ProMetic Life Sciences Inc. Annual Report 2006

FY2006 Annual Report · ProMetic Life Sciences Inc.

Loading PDF…

prometic.com

Closing the gap

PROMETIC LIFE SCIENCES INC. 2006 ANNUAL REPORT

between perception

2006 Highlights
Message to Shareholders
ProMetic BioSciences Inc.
ProMetic BioTherapeutics, Inc.
ProMetic BioSciences Ltd
BSafE Innovations Inc.
Management’s Discussion and Analysis of Operating Results and Financial Position
Consolidated Financial Statements
Notes to Consolidated Financial Statements

1
4
10
14
18
22
25
37
41

The Annual Shareholders Meeting of ProMetic will be held on 2 May 2007,
at 10:30 a.m. at the Museum of Fine Arts, Montreal, Quebec.

e
m
s
i
h
p
a
r
G
|

s
n
o

i
t

a
c
i
n
u
m
m
o
C
|

.
c
n

3
G
C

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

and reality

In 2006 a number of important milestones in the
progress of ProMetic Life Sciences were reached.
Remarkably positive ongoing developments are
positioning ProMetic for near-term proﬁtability.
With goals achieved in the marketplace, the
laboratory and in clinical trials, the projections
for the year ahead are:

• Two of ProMetic’s

business units reaching
a cash neutral position
with possible revenues
of $15 million;

• ProMetic’s proprietary

process for plasma
fractionation to be
licensed in Europe
and Asia;

• Potential value created

in clinical trials by
ProMetic’s two lead
drug candidates.

• ProMetic and its

manufacturing partner
MacoPharma as the ﬁrst
company in the world
with a medical device
on the market that can
remove prions from
human blood; and

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

catalysts for

growth

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

• Proprietary

technologies and
proven products

• World leader in new

plasma fractionation
processes, biopharma-
ceutical puriﬁcation,
and pathogen removal

• A pioneer in strictly

focused therapeutic
advance in hematology
and oncology

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Pierre Laurin
President & CEO

In 2006, on each and every front where our scientists
were engaged, ProMetic moved forward impressively.
We enjoyed continued and growing success in relation
to the worldwide recognition and application of our
proprietary technologies. At the same time, meaning-
fully for the Company’s future, our two lead thera-
peutic compounds made signiﬁcant progress in their
development process.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Message to Shareholders

The year was distinguished by our methodical achievement of milestones, and the commercial fruition
of past investments. In the marketplace ProMetic won contracts and entered agreements that should
bring two of our business units to near term proﬁtability and the promise of substantial forthcoming
revenues. Years of rigorous development and patient investment have taken our business model to the
point of major break-out growth.

Organizationally, we delivered on the undertaking made late in 2005 to restructure the Company into
distinct business units. We have systematically executed on those plans with clear beneﬁt to operational
efﬁciency and product focus.

Who would suspect, given all the foregoing, that ProMetic endured a difﬁcult year? Yet 2006 was
precisely that for your Company: a year in which we were distracted by litigation and held back by
delay. As a consequence, notwithstanding the realized and inherent value in the Company, our share
price remained low. The market reacted to the perception that ProMetic was entangled in potentially
damaging circumstances relating (for a second year) to the insolvency of our partner Hemosol. Additionally,
we endured a postponement in the introduction of our prion capture device in Europe.

Thus it is no exaggeration to say, with metaphorical accuracy, that in 2006 ProMetic navigated through
a perfect storm. But we did so while preserving our assets and consolidating our commercial position.
We began the autumn with a decisive victory in court with respect to the Hemosol matter. The judgement
totally vindicated our position and afﬁrmed our unfettered right to license our plasma technology to
other North American partners for the production of hyperimmune products. At the same time, all
obstacles to European regulatory approval for the P-Capt™ ﬁlter were deﬁnitively surmounted and the
device was CE marked, representing a momentous milestone on the path to market launch.

The substance of our achievements was highlighted by the votes of conﬁdence we received in 2006
from some of the most prominent institutional investors in the world. Institutional investors examine the
foundation of a company, the value at its core – its catalysts for growth. With an investment in ProMetic,
these investors endorsed the wisdom of our overall business strategy, our technology platforms, and
most particularly the potential of our therapeutic program.

In many respects then, 2006 was a transition year for ProMetic, and ultimately a turnaround year.
Investors saw us undergo adversity and emerge stronger from it. They now see a company that has
been tested – and a management team seasoned – by crisis. Going forward we fully expect the market’s
sentiment to alter dramatically, as attention shifts from the setbacks in our past to the unfolding promise
of our future.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MESSAGE TO SHAREHOLDERS
(CONTINUED)

ProMetic BioSciences Inc. (“PBI”)
Therapeutics Unit

HEAL

PBI’s two lead candidate drugs, both with distinct mechanisms of action, continued through their development
process in 2006. They represent blockbuster potential in terms of near-term partnership value and long-
term revenue generation.

During the year, PBI received regulatory authorization to begin a Phase Ib/II clinical trial of PBI-1402,
a synthetic drug aimed at treating patients with anemia. We have since then begun enrollment of
patients in Canada and Europe. The Company was granted regulatory approval by Health Canada
for the expansion of our PBI-1402 clinical program to include the treatment of patients with anemia
caused by chemotherapy and of anemic patients with Chronic Kidney Disease (“CKD”) undergoing
renal dialysis.

