BIOXEL PHARMA REPORTS NET LOSS OF $3.5 MILLION FOR 9 MONTHS.

Bioxel Pharma Inc., Sainte-Foy, Quebec,(TSX Venture Exchange: BIP), a leading manufacturer of naturally derived taxanes and targeted oncology drugs, has released its results for the third quarter and nine month period ended September 30, 2003.

"A great deal of our focus in 2003 has been on putting the necessary elements in place so that we could expand our taxane manufacturing operation. We expect to reach this very significant milestone and begin mass production early in 2004 as the final pieces will be coming together during the fourth quarter," said Dr. Pierre Lacroix, president and CEO of Bioxel Pharma. "From the closing of our $9.5 million public financing last March through to the long-term supply agreement with a producer of intermediate taxanes and the purchase of specialized equipment for the industrial-scale purification of paclitaxel, we have paved the way for what promises to be a very encouraging 2004 and beyond."

Corporate Overview

After a slightly longer start-up period than expected, Atlantis BioActives Corporation recently began the large-scale production of intermediate taxanes. Consequently, Bioxel Pharma has received its initial deliveries of crude taxanes with a few months delay. The corporation has also finalized the purchase of all its paclitaxel purification equipment from a specialized U.S. supplier, with delivery expected by the end of 2003. This large-scale purification equipment should be installed and fully operational in the first quarter of 2004, providing the corporation with a yearly manufacturing capacity of more than 100 kilograms of cGMP pure paclitaxel.

To support its large-scale taxane manufacturing project, the corporation has agreements providing it with Canada yew harvesting rights covering approximately 221,000 km2 of public and private land in Quebec. These harvesting rights, on one of the world's largest natural reserves of taxanes, represent a key asset for the corporation.

To help oversee the management of this important asset, the company established a special biomass supply committee that will report directly to the board of directors. The committee's mandate is to ensure that Bioxel obtains a safe supply of Canada yew, while applying rigorous biomass management principles in the context of long-term sustainable development of the asset.

The company approved the granting of a total of 25,000 stock options at an exercise price of $0.70 each to the members of the special biomass supply committee.

Financial Overview

For the nine-month period ended September 30, 2003, the corporation reported a net loss of $3.5 million ($0.08 per share). This result compares with a net loss of $3.2 million ($0.11 per share) for the corresponding period of 2002. The corporation had working capital of $4.4 million as at September 30, 2003, compared with a working capital deficiency of $254,000 on December 31, 2002.

In March 2003, the corporation completed a public offering of 13,571,429 common shares at an issue price of $0.70 per share, representing total proceeds of $9.5 million.

Sales of cGMP paclitaxel amounted to $184,000 for the first nine months of 2003, compared with $953,000 for the same period last year. The decrease in revenues is due to delays in the start-up of the large-scale manufacturing of crude taxanes carried out by our Canadian supplier.

Manufacturing costs totalled $1.2 million for the nine months ended September 30, 2003, compared with $2.3 million for the same period last year. This decline is largely due to a substantial reduction in taxane manufacturing operations because of a limited availability of crude taxanes. The lower crude taxane manufacturing costs were also caused by the delayed start-up of large-scale production by Bioxel's supplier. Finally, the corporation had to scale back its cGMP paclitaxel purification activities in Sainte-Foy, Quebec, leading to a decline in expenses.

Selling expenses amounted to $340,000 for the nine-month period ended September 30, 2003, compared with $313,000 for the corresponding period last year. This increase is attributable to intensified market development efforts in Europe and the United States, coupled with a subsequent rise in related expenses.

Administrative expenses totalled $1.1 million for the nine months ended September 30, 2003, compared with $1.0 million for the same period last year. This increase is mainly due to the additional expenses arising from being a publicly traded corporation, hiring a clerical worker, and leasehold improvements at the company's new Sainte-Foy address.

Financial expenses amounted to $596,000 for the first nine months of 2003, compared with $142,000 for the corresponding period last year. The increase is related to interest costs on the convertible debentures issued in July 2002.

Amortization expenses totalled $381,000 for the nine months ended September 30, 2003, compared with $426,000 for the equivalent period the prior year. This decrease is due to reduced amortization of taxane extraction and purification process development expenses.

Bioxel's operating activities used cash of $2.6 million during the first nine months of 2003, compared with $2.7 million in the same period a year earlier. This decrease is due to lower manufacturing costs, specifically crude taxane supply costs.

Capital expenditures were $1.1 million in the first nine months of fiscal 2003. Major fixed assets related to the development and industrial scale-up of the purification process as well as the purchase of specialized equipment for the large-scale purification of paclitaxel. The corporation also invested $254,000 to acquire other assets in order to market its products.

Financing activities provided $7.9 million during the nine-month period ended September 30, 2003. This cash stems from the $9.6 million in proceeds arising from the issuance of common shares less the share issue costs of $1.2 million, the repayment of the $500,000 loan from La Financiere du Quebec, and a $90,000 repayment of the bank loan. The corporation had $2.9 million in cash as at September 30, 2003, compared with $803,000 on September 30, 2002.

Corporate Profile Bioxel Pharma Inc. is an emerging leader in biopharmaceuticals, focused on developing, manufacturing and marketing naturally derived taxanes, including paclitaxel. Taxanes are used in the development of therapeutic drugs for the treatment of cancer and other diseases, including psoriasis, rheumatoid arthritis, Alzheimer's disease and in the avoidance of cardiovascular disease through the use of drug-coated stents. The corporation produces cGMP paclitaxel and is building a platform of other taxane-based drug candidates such as taxane analogs, proprietary formulations and immunoconjugates targeting various cancers and multi-drug resistant tumors.

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