Inex Releases 1998 Financial Results; Fourth Quarter Program to Focus on Key Products and Cut Costs Places Company on Track to Achieve 1999 Clinical and Financing Goals.

VANCOUVER, British Columbia--(BUSINESS WIRE)--March 31, 1999--A Fourth Quarter management initiative to cut non-core expenditures enabled Inex Pharmaceuticals Corporation ("INEX")(TSE:IEX) to focus on key product candidates likely to bring the earliest returns, according to the Company's 1998 unaudited operating results released today.

The Company reported a net loss of $13,469,572 ($1.24 per common share) for the fiscal year ended December 31, 1998. This is in line with management's expectations and compares with a net loss of $9,207,723 ($0.94 per common share) for the fiscal year ended December 31, 1997. The increase over 1997 is primarily related to clinical development expenditures on advancing two priority products and the non-cash amortization expenses of the acquisition cost of antisense assets purchased in March 1998. Cash and short-term investments at December 31, 1998 were $9,936,118.

Dr. James J. Miller, INEX's President and CEO, said the management initiative increased the Company's financial flexibility during the uncertain equity markets of 1998. Excluding one-time clinical development costs incurred in the fourth quarter of 1998, the Company is on target to achieve the objective of reducing annualized monthly expenditures to $700,000.

As a result, INEX is now in a stronger financial position from which to pursue its primary objectives for 1999:

-- To aggressively pursue a commercialization path for its lead

product Onco TCS, which has had promising interim results from an

ongoing Phase IIA trial as treatment for non-Hodgkin's lymphoma.

-- To raise equity financing to continue the company's transition

from its origins as a technology platform company to a focus on

moving key product candidates through clinical trials to

commercialization.

-- To file an Investigational New Drug (IND) application for

INXC-6295 in preparation for clinical trials.

Miller said INEX has decided to attempt to accelerate Onco TCS's development by asking the United States Food and Drug Administration to give fast-track development designation to the drug. The FDA gives this designation to drugs in Phase II clinical trials that target diseases for which no effective treatment is now available. INEX is requesting that a meeting be held with the FDA during the second quarter.

INEX estimates the market potential for large cell aggressive non-Hodgkin's lymphoma is in excess of $200 million U.S. per year. Drugs currently on the market to treat this type of non-Hodgkin's lymphoma have limited effectiveness and have significant side-effects.

If this fast-track designation is received, INEX could apply for marketing approval after completing a multi-centre clinical trial by late 2000 or early 2001, at least one year earlier than if a standard development path was required. This substantially reduces the development costs and thereby increases the value of Onco TCS to INEX for partnering with an international pharmaceutical company.

INEX is a Canadian biopharmaceutical company commercializing anti-cancer drugs that utilize proprietary drug delivery systems to increase effectiveness and reduce side-effects.

INEX PHARMACEUTICALS CORPORATION
Consolidated Statements of Loss
(Unaudited)
(Expressed in Canadian Dollars)

                    Three Months ended        Year Ended
                        December 31           December 31
                     1998       1997         1998      1997

REVENUE:
Research
 collaborations $(168,040)   $82,664     $850,565   $399,059
Interest and
 other income     196,310    240,165    1,037,992  1,209,549
Total Revenue      28,270    322,829    1,888,557  1,608,608

EXPENSES:
Research and
 development    3,821,398  2,137,930   13,310,889  8,987,910
General and
 administrative   384,692    576,345    2,047,240  1,828,421
Total Expenses  4,206,090  2,714,275   15,358,129 10,816,331

Net Loss       (4,177,820)(2,391,446) (13,469,572)(9,207,723)

Loss per share      (0.37)     (0.24)       (1.24)     (0.94)

Weighted average number
 of common shares
 outstanding   11,068,948  9,808,846   10,818,733  9,784,688


Consolidated Balance Sheets (Condensed)
(Unaudited)

                            December 31,     December 31,
                               1998             1997
ASSETS
Current
 Cash and short-term
  investments                $9,936,118      $26,533,612
 Other current assets           554,872        1,109,002
Total current assets         10,490,990       27,642,614
 Long-term investment           250,000          250,000
 Capital assets               4,639,767        4,296,247
 Medical Technology           8,981,996              --
 Total Assets                24,362,753       32,188,861

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
 Current liabilities          1,166,641        1,635,848
 Current portion of deferred
  lease inducements             111,120           96,275
Total current liabilities     1,277,761        1,732,123
 Deferred lease inducements     884,032          858,456
 Total liabilities            2,161,793        2,590,579
 Shareholders' equity        22,200,960       29,598,282
 Total liabilities and
  shareholders equity        24,362,753       32,188,861