Nearly half of erythropoietin (“EPO”) sales in the USA are for CKD patients. And it is estimated that
as much as 60% of EPO use in CKD patients is for 10%-15% of CKD patients requiring a high dose of
EPO to maintain their level of hemoglobin above 10g/liter of blood; below that level, a blood
transfusion is required. The objective of this study is to evaluate the effects of PBI-1402 in patients with
CKD who are on renal dialysis and treated with high doses of EPO. The trial is designed to monitor
the safety and tolerability of PBI-1402 in this particular patient population and whether PBI-1402 has
additive effects when combined with EPO.

Our compound for the potential treatment of various cancers, PBI-1393, has an excellent safety proﬁle
and is now proceeding with an offshore clinical trial in advanced cervical cancer. Importantly, PBI-1393
could qualify for orphan drug status in the U.S.

For both 1402 and 1393, our initial objective is to demonstrate safety and clinical efﬁcacy in Phase II
patients. A large number of pharmaceutical companies have taken in-depth interest in PBI-1402. If we
achieve good indications of efﬁcacy in the clinical trial, major partnering events will almost certainly
ensue. It is our intention to partner the development of the drug, rather than sell it ourselves. And with
the revenues we anticipate obtaining, we will ﬁnance development of other highly promising compounds
in hematology and oncology that we have at the pre-clinical stage.

Recently, PBI-3941 was discovered; it is ProMetic’s lead preclinical hematopoiesis compound. It targets
neutropenia, a condition where white blood cell counts are lower than normal. In preclinical studies,
PBI-3941 demonstrated an increase in neutrophil count, thus conﬁrming that ProMetic scientists have
identiﬁed a new class of compounds that can provide the discovery of many ‘ﬁrst in class’ drugs for
various hematological disorders. These potential drugs have the advantage of reduced cost in comparison
with recombinant protein drugs currently on the market.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

EXTRACT

ProMetic BioTherapeutics, Inc. (“PBT”)
Plasma Technologies

The Plasma Protein Puriﬁcation System (“PPPS”) was originally developed in a co-venture between
ProMetic and the American Red Cross. PBT owns an exclusive license to use the PPPS technology, as
well as a license to manufacture and sell any products derived from the PPPS technology. In 2006, all
of the assets of PPPS to manufacture therapeutics from plasma were consolidated into PBT. In addition,
all scientists of the American Red Cross who were core to the project formally joined PBT. This was just
one organizational milestone of the unit’s new beginning. In line with our restructuring plans in
July 2006, PBT also became a stand-alone corporation, headquartered in the U.S.

The subsidiary’s inauguration as a U.S.-based company was made auspicious by two key events on
the commercial side. First, PBT began a collaboration on protein recovery from plasma with Sartorius
AG, a supplier to the biotech and mechatronics sectors. Then it signed an exclusive license agreement
with Nabi Biopharmaceuticals (“Nabi”).

The latter agreement provides Nabi with access to PBT’s proprietary process technology to enable the
large-scale manufacture of selected plasma-derived hyperimmune products (vaccines). Milestone payments
over the next few years could reach US$18 million (if all product options are exercised). In addition,
Nabi would pay PBT royalties on its product sales and also purchase afﬁnity resins. This transaction
was at the centre of the Hemosol-related court action mentioned above. In the court action, the Plan
Purchaser of Hemosol claimed that any beneﬁt from the Nabi transaction belonged to Hemosol, and
that the Nabi-ProMetic transaction could not be legally implemented. In its decision, the Court rejected
the Plan Purchaser of Hemosol’s claim, and left no doubt as to ProMetic’s right to market its proprietary
technology in North America for the production of hyperimmune products.

PBT is in advanced discussions involving application of our PPPS technology with interested parties in
Asia and the Middle East. We are conﬁdent that during 2007 we shall announce new licensing agreements.
In North America, in the year ahead we expect a resolution of the Hemosol matter, ideally an outcome
that resurrects the original transaction, but with a new partner, and provides a resumption of revenue
generation.

Our alliance with Kedrion Biopharmaceuticals aims not only to manufacture vaccines using our technology,
but also to co-venture with ProMetic in producing orphan drugs. So-called “orphan drugs” are not
readily developed because they treat relatively obscure diseases and are only required by tiny patient
populations. ProMetic’s plasma technology has the unique ability to retrieve proteins that indicate
therapeutic effect in relation to such diseases.

It’s important to note that no substantial barriers to entry exist where orphan drugs are concerned, and
they are afforded quicker treatment through the regulatory process. Additionally, orphan drug status
gives the developing company seven years of product exclusivity in the U.S., as well as ﬁnancial grants
and tax credits.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MESSAGE TO SHAREHOLDERS
(CONTINUED)

PURIFY

ProMetic BioSciences Ltd (“PBL”)
Bioseparations Unit

As a result of major developments in 2006, and expected revenue growth in 2007, our subsidiary in
the United Kingdom will likely be cash neutral by year end. Chief among its accomplishments was
European regulatory approval for the P-Capt™ ﬁlter, a medical device developed by our Pathogen
Removal and Diagnostic Technologies (“PRDT”) initiative in a joint venture with the American Red Cross.
Obtaining the CE Mark in Europe validated all of the effort we have put into the program. The device
will almost certainly be commercially launched by our manufacturing partner MacoPharma in 2007.

