pipeline of proprietary, disease-modifying, oral products addresses critical unmet medical needs. Fibrillex™, designated an orphan drug, is in a pivotal Phase II/III clinical trial for AA amyloidosis. Alzhemed™ has completed a Phase II clinical trial. Cerebril™ is in a Phase II trial for the prevention of hemorrhagic stroke caused by cerebral amyloid angiopathy. Neurochem is also developing a product for the potential treatment of epileptic seizures induced by traumatic brain injury. For additional information on Neurochem, please visit our website at: (www.neurochem.com).

This statement does not constitute an offer to sell or a sollicitation of an offer to purchase any common shares of Neurochem.

All of the statements contained in this news release, other than statements of fact which are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which Neurochem does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements.

For further Information, please contact:
Dr. Lise Hébert
Vice President, Corporate Communications
lhebert@neurochem.com

275 Armand-Frappier
Laval (Quebec)
H7V 4A7
Tel: (450) 680-4500
Fax: (450) 680-4501

Our site is best viewed with IE4+ at a resolution of 1024×768.
All contents copyright © 1998-2007 Neurochem Inc.
Terms, Conditions and Legal Notice.