2006 YEAR END OPERATIONAL AND FINANCIAL RESULTS

    YM Biosciences reports 2006 year end operational and financial results

    MISSISSAUGA, ON, Sept. 22 /CNW/ - YM BioSciences Inc. (AMEX:YMI, TSX:YM,
AIM:YMBA), a company engaged in the acquisition, development and
commercialization of oncology and acute care products, today reported
operational and financial results for the fourth quarter and the 2006 fiscal
year, ended June 30, 2006.
    "In fiscal 2006, we made exceptional progress in strengthening YM's
fundamentals. We move into fiscal 2007 with significant cash reserves and an
advanced product pipeline that has the prospect of yielding registration data
for both of our lead cancer drugs within the next 12-15 months," said David
Allan, Chairman and CEO of YM BioSciences. "The pivotal trial for tesmilifene,
our lead clinical candidate, has been the subject of two interim analyses of
safety and survival data which indicated the drug continues to be safe and the
trial continues to have the prospect of meeting its survival endpoint. A third
interim analysis is anticipated in the coming months, a fourth possibly in Q1
2007 and mature data during calendar 2007."
    "For Nimotuzumab, data from numerous trials continue to demonstrate the
unique and competitive safety profile of this drug including an absence of the
side effects typically seen with other products in this drug class, notably
rash, severe diarrhea, conjunctivitis and hypomagnesemia. As this drug
progresses through a Phase III trial in pediatric glioma in Europe, these
properties could position nimotuzumab to become the EGFr-targeting drug best
suited for chronic use and we are encouraged by its having been approved, for
commercial use, by regulatory authorities in a number of countries," added
Mr. Allan.

    Highlights of Fiscal 2006 (July 1, 2005 - June 30, 2006):

    
    Tesmilifene
    -   Enrolment of 723 patients in the pivotal Phase III trial of
        tesmilifene in metastatic and recurrent breast cancer was completed.
    -   FDA Fast Track designation for tesmilifene in advanced breast cancer
        was received.
    -   A hypothesis of tesmilifene's mode of action authored by Dr. Mark
        Vincent in Medical Hypotheses, Vol. 66 No. 4, was published.
    -   Positive results of a Phase II trial in hormone refractory prostate
        cancer were published in the November 2005 issue of the Journal of
        Urology.
    -   Collaborative agreement was signed with Sanofi-Aventis to investigate
        the effect of combining tesmilifene and Taxotere(R) (docetaxel) for
        treatment of women with rapidly progressing metastatic breast cancer.

    Nimotuzumab
    -   YM's partner, Oncoscience AG, commenced patient treatment in a
        Phase III trial in Germany with nimotuzumab. The trial is expected to
        complete patient recruitment in the first half of calendar 2007. The
        drug is also undergoing a Phase II monotherapy trial in Europe in
        patients with advanced metastatic pancreatic cancer.
    -   Oncoscience AG presented updated positive data from a Phase II
        monotherapy trial of nimotuzumab in children with resistant or
        relapsed brain cancers at the International Society of Paediatric
        Oncology conference on September 18, 2006.
    -   A multi-center Phase I/II trial comparing the effects of the
        combination of nimotuzumab with radiation against radiation alone in
        patients with non-small-cell lung cancer (NSCLC) unfit for
        chemotherapy was initiated. Recruitment for the trial should be
        completed in late calendar 2007 or early 2008. The trial is expected
        to be expanded into South Korea through YM partner Kuhnil
        Pharmaceutical Company of Seoul, Korea.

    AeroLEF(TM)
    -   A randomized Phase IIb trial with AeroLEF(TM) for the treatment of
        moderate to severe post-operative acute pain was initiated in 2006
        and a preliminary report is expected in calendar Q4, 2006. YM intends
        to continue development with the goal of initiating a Phase III trial
        in the U.S. subject to positive Phase II data.

    Other product highlights
    -   Clinical trial results for its anti-GnRH prostate cancer vaccine,
        Norelin(TM), in hormone sensitive prostate cancer (HSPC) were
        presented at the "Cancer Vaccines/Adjuvants/Delivery for the Next
        Decade" conference in Lisbon, Portugal September 5-7, 2005.
    -   An exclusive worldwide license agreement with the University of
        Saskatchewan for a portfolio of small molecule compounds that appear
        to be highly potent enhancers of the activities of existing
        chemotherapeutic treatments was completed.