The long-term beneﬁt to ProMetic of the imminent P-Capt™ launch cannot be overstated. The ﬁlter
efﬁciently removes the infectivity of all detectable blood-borne transmissible spongiform encephalopathy
from whole blood. It is the only such ﬁlter in the world ready to be used. It represents a vital resource
for blood supply organizations. Once this device is marketed to those agencies, PBL will beneﬁt ﬁrst
from sale of its proprietary ligand technology that enables the ﬁlter to perform, and then from a royalty
on each unit sold. The estimated global market being addressed exceeds US$500 million.

In 2006, PBL notably grew its core reputation as a specialist in the development and manufacture of
afﬁnity products used by life sciences companies to purify or remove target biomolecules. Adding to
the impressive list of contracts and collaborations it has already entered into with some forty pharmaceutical
companies around the world over the course of 2006 PBL signed agreements with Novozymes Delta
and Novartis, while expanding an existing program with Octapharma. PBL also entered into a conﬁdential
program to investigate new means of using its technology with a major multinational. In the last month
of the year, PBL won the biggest single order in its history ($3.9 million) when an existing multinational
client ordered a very large quantity of PBL’s proprietary Mimetic Ligand™ product.

Not surprisingly, we have postponed the plan we outlined last year for an Initial Public Offering of PBL
stock on the London Stock Exchange. The IPO has been deferred for several important strategic reasons.
Growth of projected revenues, a leading position with P-Capt™, as well as an upsurge of developments
with prominent pharmaceutical companies, have at once removed any ﬁnancial urgency and made it
advantageous to bide our time. We believe that PBL could achieve a much higher valuation in 2007
or 2008. Accordingly, if and when PBL does an IPO, it will be on the basis of providing an optimal
return to shareholders in ProMetic Life Sciences.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

DETECT

BSafE Innovations Inc.
ProMetic’s Animal Care Initiative

Although there is still no diagnostic available
anywhere in the world that certiﬁes live cattle as
BSE (Bovine Spongiform Encephalopathy)-tested,
we believe we hold a pole position in the development
of that test because we are using proprietary
technology that has been validated. Furthermore,
we have brought to regulatory approval the ﬁrst
ﬁlter for humans proving our technology could
remove over 99.9% of prions. We are a leader in
the ﬁeld of prion identiﬁcation and removal; that
is why we believe our search for a BSE diagnostic
through our BSafE co-venture puts us at the head

of the class. BSafE’s paramount role is to apply
our successful and proven PRDT application to
animals. We believe that our technology can be
combined with existing diagnostic technologies to
further improve the level of detection.

It is still early days in our animal care initiative. We
consider an ante-mortem test feasible, and we are
determined to eventually achieve it. However, for
the year ahead we believe we should concentrate
our efforts on proving our expertise through
demonstration of vastly improved post-mortem testing.

Since the age of biotechnology dawned and science began its march to the human genome, the
question has often been asked: which companies will be more successful – those that discover revolutionary
drugs, or those that provide the tools to enable the discoveries? (The question recalls the gold rush,
when very few of the seekers found gold while the most secure parties were those supplying the picks
and shovels!) At ProMetic, given the verticals we work in, we can claim both consistent security and
the possibility of giant reward.

Our bioseparation and prion ﬁlter products, along with our plasma fractionation technology, put us
solidly in the pick and shovel domain. (An update of the analogy would describe ProMetic’s technologies
as the “pentium chip inside” of a growing number of pharmaceuticals.) Meanwhile, the continuing
progress through clinical trials of our therapeutic compounds represent our potential major gold strike.
This business model is characterized by ﬂexibility and offers multiple synergies. We believe it acts as
an assurance of overall success, and that it will serve the best long term interests of our shareholders.

I wish to take this opportunity to thank you, ProMetic’s shareholders, for your trust. We look ahead with
complete conﬁdence, not least because of your continuing support – and most especially because of
the world-leading products that your support has made possible.

Permit me as well to salute here the talent and resolve that ProMetic’s team members consistently bring
to achieving the Company’s objectives. Next year in this space, principally due to their dedication, we
anticipate reporting further scientiﬁc advances and highly beneﬁcial commercial developments.

(Signed Pierre Laurin)

Pierre Laurin
President & CEO

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

ProMetic
BioSciences Inc.

HEAL

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Addressing multi-billion
dollar therapeutic markets

Two lead compounds
with the potential to
create signiﬁcant value

The Therapeutics Unit of the Company, ProMetic BioSciences Inc. (“PBI”) has two development
programs: hematology and oncology. Each program has a pipeline of promising compounds and each
program has one lead candidate drug progressing through the clinical trial process. Both candidate
drugs aim at satisfying unmet needs in huge patient populations. Both are ﬁrst in class with distinct
mechanisms of action. These innovative compounds, if they demonstrate the efﬁcacy expected of them,
represent blockbuster potential in terms of imminent partnership value and long term revenue
generation.

