The first new grant will fund testing of an anti-cancer compound categorized as a caspase inducer. The second grant will fund testing of a drug candidate in oral mucositis, a serious side effect related to the treatment of cancer with chemotherapy or radiation.

The caspase inducer encompassed by the SBIR grant is one of a new class of antimitotic agents. These compounds are designed to induce the death of certain cancer cells by activating caspases, key enzymes that modulate and carry out the cellular signaling pathways involved in programmed cell death, also known as apoptosis. Maxim's caspase inducer was discovered using Maxim's proprietary high-throughput screening technology, a process that enables the identification of compounds that either inhibit or activate caspases. Early research suggests that the compound may activate caspases in tumor cells derived from a number of difficult to treat human cancers, including breast and prostate cancers, and may be effective in multi-drug resistant cell lines, suggesting that it has the potential to be useful in the treatment of drug-resistant cancers. Maxim will evaluate the compound's efficacy in a number of preclinical human cancer xenograft animal models. The company has identified a number of additional caspase-activator compounds through its high-throughput screening technology that are currently being evaluated as potential candidates for clinical testing. One of these compounds, MX2060, is being tested as a potential anti-cancer agent under an NCI SBIR grant issued in late 2000.

Maxim Pharmaceuticals is a biopharmaceutical company developing advanced drugs and therapies for cancer and infectious diseases. The company's immunotherapeutic drug candidate, Ceplene(TM) (histamine dihydrochloride, formerly Maxamine(R)) is currently being tested in two Phase 3 cancer clinical trials in 12 countries for advanced metastatic melanoma and acute myelogenous leukemia. Phase 2 trials of Maxamine are also underway for the treatment of hepatitis C and advanced renal cell carcinoma. The company has also developed product candidates based on its MaxDerm(TM) technology that are designed for the treatment of medical conditions for which topical therapy is appropriate such as oral mucositis, herpes, decubitus ulcers, shingles, burns and related conditions. Lastly, Maxim is developing small-molecule inhibitors and activators of caspases, key enzymes that modulate and carry out the cellular signaling pathways involved in programmed cell death, also known as apoptosis. Compounds that can either inhibit caspases or induce caspases may form the basis for important new drugs for a wide variety of disease targets, such as cancer, cardiovascular disease and other degenerative diseases.

This news release contains certain forward-looking statements that involve risks and uncertainties. Such forward-looking statements include statements regarding the efficacy and intended utilization of Ceplene, MaxDerm and the caspase modulator compounds, and regarding the Company's clinical trials. Such statements are only predictions and the Company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include the risk that products that appeared promising in early research and clinical trials do not demonstrate safety or efficacy in larger-scale clinical trials, and the risk that the Company will not obtain approval to market its products. These factors and others are more fully discussed in the Company's periodic reports and other filings with the Securities and Exchange Commission.