    Corporate highlights
    -   Licensed South Korean development and marketing rights for
        nimotuzumab to Kuhnil Pharmaceuticals Ltd. of Seoul, South Korea.
    -   Licensed Southeast Asian and some African development and marketing
        rights for nimotuzumab to Innogene Kalbiotech, a subsidiary of PT.
        Kalbe Farma Tbk. of Jakarta, Indonesia.
    -   Licensed nimotuzumab, subsequent to the year-end, to Daiichi
        Pharmaceutical Co., Ltd., a subsidiary of Daiichi Sankyo Company,
        Limited, for the Japanese territory and received an up-front payment
        of US$14.5 million and potentially significant milestone payments at
        certain stages of development for each of a number of indications as
        well as payments based on supply of nimotuzumab and sales performance
        in the territory.
    -   Acquired Eximias Pharmaceutical Corporation, obtaining an experienced
        senior management team and approximately US $29.5 million in cash.
    -   Raised US $40.1 million through a "registered direct" offering of
        common shares.
    -   The Company's first "R&D Day" was held in New York for analysts and
        portfolio managers.
    

    Financial Results (all figures in Canadian dollars)
    Total revenue for the fiscal year ended June 30, 2006 was $2.5 million
compared to $1.5 million for the fiscal year ended June 30, 2005. Total
revenue for the fourth quarter ended June 30, 2006 was $1.1 million compared
to $0.3 million for the same quarter last year. The increases were primarily
due to increased interest income resulting from the Company's significantly
larger short-term deposits compared with the previous year.
    Total operating expenditures for the fiscal year ended June 30, 2006 were
$28.1 million compared to $17.3 million for the fiscal year ended June 30,
2005. Total operating expenditures for the fourth quarter ended June 30, 2006
were $9.3 million compared to $6.9 million for the same quarter in 2005.
    General and Administrative expenses for the fiscal year ended June 30,
2006 were $8.0 million compared to $6.3 million for the fiscal year ended
June 30, 2005. General and Administrative expenses for the quarter ended
June 30, 2006 were $3.4 million compared to $2.3 million for the same quarter
in the prior year. General and Administrative expenses increased in 2006 over
2005 due principally to higher legal costs, stock-exchange and
investor-related costs and stock-based compensation expenses.
    Licensing and Product Development expenses for the fiscal year ended
June 30, 2006 were $20.2 million compared to $11.0 million for the fiscal year
ended June 30, 2005. Licensing and Product Development expenses for the fourth
quarter ended June 30, 2006 were $5.9 million compared to $4.5 million for the
same quarter in 2005. Licensing and Product Development expenses increased
from 2005 due to the progression of the tesmilifene Phase III clinical trial,
development of the AeroLEF(TM) technology, increased out-licensing activity
and the inclusion of Eximias results for two months.
    Net loss for the fiscal year and fourth quarter ended June 30, 2006 was
$25.8 million ($0.59 per share) and $8.6 million ($0.16 per share) compared to
$15.9 million ($0.47 per share) and $6.5 million ($0.18 per share)
respectively for the same periods last year.
    On February 16, 2006, the Company raised gross proceeds of
US$40.1 million through a "registered direct" offering of common shares.
    Subsequent to the end of the fiscal year, on July 25, 2006 the Company
entered into a License, Development, Manufacturing and Supply Agreement for
nimotuzumab. Under the terms of the agreement, the Company has received a
license fee of US$14,500,000. The agreement also entitles the Company to
receive milestone payments on the occurrence of events specified in the terms
of the contract and further payments based on the commercial sale of the
developed product. The license fee will be recognized over the term of the
related development collaboration.
    As at June 30, 2006 the Company had 55,781,523 common shares outstanding,
2,380,953 common shares held in escrow for contingent additional payment
related to the acquisition of Delex Therapeutics Inc., 9,022,777 warrants, and
4,779,789 options.

    AGM Announcement
    YM BioSciences' Annual and Special Meeting of Shareholders will be held
on November 28th, 2006 at 4:00 p.m. at the Gallery of the TSX Broadcast &
Conference Centre, The Exchange Tower, 130 King Street West, Toronto, Ontario.

    About YM BioSciences
    YM BioSciences Inc. is engaged in the acquisition, development and
commercialization of oncology and acute care products.
    Tesmilifene is a small molecule MDR-targeting agent that is being tested
in combination with various standard chemotherapy regimens for the treatment
of cancer. In addition to the Phase III DEC trial combining tesmilifene with
an anthracycline, a collaborative trial with Sanofi-Aventis is currently
ongoing combining tesmilifene with Taxotere(R) (docetaxel) a taxane drug. A
trial combining tesmilifene with epirubicin, cyclophosphamide, and 5-FU is
anticipated for the treatment of gastric cancer and additional trials are in
planning.
    In addition, YM BioSciences is developing nimotuzumab, AeroLEF(TM) and
Norelin.
    Nimotuzumab is an anti-EGFR humanized antibody that was recently
partnered in Japan with Daiichi Pharmaceutical Co., Ltd., a subsidiary of
Daiichi Sankyo Company, Limited Nimotuzumab was approved in India in July 2006
for the treatment of head & neck cancer, is currently in a Phase III trial in
Europe in combination with radiation for the treatment of pediatric pontine
glioma and a Phase I/II trial in a specific population of patients with
non-small cell lung cancer in Canada.
    AeroLEF(TM) is a unique inhaled-delivery composition of free and liposome
encapsulated fentanyl, for the treatment of moderate to severe acute pain,
including cancer pain. AeroLEF(TM) is currently enrolling post-surgical
patients in a randomized Phase IIb trial.
    Norelin, an anti-cancer vaccine, stimulates the immune system to develop
antibodies to gonadotropin-releasing hormone (GnRH). In addition, YM
BioSciences owns a portfolio of pre-clinical compounds.