PBI-1402 is an orally active drug for patients suffering from anemia. The current drug of choice for the
treatment of anemia is erythropoietin (EPO). However, a signiﬁcant number of patients do not respond
well to EPO. Furthermore, relative to PBI-1402, EPO is an expensive drug. At this point, it appears that
only one other orally active compound addressing the same condition is in clinical development. The
market opportunity is immense. At present, worldwide sales of EPO is approaching US$15 billion.

PBI-1393 has demonstrated the ability, when tested on human cells, to stimulate cytotoxic T-lymphocytes
which are white blood immune defense cells capable of destroying cancer cells. Chemotherapeutic
drugs destroy immune cells in the human body and diminish the patient’s anti-cancer defense mechanisms.
PBI-1393 is an immunostimulant; it is designed to effectively counteract this adverse effect of chemotherapy
and enhance the body’s response to cancer. Adding to its advantages, PBI-1393 is relatively inexpensive.
It is anticipated that this product can capture a signiﬁcant share of the global adjuvant cancer therapy
market which today is estimated to exceed US$16 billion annually.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

PROMETIC BIOSCIENCES, INC.
(CONTINUED)

Key developments

• PBI-1402 Expansion of Cancer Trial Sites: The Phase Ib/II
clinical trial of ProMetic’s orally active drug targeting ane-
mia in cancer patients undergoing chemotherapy was
expanded to multiple sites in Canada and Europe, follow-
ing initial delays in patient enrollment in Canada. The
expansion was undertaken to make exceedingly likely the
provision of efﬁcacy results in 2007. Earlier animal studies
demonstrated that PBI-1402 promotes the growth of red
blood cell progenitors and also protects various tissues such
as spleen and bone marrow from the toxic effects of
chemotherapy. Many pharmaceutical and biopharmaceuti-
cal companies have followed the progress of PBI-1402 with
ProMetic. They await the results of the Phase II trial with
the intention of potentially co-partnering and ﬁnancing,
under a license agreement, the subsequent development
of PBI-1402.

• PBI-1402 Clinical Program Expanded:

Immediately subse-
quent to year end, the Company received regulatory
approval from Health Canada for the expansion of the
clinical program of its lead compound PBI-1402 to anemic
patients with Chronic Kidney Disease (CKD). Designed to
monitor the safety and tolerability of PBI-1402 and whether
it has additive effects when combined with a high dose of
EPO in this patient population, this clinical trial is being
undertaken at the Maisonneuve-Rosemont Hospital in
Montreal, Canada.

• PBI-1393 Offshore Phase Ib/II Clinical Trials: Toxicology
studies of PBI-1393 in support of the off-shore clinical trial
were recently completed. Analysis of the results showed the
absence of the severe toxicity displayed by other immunos-
timulants and indicated a promising safety proﬁle for the
compound. The results supported the immediate prepara-
tion of an offshore clinical trial in advanced cervical cancer
patients. This trial is designed to monitor the safety and
tolerability of PBI-1393 and to give an indication of efﬁca-
cy in 2007. Again, attention pertains to the development of
this compound amongst multinational pharmaceutical com-
panies that are eager to reinforce their pipelines by in-
licensing promising drug candidates.

• PBI-3941 Treatment of neutropenia: This lead preclinical
hematopoiesis compound targets a condition where neu-
trophil counts, a subset of white blood cells, are lower than
normal. Preclinical studies have demonstrated an increase
in neutrophil count, thus conﬁrming that ProMetic scientists
have identiﬁed a new class of compounds that can give rise
to the discovery of many ‘ﬁrst in class’ drugs for various
hematological disorders. These potential drugs have the
advantage of reduced cost in comparison with recombinant
protein drugs currently on the market.

• PBI-1737 Induction of Tumor Regression: In a mouse xeno-
graph model (engraftment of a human prostate cancer onto
the animal), ProMetic’s research compound PBI-1737,
administered orally in combination with a standard cytotox-
ic drug, regressed the tumor. Currently, there is no drug
available for the treatment of this particular (so-called
androgen independent) prostate cancer.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Catalysts for growth

• Distinct Mechanisms of Action Provide Advantage: All of
PBI’s work to date has served to conﬁrm that PBI-1402
and PBI-1393 do not act at the same receptor level as the
commercially available recombinant protein drugs – EPO
and interleukin-2 – whose biological activity PBI-1402 and
PBI-1393 respectively mimic. This is a critically important
distinction in support of the clinical development strategies
and partner-attracting potential of these compounds.

PBI-1402 does not bind to the same cell surface receptor
molecule as EPO and therefore may serve as a stand-alone
therapeutic in the treatment of anemic patients, as a thera-
peutic for patients who are not responsive to EPO, or as a
treatment in combination with EPO.

PBI-1393’s mechanism of action is linked to activation of
cytotoxic T-lymphocytes (CTLs), which are cells that play a
vital role in helping the human body ﬁght off cancer. CTLs
engender a process at the cellular level that effectively
destroys cancerous cells – and thus potentially render PBI-
1393 an important adjuvant to chemotherapeutic treatment.

