BCY LifeSciences Reports First Quarter Results.

Business Editors

TORONTO--(BUSINESS WIRE)--Aug. 24, 2001

BCY LifeSciences Inc. (CDNX:BCY.)

Acceptance to Start Phase I Clinical Trial Received

BCY LifeSciences Inc. (CDNX:BCY.) today reported results for the three-month period ended June 30, 2001.

Results for the first quarter of fiscal 2002 show a net loss for the period of $939,584 or $0.11 per share, versus a net loss of $330,459 or $0.04 per share for the corresponding quarter in fiscal 2001. The increased loss reflects the continuing investment in research and development of the Company's technologies for lung disorders, including expenses for pre-clinical evaluation, formulation development and toxicology studies. Patent-related expenditures also contributed.

Since the end of the fiscal year there have been several significant events. Early in the first quarter the Company closed the financing started near the end of the last fiscal year, raising one million dollars to help finance toxicology studies and fund the Phase I clinical trial for DCF 987 due to start in Q II, 2001. DCF 987 is being developed for respiratory diseases including Cystic Fibrosis (CF) and Chronic Obstructive Pulmonary Disease (COPD). The Company contracted Allied Clinical Research in April to conduct the Phase I trial on our behalf. The Company then worked with Allied, a team of specialized consultants and BCY's Pulmonary Advisory Board to develop the protocol for the Phase I trial. The toxicology studies and formulation work was also successfully completed as announced by the Company in early July.

In June, the Company's Phase I team met with the Therapeutics Products Program (TPP) in Ottawa to review Investigational New Drug (IND) needs, in preparation for our filing, which took place mid July. The Company has now received the needed acceptances from TPP to proceed with human clinical trials and will begin the Phase I trial shortly as soon patients recruitment is finished.

Further to the finalization of DCF 987 as the Company's lead compound, the Board approved a management recommendation that the first milestone obligation be honoured. As called for in the licensing agreement, 250,000 common shares were issued to the consortium that includes SYNSORB Biotech, Novadex Pharmaceuticals, The University of Alberta and The University of British Columbia.

Lorne Meikle, President & CEO stated: "The entire team at BCY and the Board of Directors are enthusiastic with the achievements during our first quarter and the subsequent events. We are now looking beyond Phase I towards Phase II. Our progress is significant."

STATEMENT OF OPERATIONS
Period ending June 30, 2001

------------------------------------------------------------
                               Three months     Three months
                                     ending           ending
                                   June 30,         June 30,
                                       2001             2000
                                          $                $

Revenue                               9,852           24,399
-------                             -------          -------

Expenses
--------
Research and Development            738,300          142,340
G&A                                  36,109           28,639
Salaries & Benefits                  46,944           31,866
Amortization                         40,625           40,625
Investor Relations                   35,677           11,233
Professional Fees                    20,797           37,683
Patent costs                         12,817           20,828
Corporate Governance                  2,231            3,781
Travel                                6,003           13,464
Total expenses                      939,584          330,459
                                    -------          -------

Net loss for period                 929,732          306,060
                                    -------          -------

Deficit at end of period          3,118,909          618,904

Loss per common share                  0.11             0.04
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About BCY LifeSciences

BCY LifeSciences Inc. is a Canadian development stage biopharmaceutical company dedicated to acquiring and developing innovative pharmaceutical products or technologies that serve unmet medical needs and that offer near term licensing opportunities with reduced scientific/clinical risk. The company's initial technologies are targeted toward developing products for respiratory disease, including Cystic Fibrosis and COPD.

Copies of all press releases and other facts on the Company are available on the Web site at www.BCYLifeSciences.com.

WARNING: The Company relies on litigation protection for "forward-looking" statements. This press release may contain certain forward-looking statements. Actual events or results may differ from the Company's expectations.

The Canadian Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this statement.