    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 the pivotal tesmilifene Phase III trial will be completed
on schedule and yield mature data in calendar 2007; that the DSMB's
recommendations to continue the pivotal trial for tesmilifene based on two
early analyses implies that the trial continues to have the prospect of
meeting its primary endpoint; that nimotuzumab will continue to demonstrate a
competitive safety profile in ongoing and future clinical trials; 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.

    Summary financial statements attached:

    
    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Consolidated Balance Sheets
    (Amounts in Canadian dollars, unless otherwise noted)

    June 30, 2006 and 2005
    -------------------------------------------------------------------------
                                                         2006           2005
    -------------------------------------------------------------------------

    Assets

    Current assets:
      Cash and cash equivalents                 $   2,735,317  $     686,373
      Short-term deposits                          85,606,117     29,882,472
      Marketable securities                                 -          4,834
      Accounts receivable                           2,214,775      1,591,712
      Prepaid expenses                                318,338        159,661
    -------------------------------------------------------------------------
                                                   90,874,547     32,325,052

    Capital assets                                    304,985        226,698

    Intangible assets                               8,868,528      5,648,141

    -------------------------------------------------------------------------
                                                $ 100,048,060  $  38,199,891
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities and Shareholders' Equity

    Current liabilities:
      Accounts payable                          $   2,367,042  $   2,995,457
      Accrued liabilities                           1,350,923        830,158
      Deferred revenue                                738,297        206,770
      -----------------------------------------------------------------------
                                                    4,456,262      4,032,385

    Long-term portion of deferred revenue             844,275        327,387

    Shareholders' equity:
      Share capital                               172,771,544     87,487,802
      Share purchase warrants                       4,597,988      5,313,283
      Contributed surplus                           3,944,492      1,790,928
      Deficit accumulated during the
       development stage                          (86,566,501)   (60,751,894)
      -----------------------------------------------------------------------
                                                   94,747,523     33,840,119

    Basis of presentation
    Commitments
    Subsequent event

    -------------------------------------------------------------------------
                                                $ 100,048,060  $  38,199,891
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Consolidated Statements of Operations and  Deficit Accumulated During the
    Development Stage
    (Amounts in Canadian dollars, unless otherwise noted)

    -------------------------------------------------------------------------
                                                                        From
                                                                inception on
                                                                   August 17,
                                                                        1994
                                  Years ended June 30,            to June 30,
                           2006           2005           2004           2006
    -------------------------------------------------------------------------
    Revenue       $   1,151,135  $     748,020  $           -  $   1,899,155
    Interest
     income           1,397,558        703,873        347,187      4,889,849
    -------------------------------------------------------------------------
                      2,548,693      1,451,893        347,187      6,789,004

    Expenses:
      General and
       admini-
       strative       7,951,470      6,314,357      3,610,848     29,099,199
      Licensing
       and product
       development   20,188,577     10,981,950      5,066,569     62,046,914
      -----------------------------------------------------------------------
                     28,140,047     17,296,307      8,677,417     91,146,113
    -------------------------------------------------------------------------

    Loss before
     the
     undernoted     (25,591,354)   (15,844,414)    (8,330,230)   (84,357,109)

    Loss on
     foreign
     exchange          (220,630)             -              -       (220,630)

    Gain (loss) on
     marketable
     securities          (2,623)             -        638,332     (1,191,329)

    Unrealized
     loss on
     marketable
     securities               -        (14,881)             -              -
    -------------------------------------------------------------------------

    Loss before
     income taxes   (25,814,607)   (15,859,295)    (7,691,898)   (85,769,068)

    Income taxes              -              -              -          7,300
    -------------------------------------------------------------------------

    Loss for the
     period         (25,814,607)   (15,859,295)    (7,691,898)   (85,776,368)

    Deficit,
     beginning
     of period      (60,751,894)   (44,319,267)   (36,470,665)             -

