CANGENE REPORTS EARNINGS OF 52 CENTS PER SHARE FOR FISCAL 2004.

Cangene Corporation, Toronto, has reported results for the year ended July 31, 2004. Revenues for the year were $156.9 million, down $29.3 million or 16% from fiscal 2003. Revenues were impacted by the continued strength of the Canadian dollar and decreased activity at the company's Chesapeake Biological Laboratories, Inc. subsidiary during the current year. Net income for fiscal 2004 was $32.5 million or $0.52 per share compared with $40.1 million or $0.67 per share a year earlier. In addition to the reasons noted above, decreased earnings for the year reflect an increase of $7.5 million in research and development spending that resulted from intensified product development activities.

"This was a very good year for us. We entered several government contracts to develop new biodefence products and we expanded our distribution agreements. We also stepped up our investment in research and development, which advanced several products, including the submission of two for regulatory review," said Dr. John Langstaff, president and chief executive officer of Cangene.

Revenues consist of product sales, contract research and manufacturing sales, and other income. A portion of the company's research revenue derives from a research and development agreement with Apotex Inc.

Research expenses for the year ended July 31, 2004 rose to $25.6 million, a 42% increase over $18.1 million spent in the year ended July 31, 2003. Selling, General and Administrative expense of $9.7 million for the year is $2.7 million lower than last year primarily due to reduced sales and marketing costs.

Cash at July 31, 2004 was $4.0 million, compared to $6.3 million at July 31, 2003. Long-term debt has been reduced by $27.8 million during the year.

The company achieved substantial product and strategic developments since the start of the fiscal year.

Product development highlights include the following:

- submitted LEUCOTROPIN(R) (GM-CSF) to Health Canada,

- submitted Vaccinia immune globulin to the U.S. Food and Drug Administration (FDA) and received Fast Track designation,

- began a clinical study to assess the use of WinRho(R) SDF for treating dengue hemorrhagic fever,

- partnered with Canadian and U.S. governments for development of biodefence products.

Strategic highlights:

- entered marketing and distribution agreement with BioGeneriX AG for European distribution of Cangene's human growth hormone,

- announced change in U.S. distributor for WinRho(R) SDF to align European and U.S. distribution,

- made changes to board of directors and management team, including the appointment of a new CFO.

Cangene is one of Canada's largest biotechnology companies. It was founded in 1984 and is headquartered in Winnipeg, Manitoba. Cangene carries out research and development in Mississauga, Ontario and Winnipeg. It uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. In addition to two approved products, Cangene now has three products that have been submitted for regulatory review, and a significant clinical trial program including human growth hormone, which is nearing regulatory submission. Cangene is also expanding its contract research and manufacturing business using its drug-manufacturing expertise and the resources of Chesapeake Biological Laboratories, Inc. (a wholly-owned subsidiary). The company's internationally-compliant manufacturing facilities are located in Winnipeg, Manitoba and Baltimore, Maryland.

For more information, http://www.cangene.com and http://www.cblinc.com or call 905/405-2900.