• PBI-1402 Addresses a Vast Waiting Market: Amongst
patients treated with chemotherapy every year, approxi-
mately 67% will develop anemia. Of this patient base,
approximately 10% are treated with EPO and it is reported
that as many as 35% - 40% will be resistant to the EPO
treatment. Additionally, PBI-1402 may have the potential to
treat anemia not associated with cancer or chemotherapy.
This would represent an expanded market made more
accessible since, unlike EPO, PBI-1402 is signiﬁcantly less
expensive and offers the convenience of oral administration.

• PBI-1402 Potential Efﬁcacy for the Treatment of Anemia
Associated with Chronic Kidney Disease: Nearly half of
EPO sales in the U.S. are related to anemic patients with
renal diseases. Furthermore, as much as 60% of EPO used
in CKD patients is for 10%-15% of CKD patients requiring
a high dose of EPO to treat their anemia. The combination
of PBI-1402 and EPO in in vitro cell culture has already
demonstrated an additive effect primarily on red blood cell
progenitors in human bone marrow. The prospect of improv-
ing clinical outcomes with the combination – or of achieving
a similar outcome with a lower dose of EPO – would repre-
sent a signiﬁcant beneﬁt for this patient population.

• PBI-1393 Potential Orphan Drug Status: Since it targets
cervical cancer, PBI-1393 qualiﬁes for orphan drug status
in the United States. The procurement of such status would
entitle ProMetic to seven years of product exclusivity as well
as ﬁnancial grants and tax credits. Orphan drug status
enhances the attractiveness of a compound for potential
partners and licensees. However, PBI-1393 is expected to
be useful for the treatment of the many cancers responsive
to stimulated CTLs. In addition to cervical cancer, they
include metastatic melanoma, leukemia, colon, breast and
pancreatic cancers.

• Pipeline Depth: ProMetic has discovered novel compounds
to treat autoimmune diseases such as arthritis and psoria-
sis. Initial results in animal models are promising and these
compounds are available for out-license to other compa-
nies. The Company has chosen to focus its development
efforts in the ﬁeld of hematology and cancer. With novel
mechanisms of action, ﬁrst in class compounds with demon-
strated in vivo activities in standard animal models, our
scientists are charting a course that over time aims to ren-
der ProMetic BioSciences Inc. an important player in the
ﬁght against cancer and hematological disorders.

ProMetic BioSciences Inc.
Therapeutic Product Pipeline

HEMATOPOIESIS
Compound
PBI-1402
PBI-3941

Status
Clinical Phase Ib/II
Preclinical

CANCER
Compound
PBI-1393

Status
Clinical Phase Ib/II

PBI-1737
PBI-1668
PBI-1308

Preclinical
Preclinical
Preclinical

Therapeutic Indication
Anemia
Neutropenia

Therapeutic Indication
CTL activation adjuvant
to chemotherapy
Prostate Cancer
Breast and Lung Cancer
Acute Myelogenous Leukemia

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

ProMetic
BioTherapeutics, Inc.

EXTRACT

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

World Leader in Plasma
Protein Fractionation
Technology

Total, More Efﬁcient
Extraction and Puriﬁcation

Headquartered in the United States and proprietor of a unique, validated, state-of-the-art solution for
plasma fractionation, our wholly owned subsidiary ProMetic BioTherapeutics, Inc. (“PBT”) offers a
compelling alternative to a legacy manufacturing process that has not been fundamentally improved
in decades.

The advantages of PBT’s protein extraction technology are being increasingly recognized worldwide.
Manufacturers of a wide range of blood-derived products have begun to look to PBT to help them
develop their pipelines with higher yields and fewer processing steps.

The revenue model of PBT exempliﬁes the synergies that exist within ProMetic. At the core of the Plasma
Protein Puriﬁcation System (“PPPS”) is ProMetic’s proprietary Mimetic Ligand™ technology – powerful
afﬁnity separation materials and processes that extract and purify biomolecules at very high yields. PBT
generates revenue based on technical transfer fees and royalties, as well as upon the sale of resins
manufactured by its sister unit, ProMetic BioSciences Ltd, at the latter’s GMP-compliant facility in the
United Kingdom.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

PROMETIC BIOTHERAPEUTICS, INC.
(CONTINUED)

Key developments

• Organizational Milestone: The PPPS was originally devel-
oped in a co-venture between ProMetic and the American
Red Cross. PBT owns an exclusive license to use the PPPS
technology, as well as an exclusive license to manufacture
and sell any products derived from the PPPS technology,
and the right to sublicense to third parties those same
rights. In 2006, all of the assets of PPPS to manufacture
therapeutics from plasma were consolidated into PBT. The
agreement encompassed the IT, facilities and equipment, as
well as the human resources of the project. All of the scien-
tists of the American Red Cross who played a part in the
creation of PPPS are now resident scientists at ProMetic.
This evolution represents a major milestone for the
Company. As a U.S.-based, operationally independent and
entrepreneurial subsidiary, PBT is now poised to enhance its
penetration of the American and global markets, and bet-
ter positioned to attract the attention of American capital.

