IBEX Reports Fiscal 2005 Financial Results, Company Provides Update on Cancer and Arthritis Programs.

MONTREAL -- IBEX Technologies Inc. (TSX:IBT), a Montreal-based biopharmaceutical company, today reported its financial results for the fourth quarter and fiscal year ended July 31, 2005. All figures are in Canadian dollars unless otherwise indicated. The Company also provided an update on its research and development activities for its cancer and arthritis programs.

"In fiscal 2005, we made strong progress with our kallikrein-based cancer program, both in the development of diagnostic tests and in our therapeutic research activities. We have now launched two new kallikrein ovarian cancer assays for the R&D community, and are in the process of evaluating samples from large cancer tissue banks on behalf of several diagnostic companies. These evaluations have led to the commencement of licensing negotiations regarding the incorporation of kallikreins into clinical diagnostic tests. Successful negotiations could lead to the development of one or more diagnostic tests for the detection or monitoring of certain important cancers. On the therapeutic side, in conjunction with researchers at the Ottawa Regional Cancer Centre, we initiated and completed the first of our planned in vivo studies examining the effect of kallikreins in animal models of ovarian cancer. Preliminarily results were encouraging, and the novelty of the findings warrants filing a patent application. We look forward to the continued advancement of these various studies," said Paul Baehr, President and CEO of IBEX Technologies Inc. "With more than seven million dollars in cash and equivalents as at our fiscal year end, we are sufficiently funded to continue advancing our research and development activities into 2007."

"We are also pleased with the sales growth from our arthritis diagnostic and glycobiology enzyme products. With the ongoing rollout of our next generation arthritis assays, and our recent international distribution agreements with Associates of Cape Cod Inc. and Prozyme Inc. to market our enzymes, we expect positive sales momentum for both product lines to continue," added Mr. Baehr.

Financial Results

Revenue for the fourth quarter of fiscal 2005 increased 11% to $754,000 compared to $648,000 in the fourth quarter of fiscal 2004. Sales of the Company's arthritis diagnostic products for the three months ended July 31, 2005 increased 30% compared to the fourth quarter a year ago. Sales of IBEX enzyme products in the fourth quarter of 2005 increased 12% compared to the same period a year ago.

Net loss for the fourth quarter of 2005 was $847,000 or ($0.04) per share, compared with a net loss of $225,000 or ($0.01) per share in the same period a year ago. The Company's increased net loss in the period was primarily attributable to increased selling, general and administrative expenses and costs of goods sold, and a future income tax recovery in 2004.

Revenue for the fiscal year ended July 31, 2005 increased 17% to $1.9 million compared to $1.6 million in fiscal 2004. IBEX recorded $306,000 in research tax credits as revenue in 2005 as compared to $266,000 in research tax credits recorded as revenue in fiscal 2004. Sales of the Company's arthritis diagnostic products for the fiscal year ended July 31, 2005 increased 27% from fiscal 2004, while sales of IBEX enzyme products for 2005 increased 10% year-over-year. Excluding the effects of exchange loss in converting U.S. dollar sales to Canadian currency, sales of the Company's arthritis and enzymes products increased by 38% and 18% respectively over fiscal 2004.

Net loss for fiscal 2005 was $4.0 million or ($0.18) per share, compared to a net loss of $2.9 million or ($0.14) per share in 2004. The Company's increased net loss for fiscal 2005 is primarily attributable to increased selling, general and administrative expenses and costs of goods sold, decreased investment income, and a future income tax recovery in 2004; partially offset by a decreased foreign exchange loss and an overall increase in revenue, compared to fiscal 2004.

At July 31, 2005, IBEX held $7.2 million in cash, cash equivalents and marketable securities compared to $11.3 million in cash, cash equivalents and marketable securities as at July 31, 2004.

Financial Summary ($000s, except per share and share amounts)
Fiscal years ended July 31,

                                         2005               2004
                                        ------------------------
Revenues                               $1,893             $1,624
  Sales                                $1,587             $1,358
  Research Credits                       $306               $266
Net loss$                             $(3,978)          $(2,892)
Loss per share                         $(0.18)           $(0.14)
Cash, cash equivalents                  $7,180           $11,336
and marketable securities
Number of shares outstanding        23,070,058        21,453,872

Research and development expenses for the year ended July 31, 2005 totaled $2.2 million, which was essentially flat compared to fiscal 2004. Selling, general and administrative expenses and cost of goods sold for fiscal 2005 increased to $3.6 million from $2.4 million in fiscal 2004, primarily as a result of expenses related to: successfully defending an unsolicited hostile takeover bid by a third party, the cost of manufacturing enzymes, and business development consulting services.

Cancer Program

IBEX's cancer research program is focused on: i) evaluating the value of kallikreins in cancer, with the goal of discovering new and improved treatments; and, ii) developing diagnostic tests to measure abnormal kallikrein levels in blood for disease prognosis and monitoring. This program is based principally on the work of Dr. E. Diamandis and colleagues at Toronto's Mt. Sinai Hospital whose published studies have observed that elevated expression of hK6 and hK10 in ovarian cancer correlated with poorer prognosis and patient survival.

