Thallion Pharmaceuticals Inc.
TSX : TLN

Thallion Pharmaceuticals Inc.

January 17, 2008 07:00 ET

Thallion Resolves Dispute With CAP-232 Licensor

MONTREAL, QUEBEC--(Marketwire - Jan. 17, 2008) - Thallion Pharmaceuticals Inc. (TSX:TLN) today announced the resolution of the outstanding dispute with its licensor of CAP-232, Expergen Drug Development GmbH of Austria. A settlement agreement was signed by both parties and, subject to certain normal closing conditions, is effective immediately.

"We have settled this dispute to avoid unnecessary legal expenses and distraction," said Lloyd M. Segal, Chief Executive Officer of Thallion. "With the certainty that this settlement provides, we now have an unfettered ability to move forward with the planned development of CAP-232."

Pursuant to the agreed settlement, mutual legal actions and claims by Thallion and Expergen have been withdrawn without further recourse. In exchange for guaranteed and contingent (milestone-based) consideration, potentially totaling _275,000 (C$418,880) and 150,000 common shares of Thallion, Expergen has agreed to dismiss its claims and effectively transfer management of the license to its master licensor, Biostatin Research and Development Ltd., with which Thallion has maintained a longstanding collaboration. All other terms of the original license agreement remain in force. The Company will take a one-time charge in respect of the settlement that will be further detailed in Thallion's upcoming annual disclosures.

About CAP-232

CAP-232 is a novel seven amino-acid peptide with potential efficacy in multiple oncology indications that targets pyruvate kinase M2 (M2PK), a protein shown to be over-expressed in a number of different tumour types. M2PK is involved in tumour cell glycolysis, a process by which cancer cells generate the energy required for their rapid growth in the absence of oxygen. In the previously completed Phase II trial in metastatic melanoma patients CAP-232 achieved a 31% response rate, including an 8% partial response rate. CAP-232 is currently being evaluated in a Phase II trial in patients suffering from renal cell carcinoma who have failed to benefit from the current standard of care.

About Thallion Pharmaceuticals Inc.

Thallion Pharmaceuticals Inc. (TSX:TLN) is a biotechnology company developing pharmaceutical products in the areas of infectious disease and oncology. Thallion has three active clinical programs at a Phase II, or later, stage of development which include: Shigamabs®, a dual antibody product for the treatment of Shigatoxin-producing E. coli bacterial infections; ECO-4601, a novel anti-cancer therapy derived from a nonpathogenic microorganism; and CAP-232, a targeted therapy with potential efficacy in multiple oncology indications. Additional information about the Company can be obtained at www.thallion.com.

Forward-Looking Statements

This press release contains certain forward-looking statements, including, without limitation, statements containing the words "believe", "may", "plan", "will", "estimate", "continue", "anticipate", "intend", "expect" and other similar expressions which constitute "forward-looking information" within the meaning of applicable Canadian securities laws. Forward-looking statements reflect the Company's current expectation and assumptions, and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These forward-looking statements involve risks and uncertainties including, but not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time-to-time in the Company's ongoing filings with the Canadian securities regulatory authorities which filings can be found at www.sedar.com. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements either as a result of new information, future events or otherwise, except as required by applicable Canadian securities laws.

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