MONTRÉAL, QUÉBEC--(Marketwire - July 11, 2012) - Thallion Pharmaceuticals Inc. (TSX:TLN) today announced its operational and financial results for the three and six month periods ended May 31, 2012.

"We continue to execute on our focused Shigamabs^® strategy. The results from the Phase II SHIGATEC trial confirmed Shigamabs^® is safe and well tolerated. As the first trial in the targeted pediatric population, these results represent a critical step forward in the development of the product," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals. "The study has also provided us with important insights as we proceed with Shigamabs^® development."

Operational Highlights

• Announced positive top-line results, which met the primary endpoint of safety and tolerability, from the Phase II SHIGATEC trial evaluating the Company's Shigamabs^® drug candidate as a treatment for Shiga toxin-producing E. coli (STEC) infection
• Presented the top-line data from the Phase II SHIGATEC trial at VTEC 2012, the premier international E. coli symposium, demonstrating the safety and tolerability of Shigamabs^® in a STEC-infected pediatric population
• On July 10, 2012, the Toronto Stock Exchange ("TSX") notified the Company that it is reviewing the securities of the Company with respect to meeting the continued listing requirements. The Company has been granted 120 days in which to regain compliance with these requirements, pursuant to the Remedial Review Process.

Financial Highlights

Collaboration and licensing revenues for the three month and six month periods ended May 31, 2012, were $532,036 and $1,148,593 respectively, compared to $1,021,034 and $1,854,916 the three month and six month periods ended May 31, 2011. The decrease in revenues is primarily due to a decline in research and development expenses in the first half of 2012 compared to the first half of 2011, explained below, resulting in an approximate $200,000 and $350,000 reduction in recognized revenues, respectively. In addition, the Company had revised its estimate for clinical and manufacturing costs necessary to complete both the Phase II and Phase III SHIGATEC studies in the fourth quarter of 2011. This revised estimate directly impacts the percentage of completion calculation used to recognize revenues, resulting in lower revenue recognition in the first half of 2012 compared to the first half of 2011 at the same expenditure level.

Research and development (R&D) expenses before tax credits for the three month and six month periods ended May 31, 2012 were $895,470 and $1,924,033, respectively. This represents an 18% decrease in cost from $1,086,683 in the three month period ended May 31, 2011, and a 14% decrease in cost from $2,248,859 in the six month period ended May 31, 2011. The decrease in R&D expense was the result of reduced clinical trial expenditures of approximately $220,000 and $460,000 in the three months and six months ended May 31, 2012, respectively, due primarily to fewer patients being screened/recruited during the first half of 2012 than during the first half of 2011. These reductions in expenses were partially offset by respective increases of $69,000 and $114,000 related to completion of the core portion of the Phase II SHIGATEC trial.

General and administrative (G&A) expenses for the three month and six month periods ended May 31, 2012 were $626,731 and $1,239,859, respectively. G&A expenses were stable when compared with $653,628 and $1,260,902 in the three months and six months ended May 31, 2011, respectively.

The Company recorded a net loss of $723,971 or $0.02 per share in the three month period ended May 31, 201 2, compared with $781,648 or $0.02 per share in the corresponding period in 2011. For the six month period ended May 31, 2012, the Company recorded a net loss of $1,559,225 or $0.05 per share, compared to $1,791,458 or $0.06 per share for the same period last year. The decrease in net loss is primarily due to the reduction in R&D expenses as well as higher foreign exchange gains recognized as a result of changes in the fair value of foreign exchange forward contracts. These gains were partially offset by lower collaboration and licensing revenues.

As at May 31, 2012, the Company's unrestricted cash position amounted to $6,630,885, which consists of cash and short-term investments. The Company's liquidity availability amounted to $7,065,170 compared with $8,533,803 on November 30, 2011. The decrease in liquidity is primarily due to the reduction of trade and other payables in addition to cash expenses related to operations for the six month period ended May 31, 2012, offset by Shigamabs^® development funding received from LFB. Furthermore, the Company's working capital amounted to $5,728,068 as at May 31, 2012, compared to $6,337,692 as at November 30, 2011, a decrease of $609,624 due primarily to activities related to the Company's first half of 2012 operations.

As of July 10, 2012, the Company had 32,194,566 common shares outstanding and a total of 3,676,450 stock options, following the issuance of 908,000 stock options on March 19, 2012.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TSX:TLN) is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. The Company's clinical programs include Shigamabs^® and TLN-4601, a novel anti-cancer therapy. Shigamabs^® is a dual antibody product being evaluated in a Phase II clinical trial for the treatment of Shiga toxin producing E. coli bacterial infections. Additional information about the Company can be obtained at [ www.thallion.com ].

Forward-Looking Statements

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking statements reflect Thallion's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, the satisfaction of conditions provided in the development and commercialization agreement with LFB, 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 Thallion's ongoing filings with the Canadian securities regulatory authorities which filings can be found at [ www.sedar.com ]. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Thallion undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.

Financial results included below:

Contributing Sources

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