• Precedent-Setting Transaction: Nabi Biopharmaceuticals is
a manufacturer of high titer antibody plasma used as raw
material for the manufacture of hyperimmune products.
Based in Florida, it operates nine plasma collection centers
and is recognized as one of the world’s leaders in the ﬁeld
of blood-derived products. In 2006 Nabi signed an exclu-
sive license and associated services agreements with PBT
for the use of the Company’s Mimetic Ligands™ in the man-
ufacture of selected plasma-derived hyperimmune prod-
ucts. Nabi will use the technology to extract directly from
hyperimmune plasma the hyperimmunes necessary to ﬁght
infections such as hepatitis C, or infections caused by
staphylococcus. Under the separate services and supply

agreements, ProMetic will provide technology transfer and
support to Nabi, as well as the supply of resins required.
Royalties will be paid upon product sales, and milestone
payments over the next several years could reach US$18
million if Nabi develops and obtains licensure of all the
products governed by its agreement with PBT.

• Overcoming Limitations in Bioseparation: PBT signed a far-
reaching agreement with Sartorius AG, based in Germany.
The Sartorius Group is one of the world’s largest laborato-
ry and process technology suppliers to the pharmaceutical
industry. Sartorius will be a preferred supplier and technol-
ogy provider to PBT’s licensees for PPPS ﬁltration equipment
and consumables. The combination of PBT’s fractionation
technology and the integrated technology portfolio of
Sartorius promises to assist manufacturers to overcome
production bottlenecks and more quickly launch commer-
cial-scale recovery of plasma-derived proteins.

• Victory in Court: In 2006 PBT convincingly turned back a
legal challenge resulting from the insolvency of our former
North American partner Hemosol. The Potential Purchaser
of Hemosol had claimed an exclusive right to market PBT’s
fractionation technology in North America for the produc-
tion of hyperimmune products. The judgement vindicated
ProMetic’s claims, left no doubt as to PBT’s rights and, by
extension, conﬁrmed PBT’s full entitlement to the transaction
with Nabi Biopharmaceuticals.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Catalysts for growth

• Technology Platform for Developing Countries: The vast
majority of countries lack their own plasma extraction and
puriﬁcation facilities. Large developing countries such as
China and India are now seriously examining their need to
establish such facilities, and PBT’s technology is a clear
frontrunner option. We have a memorandum of under-
standing on a license agreement in China, discussions are
advancing in India, and we have a potential client in the
Middle East.

• Short and Long Term Revenues: PBT’s business plan is pred-
icated on generating short term revenues from licensees for
the Company’s hyper-immune and PPPS technologies in
both North America and Europe. Longer term revenues are
expected to derive from a combination of royalties on resin
sales in the developed countries, and a continuous ramping
up of technology sales to developing countries.

• Projected Break-Even in 2007: The important agreement
with Nabi Biopharmaceuticals has provided a template for
PBT’s revenue generation going forward. PBT has realistic
short-term expectations of closing similar transactions with
additional companies in other countries. Negotiations are
at an advanced stage, in Europe for use of PPPS technol-
ogy. In the midst of discussions with different parties, PBT is
facilitating the recognition and pursuit of synergies between
these parties and our American licensee Nabi.

• Opportunity in Orphan Drugs: Orphan drugs treat uncom-
mon diseases, as outlined in the U.S. Orphan Drug Act. An
uncommon disease is deﬁned as one that afﬂicts fewer than
200,000 Americans. So-called “fast-track approval”
guidelines set out by the FDA are designed to encourage
the development of therapeutics for these diseases, and to
bring them as quickly as possible to market. Experience has
shown, for companies such as Genzyme, that although
patient populations are small the revenue from orphan
drugs can be immense. High value plasma proteins have
long served as therapeutics for a wide variety of disorders.
One of the latent and most promising aspects of PPPS tech-
nology is its ability to recover additional new proteins that
could treat uncommon diseases and thus beneﬁt from
orphan drug status. The existing legacy fractionation tech-
nology (i.e., the Cohn process) cannot effectively extract
these proteins. PPPS represents a powerful platform for use
by PBT, which intends to initiate development of its own
internal proprietary products with non-dilutive sources of
funding (such as government sources and patient groups).
PBT aims to bring at least one candidate protein therapeu-
tic project forward in 2007. Additionally, the platform can
be exploited in collaboration with multiple potential part-
ners in big Pharma aiming to rapidly advance protein-
derived pharmaceuticals to market.

• Resolution of the Hemosol License: The North American
continent effectively remains a major untapped opportunity
for PBT. As a result of the Hemosol bankruptcy two years
ago, our ability to exploit PPPS technology in the United
States and Canada has been constrained, since the
Hemosol license has been held in legal abeyance. We have
every conﬁdence that the Hemosol matter will be resolved
in the near future. We will then seek interaction with the
new license holder on a technical level and product devel-
opment level. The value of the process under license has
only grown. The onetime setback embodied in the Hemosol
insolvency promises to be remembered as a temporary
detour to PBT’s North American success.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

ProMetic
BioSciences Ltd

PURIFY

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Technology Supplier to
Drug Companies Around
the World

Launching a Vital Tool
to Safeguard the Human
Blood Supply

Our subsidiary ProMetic BioSciences Ltd (“PBL”) headquartered in the United Kingdom, markets
patented technology in two important and rapidly growing sectors of the life sciences industry.