    Cost of
     purchasing
     shares for
     cancellation
     in excess of
     book value               -       (573,332)      (156,704)      (790,133)

    -------------------------------------------------------------------------
    Deficit, end
     of period    $ (86,566,501) $ (60,751,894) $ (44,319,267) $ (86,566,501)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and
     diluted loss
     per common
     share        $       (0.59) $       (0.47) $       (0.36)

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

    Weighted
     average
     number of
     common shares
     outstanding     43,755,160     34,046,450     21,353,479

    Excludes
     common shares
     held in
     escrow for
     contingent
     additional
     payment
     related to
     the
     acquisition
     of Delex
     Therapeutics
     Inc.             2,380,953      2,777,778              -

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



    YM BIOSCIENCES INC.
    (A DEVELOPMENT STAGE COMPANY)

    Consolidated Statements of Cash Flows
    (Amounts in Canadian dollars, unless otherwise noted)

    -------------------------------------------------------------------------
                                                                        From
                                                                inception on
                                                                   August 17,
                                                                        1994
                                  Years ended June 30,            to June 30,
                           2006           2005           2004           2006
    -------------------------------------------------------------------------

    Cash provided
     by (used in):

    Operating
     activities:
      Loss for
       the
       period     $ (25,814,607) $ (15,859,295) $  (7,691,898) $ (85,776,368)
      Items not
       involving
       cash:
        Depre-
         ciation
         of
         capital
         assets          61,017         11,717         14,910        331,681
        Amorti-
         zation of
         intangible
         assets       1,269,158        137,760              -      1,406,918
        Unrealized
         loss on
         marketable
         securities           -         14,881              -      1,827,038
        Loss (gain)
         on
         marketable
         securities       2,623              -       (638,332)      (635,709)
        Stock-based
         compen-
         sation       2,588,413      1,278,955        500,375      4,436,563
        Stock-based
         consider-
         ation          100,000        192,750              -        292,750
        Warrants-
         based
         consider-
         ation           54,775              -              -         54,775
      Change in
       non-cash
       operating
       working
       capital:
        Accounts
         receivable
         and
         prepaid
         expenses      (672,639)      (367,916)      (295,651)    (1,504,391)
        Accounts
         payable
         and accrued
         liabilities
         and
         deferred
         revenue     (1,599,032)     2,396,216        841,128      2,058,895
    -------------------------------------------------------------------------
                    (24,010,292)   (12,194,932)    (7,269,468)   (77,507,848)

    Financing
     activities:
      Repayment of
       debentures             -     (1,469,425)             -     (1,469,425)
      Issuance of
       common shares
       on exercise
       of options       851,322        109,318      1,544,375      2,505,014
      Issuance of
       common shares
       on exercise
       of warrants    3,627,430        432,402        222,348      4,282,180
      Redemption of
       preferred
       shares                 -              -              -     (2,630,372)
      Purchase of
       shares for
       cancellation           -       (779,909)      (230,379)    (1,029,679)
      Net proceeds
       from
       issuance of
       shares and
       warrants      42,622,618     18,884,120     17,047,001    123,276,729
    -------------------------------------------------------------------------
                     47,101,370     17,176,506     18,583,345    124,934,447

    Investing
     activities:
      Short-term
       deposits,
       net          (55,529,720)   (14,988,521)   (14,893,951)   (85,412,192)
      Proceeds on
       sale of
       marketable
       securities         2,211              -      1,402,239      1,404,450
      Additions to
       capital and
       intangible
       assets           (54,791)       (27,034)        (3,724)      (450,153)
    -------------------------------------------------------------------------
                    (55,582,300)   (15,015,555)   (13,495,436)   (84,457,895)
    -------------------------------------------------------------------------

    Decrease in
     cash and cash
     equivalents    (32,491,222)   (10,033,981)    (2,181,559)   (37,031,296)

    Net cash
     assumed on
     acquisition     34,540,166      5,226,447              -     39,766,613

    Cash and cash
     equivalents,
     beginning of
     period             686,373      5,493,907      7,675,466              -

    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of
     period       $   2,735,317  $     686,373  $   5,493,907  $   2,735,317
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Non-cash
     items:
      Issuance
       of common
       shares on
       Delex
       acqui-
       sition     $   1,464,284  $   9,862,697  $           -  $  11,326,981
      Issuance of
       common
       shares on
       Eximias
       acquisition   35,063,171              -              -     35,063,171

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



For further information: Enquiries: Thomas Fechtner, The Trout Group LLC,
Tel. [phone] x31, Fax [phone], Email:
tfechtner(at)troutgroup.com; James Smith, the Equicom Group Inc., Tel. (416)
815-0700 x 229, Fax [phone], Email: jsmith(at)equicomgroup.com
(YMBA)


 



END