Lorus Therapeutics Reports First Quarter Results for Fiscal Year 2011

Lorus Therapeutics Inc. (TSX:LOR)(OTCBB:LRUSF) ("Lorus" or the "Corporation"), a
biopharmaceutical company specializing in the research and development of
pharmaceutical products and technologies for the management of cancer, today
reported financial results for the three months ended August 31, 2010.




Q1 2011 HIGHLIGHTS                                                          

--  Received approval of the Investigational New Drug ("IND") application
    for Lorus' anticancer drug candidate LOR-253 by the U.S. FDA. Based on
    the approval of the IND by the FDA, Lorus plans to proceed with a first-
    in-man Phase I dose escalation trial with LOR-253 in advanced or
    metastatic solid tumors. The trial will assess the safety profile,
    tolerability, and antitumor activity of LOR-253 in cancer patients. It
    is expected that the Phase I trial will be initiated by the end of the
    calendar year. 

--  Filed a final short form prospectus for units of the Corporation (the
    "Rights Offering"). Under the Rights Offering, holders of common shares
    of the Corporation as of October 12, 2010 (the "Record Date") will
    receive one right for each common share held as of the Record Date. Each
    two (2) rights will entitle the holder thereof to purchase a unit of the
    Corporation ("Unit") at a price of $1.11 per Unit. Each Unit consists of
    one common share of the Corporation and one warrant to purchase an
    additional common share of the Corporation at a price of $1.33 until May
    2012. The Corporation has secured a standby purchase arrangement by
    Herbert Abramson, one of Lorus' directors whereby Mr. Abramson will make
    an investment such that the minimum gross proceeds of the Rights
    Offering are $4 million. There will be no fee paid to Mr. Abramson for
    this commitment. Mr. Abramson is also providing the Company with interim
    financing by way of three $500 thousand monthly loans, all have been
    advanced as of October 5, 2010. The loans are unsecured, have a six-
    month term (or the earlier of the closing of the Rights Offering) and
    bear interest at the annual rate of 10%. These loans will be repaid from
    the proceeds of the rights offering. 
    
--  Announced the publication of a peer-reviewed scientific article
    describing synthesis and antibacterial activity of novel antimicrobial
    compounds from Lorus' small molecule program. The article reported the
    results of studies showing that many of these compounds exhibited potent
    growth inhibition of multidrug resistant bacterial strains. Some of the
    compounds showed comparable antibacterial activity to that of vancomycin
    and higher activity than linezoid, both of which are antibiotics
    currently used to treat serious bacterial infections. 
    



FINANCIAL RESULTS

Our loss from operations for the three months ended August 31, 2010 was $1.2
million ($0.12 per share) compared with $1.2 million ($0.15 per share) during
the same period in fiscal 2010. During the three months ended August 31, 2009
the Company recorded a gain on the repurchase of its secured convertible
debentures of $11.0 million reflecting the difference between the fair value of
the debentures at the repurchase date, net of transaction costs of $221
thousand, and the cash payment amount of $3.3 million resulting in net income
for the period of $9.8 million (income $1.14 per share). 


Loss from operations for the three months ended August 31, 2010 compared with
the same period in the prior year remained consistent. Lower research and
development expenditures of $51 thousand due to reduction in spending to
conserve cash, lower stock based compensation expense of $56 thousand due to no
stock options issued in the first quarter of 2011 as well as no accretion in the
carrying value of the convertible debentures due to their settlement in the
first quarter of 2010 were offset by no revenue in the current quarter compared
with $49 thousand in the prior year as well as higher general and administrative
spending of $56 thousand resulting from financing fees of $95 thousand due to
the terminated US financing. 


We utilized cash of $685 thousand in our operating activities in the three
months ended August 31, 2010 compared with $987 thousand in the same period in
the prior year. The decrease is primarily a result of increased current
liabilities balances. 


At August 31, 2010, we had cash and cash equivalents and short-term investments
of $227 thousand compared to $914 thousand at May 31, 2010. 


Research and development expenses totaled $489 thousand in the three months
ended August 31, 2010 compared to $540 thousand during the same period in the
prior year. The slight decrease in spending during the current period compared
with the prior-year period is due to a reduction in expenditures during the
current period in an effort to conserve cash. Costs incurred during the quarter
related primarily to the preparation of the LOR-253 Phase I clinical trial to be
initiated in the fourth quarter of calendar 2010.


General and administrative expenses totaled $589 thousand for the three months
ended August 31, 2010 compared to $533 thousand in the same period in the prior
year. The slight increase in costs is due to $95 thousand in financing fees
related to the proposed US financing terminated during the quarter. Excluding
these one time costs general and administrative costs were lower than the prior
year, primarily due to headcount reductions. 