Over forty leading companies in the pharmaceutical and biotech sectors have purchased PBL’s
innovative bioseparation materials, which are based on the Company’s proprietary Mimetic Ligand™
technology. PBL’s clients use its afﬁnity ligand technology to cost-effectively purify bio-molecules. This
allows them to enhance the commercial feasibility of compounds they have under study, and increase
the yield of therapeutics they have in production.

PBL is also preparing for the launch of an essential device for blood supply organizations. The revolutionary
P-Capt™ ﬁlter, conceived through ProMetic’s Pathogen Removal and Diagnostic Technologies (“PRDT”)
joint venture with the American Red Cross and further developed with co-development, manufacturing
and marketing partner MacoPharma, is a ﬁrst generation prion reduction ﬁlter. The device can at last
equip blood service agencies around the world with the means of signiﬁcantly reducing the risk of vCJD
infection by blood transfusion.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

PROMETIC BIOSCIENCES LTD
(CONTINUED)

Key developments

Corporate, Regulatory, Financial

• In 2006 the Company inaugurated use of its expanded
manufacturing infrastructure on the Isle of Man, enabling
PBL to supply its growing number of clients and licensees.
• PRDT’s partner, MacoPharma, received CE Mark regulato-
ry approval for the P-Capt™ ﬁlter, substantiating full con-
formity with all essential requirements of the European
Medical Device Directive EC 93/42 and conﬁrming the
performance of the device.

• The intention to conduct an Initial Public Offering for PBL
was postponed in light of superior revenue forecasts, sub-
stantial progress in various projects, break-even projected
in 2007, and anticipation of a much higher valuation at a
later date.

• At year end 2006, with a strengthened management team
and major orders in hand, PBL looks ahead to growth and
projected break-even operations in 2007.

Transactions and Agreements

• With Novartis: Purifying a new protein vaccine

Novartis, one of the world’s largest and most prestigious
multinational pharmaceutical companies, is developing a
new protein vaccine. Like all recombinant protein products,
this vaccine requires puriﬁcation. A number of different
technologies are available to purify proteins. Given the pro-
jected scale of production and the stringent requirements
for purity (vaccines are therapeutic products administered
to people who are not actually sick, so side effects must be
minimal), PBL was selected by Novartis from a wide variety
of potential suppliers as its partner of choice for implemen-
tation of this puriﬁcation procedure.

• With Octapharma: Purifying a new recombinant protein

Octapharma, a Swiss-based globally active plasma frac-
tionation specialist, engaged PBL to provide scale-up quan-
tities of a Mimetic Ligand™ afﬁnity adsorbent. The new
adsorbent, selected by Octapharma for its new recombi-
nant protein product, was developed using PBL’s unique

Chemical Combinatorial Library® technology. The agree-
ment calls for the production of multiple batches of adsor-
bent, involves clean-room manufacture by PBL to ISO 9001:
2000 standard, as well as project management and exten-
sive regulatory support – and represents another major
endorsement of PBL’s expertise.

• With Novozymes Delta: Purifying recombinant

human serum albumin
Novozymes Delta, a UK-based producer of recombinant
protein products, selected PBL as a provider of puriﬁcation
technology for the manufacture of Recombumin®. This prod-
uct, used as a high qualilty protein excipient, is the ﬁrst
commercially available recombinant human albumin
approved for use in connection with therapeutic products.
The transaction involves long-term supply by PBL of two
synthetic-ligand afﬁnity adsorbents, which enable produc-
tion of a very high purity product which has passed the
most stringent regulatory hurdles.

• With a giant multinational: Research agreement

PBL has entered an agreement to investigate new ways of
applying its technology with a big Pharma multinational,
the name of which cannot be published at this stage for rea-
sons of conﬁdentiality. The collaborative research will focus
on the development of new approaches to the puriﬁcation
of biological products.

• With MacoPharma: License agreement

MacoPharma, based in France, is one of the world’s largest
manufacturers of human blood collection kits and blood ﬁl-
tration systems. It has co-sponsored PRDT’s infectivity stud-
ies and has partnered with PRDT in the development of the
P-Capt™ ﬁlter. In 2006, PRDT signed a deﬁnitive license
agreement with MacoPharma, granting it the exclusive sale
and distribution rights for the P-Capt™ ﬁlter within Europe,
in addition to an exclusive worldwide manufacturing
license. Contracts governing the supply of the prion binding
adsorbent by PBL to MacoPharma were also completed.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Catalysts for growth

• Puriﬁcation Technology

PBL’s proprietary Mimetic Ligand™ puriﬁcation platform
has made the company an established global player in the
pharmaceutical and biopharmaceutical sectors. Afﬁnity
adsorbents are crucial to the commercial manufacture of
therapeutic proteins. PBL’s innovative puriﬁcation technolo-
gy provides major advantages. It can be applied to almost
any target protein given the extensive chemical diversity of
PBL’s ligand libraries; it can capture targeted proteins
directly from the source; and it can help separate nearly
identical proteins to achieve high levels of purity. The result
for PBL’s clients includes higher yields and the ability to
reduce puriﬁcation costs by up to half. This core biosepara-
tion technology of PBL, used by some forty companies in the
life sciences industry, and increasingly recognized as the
puriﬁcation solution of ﬁrst choice, is steadily widening its
appeal in a market of over US$700 million which is grow-
ing by an estimated ten to ﬁfteen percent annually. In addi-
tion, PBL is working upon improved methods for the puriﬁ-
cation of anti-bodies, speciﬁcally monoclonal anti-bodies. It
has two such products under development, with one antici-
pated for market launch in mid-2007.