Therapeutics

In May 2005, IBEX, in conjunction with researchers at the Ottawa Regional Cancer Centre, completed the first of its planned in vivo studies examining the effect of kallikreins in animal models of ovarian cancer. Preliminarily results were encouraging and sufficiently novel to warrant the filing of a patent application. Additional studies are ongoing and results are expected to be available by early 2006. These additional results will assist us in determining whether to pursue a drug development candidate in this area - further capitalizing on our kallikrein related technologies.

Diagnostics

IBEX and its collaborators at Mt. Sinai Hospital in Toronto, completed the assay phase of an evaluation of several large proprietary serum sample banks from important clinical diagnostic companies. Data from these studies suggest significant utility as cancer markers and negotiations have been initiated with diagnostic companies regarding the licensing of one or more kallikreins for use as clinical diagnostics.

Three separate studies of IBEX's kallikrein assays were completed in fiscal 2005: a 500 patient ovarian cancer study in collaboration with Hamamatsu University Medical School in Japan; a 100 patient ovarian cancer study at the Fred Hutchison Cancer Research Center in Seattle; and, a 500 patient multi-cancer study at Mt. Sinai Hospital in Toronto. The studies focused on determining the utility of the assays in cancer diagnosis and monitoring.

Since the end of fiscal 2004, IBEX has released two kallikrein based assays (hK6 and hK10) for sale to the research community.

Arthritis Program

IBEX's arthritis program is based on the study of molecules in blood that are by-products of cartilage degradation and synthesis. The objective is to develop novel assays for the medical research community to assist in discovery of new therapeutics, and to explore whether our tests can provide help to physicians in the detection and monitoring of arthritis patients. IBEX's osteoarthritis and rheumatoid arthritis biomarker assays are currently being used by many pharmaceutical companies in both animal and human trials. IBEX is currently selling four such assays.

During fiscal 2005, IBEX completed the development of a next-generation CS846 assay for the measurement of fetal aggrecan. Aggrecan is a major component of cartilage. Fetal aggrecan is present in adults with early osteoarthritis and rheumatoid arthritis. This new assay, FA-846(R), is expected to have significant utility within the research community in the conduct of animal studies, and in human clinical studies.

IBEX is now working on improved versions of its already-marketed C2C and CPII arthritis assays, and expects to release these next-generation assays for sale to the research community in the fourth quarter of calendar 2005 and the first quarter of calendar 2006. C2C is an assay for the measurement of increased collagen degradation and is initially targeted for osteoarthritis applications. CPII measures the synthesis of type II collagen and is initially targeted for diagnosis of early rheumatoid arthritis. The new versions of these assays will provide enhanced sensitivity and reliability.

Over the past year, IBEX has collaborated on three important studies: i) an osteoarthritis study at Northwestern University, in Chicago; ii) a rheumatoid arthritis study at the University of Utrecht; and, iii) an osteoarthritis study at St. Thomas' Hospital in London, England. Preliminary results from the first two studies were presented in October 2004 at the American College of Rheumatology meeting in San Antonio, Texas, and results from the St. Thomas Hospital study are expected prior to December 31, 2005. Results from the studies to date, indicate that certain of the assays may be useful in predicting disease progression. As such, certain of these assays may have potential utility as tools for researchers seeking to more effectively select patients for clinical trials.

During the past year data were presented by Centocor Inc. (marketers of the anti-arthritic compound Remicade(R)) which looked at the levels of biomarkers in a subset of patients from the ASPIRE(R) study, the largest trial ever in early Rheumatoid Arthritis. Results indicated that at least one of the IBEX biomarkers, C2C, tracked well with the most important of the clinical endpoints.

While the studies conducted thus far point to the usefulness of these assays for the research market, these same studies point out that considerable development work will be required to demonstrate their utility for the large patient diagnosis and therapeutic monitoring market.

About IBEX Technologies

IBEX Technologies (TSX:IBT) is a Montreal-based biopharmaceutical company focused on the development of therapeutics and diagnostics for the management of cancer and arthritis. The Company also markets a series of proprietary enzymes (heparinases and chondroitinases), including IBEX(TM) Heparinase I which is used in medical devices monitoring hemostasis in a broad range of clinical settings. The Company's cancer program is based on a novel family of genes known as kallikreins. IBEX is exploring the role of kallikreins in metastatic disease, as well as developing diagnostics to measure abnormal kallikrein levels in blood. The Company's arthritis program involves a series of biomarkers of cartilage degradation and synthesis. IBEX arthritis assays are currently being used by several leading pharmaceutical companies for research purposes. For more information, please visit the Company's Web site at www.ibex.ca.

Safe Harbour Statement

All of the statements contained in this news release, other than statements of fact that are independently verifiable at the date hereof, are forward-looking statements. Such statements, based as they are on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. Some examples of known risks are: the impact of general economic conditions, general conditions in the pharmaceutical industry, changes in the regulatory environment in the jurisdictions in which IBEX does business, stock market volatility, fluctuations in costs, and changes to the competitive environment due to consolidation or otherwise. Consequently, actual future results may differ materially from the anticipated results expressed in the forward-looking statements. IBEX disclaims any intention or obligation to update these statements.

IBEX TECHNOLOGIES INC. (TSX:IBT)