MONTRÉAL, QUÉBEC--(Marketwire - Feb. 20, 2013) - Thallion Pharmaceuticals Inc. (TSX VENTURE:TLN) today announced its operational and financial results for the three-month and twelve-month periods ended November 30, 2012.

"This is a transformative period for Thallion as we explore new strategic opportunities that could benefit from our experienced team and our strong cash position and balance sheet," said Dr. Allan Mandelzys, Chief Executive Officer of Thallion Pharmaceuticals Inc. "The Special Committee of the Board is working closely with our external advisors to help identify and evaluate potential corporate opportunities, and to maximize the full value of our assets for the benefit of all shareholders."

Operational Highlights

• Terminated the development and license agreement related to the Shigamabs^® program with LFB Biotechnologies, subsequent to year end.
• Established a Special Committee comprised of independent directors of the Board to conduct both a strategic review of the Company and to identify and evaluate potential corporate opportunities, subsequent to year end. The Special Committee has engaged an investment bank to assist them in this process.
• Received positive binding Final Award from the International Chamber of Commerce International Court of Arbitration, concluding that all claims for damages by TLN-232 licensor, Expergen GmbH Drug Development, have been rejected, subsequent to year end.
• Voluntarily delisted from the Toronto Stock Exchange and commenced trading of its common shares on the TSX Venture Exchange on December 12, 2012, under the symbol "TLN".
• Announced the sale of Caprion Proteomics Inc, including Thallion's equity stake in the business, resulting in immediate cash proceeds of approximately $3.9 million, with the potential for future consideration of approximately $0.6 million, currently held in escrow.
• Completed the core study of the SHIGATEC Phase II trial and announced that the primary endpoint of safety and tolerability had been met.

Financial Highlights

Collaboration and licensing revenues for the three-month and twelve-month periods ended November 30, 2012, were $31,356 and $1,414,692 respectively, compared to $578,177 and $3,205,428 for the corresponding periods in 2011. The decreases in revenues are primarily due to the anticipated decline in research and development expenses related to clinical development of Shigamabs^®.

Research and development (R&D) expenses before tax credits for the three-month and twelve-month periods ended November 30, 2012 were $337,121 and $2,707,943, respectively. This represents a 79% decrease in R&D costs from $1,569,263 in the three-month period ended November 30, 2011, and a 44% decrease in R&D costs from $4,872,869 in the twelve-month period ended November 30, 2011. These decreases are primarily the result of the anticipated reduction in the SHIGATEC clinical trial expenditures as the majority of patient recruitment had been completed by January 2012 and the lower costs associated with the extension phase relative to the core phase of the study.

General and administrative (G&A) expenses for the three-month and twelve-month periods ended November 30, 2012 were $347,134 and $2,143,804, respectively, compared with $691,863 and $2,594,773 for the corresponding periods in 2011. These decreases are primarily the result of reversing the $276,404 balance of provision for litigation, as well as reduced legal fees for corporate related activities and ongoing cost reduction efforts.

The Company recorded a net loss of $513,771 or $0.02 per share in the fourth quarter of 2012 and net earnings of $1,649,545 or $0.05 per share in the twelve-month period ended November 30, 2012, primarily as a result of the $4,460,729 one-time gain recorded on the disposal of the Company's equity investment in Caprion Proteomics Inc.

Excluding this one-time gain, the Company recorded an adjusted net loss of $2,811,184 or $0.09 per share in 2012, compared with a net loss of $4,032,492 or $0.13 per share in 2011, reflecting a decrease of $1,221,008 or 30% year-over-year. This improvement in net loss is mainly attributable to reduced R&D expenditures based on completion of the core Phase II SHIGATEC study in January 2012, lower G&A expenditures and higher foreign exchange gains recognized in 2012 as a result of changes in the fair value of foreign exchange forward contracts, partially offset by the lower collaboration and licensing revenues.

As at November 30, 2012, the Company's unrestricted cash position amounted to $10,360,808, which consists of cash and short-term investments. The Company's liquidity availability amounted to $10,684,122 as at November 30, 2012, compared with $8,533,803 on November 30, 2011. Furthermore, the Company's working capital amounted to $10,705,174 as at November 30, 2012 compared to $6,337,693 as at November 30, 2011.

The increases in liquidity and working capital are primarily due to the one-time gain from the sale of the Company's equity investment in Caprion Proteomics Inc. in July 2012 as well as the Shigamabs^® development funding received from LFB, partially offset by the reduction of current liabilities and the use of cash related to operations in 2012. The Company believes that its cash position will be sufficient to finance its reduced research and development expenditures, operations and capital requirements for at least the next twelve months.

As of February 20, 2013, the Company had 32,194,566 common shares outstanding and a total of 3,676,450 stock options.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TSX VENTURE: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 Thallion 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, risks relating to the development of the Shigamabs^®clinical programand the outcome of the strategic review process. 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:

Publication Contributing Sources

• Market Wire