• Continued to enroll patients in US FDA fast-tracked Phase III clinical trial of MBI 226 and Phase II trial of MBI 594AN
• Granted two patents covering the compositions of 46 novel peptides and their chemical derivatives designed for unique activity against bacteria and fungi

• Announced executive appointments to strengthen the company’s management team
• Appointed Ken Galbraith, former Executive V.P. and Chief Financial Officer of QLT Inc., to the Board of Directors

"Fiscal 2001 was a year of significant progress as we advanced our two leading drug candidates through clinical trials," said William (Bud) Foran, Chairman and CEO of Micrologix. "In the next two weeks, we will enroll the final patients in our Phase II trial for MBI 594AN, a compound that treats acne. We expect to complete this study in September and results should be available before the end of November. Recent positive preclinical data, showing the significant anti-inflammatory activity of our peptides, further support MBI 594AN as an effective acne treatment. As for our Phase III trial of MBI 226 (a drug designed to prevent catheter-related bloodstream infections), patient enrollment should be completed by the end of 2001 and we expect to file a New Drug Application for U.S. marketing approval in the second half of 2002."

"While our search for a new CEO is taking longer than expected, we are confident that our prudent approach will help us identify the right leader to guide Micrologix and build on the Company’s strengths. The year ahead will be an exciting one as we continue to build solid relationships with potential strategic partners and advance our clinical and research programs," Mr. Foran concluded.

For the three months ended April 30, 2001, Micrologix reported a loss of $4.3 million or $0.11 per share, compared to $3.0 million or $0.10 per share for the same period in 2000. The loss for the twelve months ended April 30, 2001 was $11.7 million or $0.31 per share, compared to a loss of $8.7 million or $0.34 per share for the same period in 2000.

Interest income for the twelve months increased to $3.2 million compared with $1.0 million in 2000, due to higher rates of return and higher average cash reserves. Total operating expenses for the twelve months increased 54 percent to $14.9 million compared with $9.7 million in 2000. The increase in operating expenses and loss is due to the advancement of the Company’s drug candidates to later-stage clinical trials: MBI 226 for preventing central venous catheter-related bloodstream infections in Phase III and MBI 594AN for treating acne in Phase II. Research and development expenses for the twelve months increased 61 percent to $11.1 million compared with $6.9 million in 2000. Clinical development program costs represented $7.3 million (2000: $3.5 million) or 65 percent (2000: 50 percent) of research and development expenses.

There are currently 39,374,059 common shares (April 30, 2001: 39,359,059) issued and outstanding.

The Company’s Annual General Meeting will be held on September 6, 2001 at 2:00 pm. in the Cheakamus Room at the Waterfront Centre Hotel, Vancouver, British Columbia. The record date is July 31, 2001.

Micrologix develops novel drugs targeted at severe and life-threatening diseases — particularly those caused by antibiotic-resistant bacteria. The Company’s portfolio of antibiotic drug candidates is based on improved analogs of naturally occurring cationic peptides found in the host defense systems of most life forms. Micrologix currently has two drugs in clinical trials in the United States: MBI 226 for preventing catheter-related bloodstream infections in Phase III and MBI 594AN for treating acne in Phase II. The Company’s common shares are included in the TSE 300 Composite Index.