Management has forecasted that the Company's current level of cash, cash
equivalents and short-term investments is not sufficient to execute its current
planned expenditures for the next twelve months without further investment. The
Company is currently in discussion with several potential investors to provide
additional funding. Management believes that it will complete one or more of
these arrangements in sufficient time to continue to execute its planned
expenditures without interruption. However, there can be no assurance that the
capital will be available as necessary to meet these continuing expenditures, or
if the capital is available, that it will be on terms acceptable to the Company.




Lorus Therapeutics Inc.                                                     
Consolidated Statements of (Loss) Earnings - Unaudited                      
                                                                            
(amounts in 000's except for per common      Three months      Three months 
 share data)                                        ended             ended 
(Canadian dollars)                          Aug. 31, 2010     Aug. 31, 2009 
----------------------------------------------------------------------------
REVENUE                                   $             -   $            49 
----------------------------------------------------------------------------
                                                                            
EXPENSES                                                                    
Research and development                              489               540 
General and administrative                            589               533 
Stock-based compensation                               49               105 
Depreciation and amortization of fixed                                      
 assets                                                14                21 
----------------------------------------------------------------------------
Operating expenses                                  1,141             1,199 
Interest expense                                       28                27 
Accretion in carrying value of convertible                                  
 debentures                                             -                80 
Interest income                                        (4)              (11)
----------------------------------------------------------------------------
Loss from operations for the period                (1,165)           (1,246)
----------------------------------------------------------------------------
Gain on repurchase of convertible                                           
 debentures and transfer of assets                      -            11,006 
----------------------------------------------------------------------------
Net (loss) earnings and other                                               
 comprehensive income for the period               (1,165)            9,760 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Basic and diluted (loss) earnings per                                       
 common share                             $         (0.12)  $          1.14 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Weighted average number of common shares                                    
 outstanding used in the calculation of                                     
 Basic and Diluted (loss) earnings per                                      
 common share                                       9,933             8,567 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



About Lorus

Lorus is a biopharmaceutical company focused on the research and development of
novel therapeutics in cancer. Lorus' goal is to capitalize on its research,
preclinical, clinical and regulatory expertise by developing new drug candidates
that can be used, either alone, or in combination with other drugs, to
successfully manage cancer. Lorus Therapeutics Inc. is listed on the Toronto
Stock Exchange under the symbol LOR and the Over the Counter Bulletin Board
under the symbol LRUSF.


Forward Looking Statements

This press release contains forward-looking statements within the meaning of
Canadian and U.S. securities laws. Such statements include, but are not limited
to, statements relating to: the ability of the company to continue as a going
concern, the completion of the rights offering, future financing, the
establishment of corporate alliances, the Company's plans, objectives,
expectations and intentions and other statements including words such as
"continue", "expect", "intend", "will", "should", "would", "may", and other
similar expressions. Such statements reflect our current views with respect to
future events and are subject to risks and uncertainties and are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by us are inherently subject to significant business, economic,
competitive, political and social uncertainties and contingencies. Many factors
could cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements described in this
press release. Such expressed or implied forward-looking statements could
include, among others: our ability to continue to operate as a going concern;
our ability to obtain the capital required for research and operations; our
ability to complete the proposed rights offering; the inherent risks in early
stage drug development including demonstrating efficacy; development time/cost
and the regulatory approval process; the progress of our clinical trials; our
ability to find and enter into agreements with potential partners; our ability
to attract and retain key personnel; changing market conditions; and other risks
detailed from time-to-time in our ongoing quarterly filings, annual information
forms, annual reports and annual filings with Canadian securities regulators and
the United States Securities and Exchange Commission.


Should one or more of these risks or uncertainties materialize, or should the
assumptions set out in the section entitled "Risk Factors" in our filings with
Canadian securities regulators and the United States Securities and Exchange
Commission underlying those forward-looking statements prove incorrect, actual
results may vary materially from those described herein. These forward-looking
statements are made as of the date of this press release and we do not intend,
and do not assume any obligation, to update these forward-looking statements,
except as required by law. We cannot assure you that such statements will prove
to be accurate as actual results and future events could differ materially from
those anticipated in such statements. Investors are cautioned that
forward-looking statements are not guarantees of future performance and
accordingly investors are cautioned not to put undue reliance on forward-looking
statements due to the inherent uncertainty therein.


Lorus Therapeutics Inc.'s recent press releases are available through its
website at www.lorusthera.com. For Lorus' regulatory filings on SEDAR, please go
to www.Sedar.com.