infectivity than that estimated to be present in a unit of
TSE-infected red blood cells, thus demonstrating vast excess
adsorbing capacity. In 2006, the results of PRDT’s second
major study were announced. This endogenous (blood-
borne) infectivity study demonstrated that PRDT’s lead resin
– namely the resin that is incorporated into the prion ﬁlter
device, P-Capt™ – also adsorbs and removes the speciﬁc
form of TSE infectivity that is found at very low concentra-
tion. Findings were presented at the 10th Annual TSE
Conference and published in Transfusion, the journal of the
American Association of Blood Banks. Later in the year, the
prestigious The Lancet reported that PRDT’s resin was shown
to remove, to the limit of detection, the infectivity that is nat-
urally present in blood during infections by TSEs and to sig-
niﬁcantly reduce the risk of transmission of infection by con-
taminated blood. All of the study data and reports on the
performance of PRDT’s resin represent a major resource for
achieving eventual wide acceptance of the P-Capt™ device,
which is a ready-for-use prion ﬁlter for blood transfusions.
Globally, approximately forty million units of blood are
collected every year, affording PBL and its partner an enor-
mous market opportunity.

• Protecting the Human Blood Supply

• PRDT Technology: Next-Generation Value Drivers

TSEs (transmissible spongiform encephalopathies) are
fatal brain diseases that include Bovine Spongiform
Encephalopathy (BSE) or “mad cow disease” in cattle and
Creutzfeldt-Jakob Disease (vCJD) in humans. The latter
infection (which cannot be detected with a diagnostic test)
is among the greatest emerging risks for the blood supply
and represents a prime target of ProMetic’s scientists in the
PRDT initiative. PRDT’s ﬁrst infectivity study established that
selected afﬁnity resins are capable of removing very high
concentrations of TSE infectivity, far in excess of concentra-
tions that have so far been detected in blood. The resins
were challenged with almost 2,000,000-fold greater TSE

The use of the P-Capt™ ﬁlter will likely trigger a new era of
product development. The product promises to be just the
initial device of a family of devices. The blood supply agen-
cies of the world are seeking technology that will reduce or
remove viruses such as hepatitis and HIV from donated
blood. PRDT’s science has demonstrated its potential to
address these vast markets that no company in the world is
yet tapping.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

BSaf E
Innovations Inc.

DETECT

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

The BSafE Initiative

Applying proven PRDT expertise

Enhancing current screening for
Mad Cow Disease

Leading in the search for an ante-mortem
BSE diagnostic

Working to enhance the safety of
the food chain

Twenty years ago, bovine spongiform encephalopathy (BSE), more commonly known as Mad Cow
Disease, was identiﬁed in England. Since then, hundreds of thousands of cattle have been infected in
that country. Several thousand more cases have been reported in other European countries, and the
disease has emerged in North America and Japan. Caused by abnormal prions (infectious proteins)
concentrating in the brain and spinal cord of diseased cows, BSE is invariably terminal – all infected
cattle must be destroyed.

The presence of BSE in the human food chain cannot be tolerated. Since the BSE agent has been
strongly associated with precipitating Variant Creutzfeldt-Jakob Disease (vCJD), a fatal human neuro-
degenerative condition, the potentially catastrophic effects of an outbreak of Mad Cow Disease upon
the meat-growing industry anywhere in the world are easy to understand. Precedent has shown that
the discovery of even one infected animal leads to the slaughter of whole herds.

A major commercial opportunity exists within this context, and ProMetic is uniquely positioned to
address it.

The meat growing industry would very highly value a cost-efﬁcient diagnostic that certiﬁes live cattle
as BSE-tested, but no such diagnostic yet exists. At ProMetic we are paving the way to its achievement
with our BSafE initiative. We believe that we have a leading position due to the research and validat-
ed performance of our Pathogen Removal and Diagnostic Technologies (PRDT), the veterinary applica-
tions of which have been in-licensed by BSafE. At present, BSafE’s scientists are working toward the
ultimate goal of the diagnostic by achieving intermediate steps designed to enhance the sensitivity and
speciﬁcity of already existing BSE screening tests.

Formally constituted in 2006 as BSafE Innovations Inc. with headquarters in Alberta, this initiative in
the veterinary ﬁeld is a joint venture with Top Meadow Life Sciences Inc., a subsidiary of Top Meadow
Farms. The Top Meadow group plays a large role in the cattle and beef industry with expertise in
breeding, feeding and marketing. Top Meadow is facilitating contact with potential users of the tech-
nology in the meat industry.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

BSAFE INNOVATIONS INC.
(CONTINUED)

Using a proven technology:
PRDT’s science, which constitutes a critical element of the revolutionary P-Capt™ human prion blood
ﬁlter that has been approved for use in Europe and which will be launched commercially by
MacoPharma in 2007, has helped make ProMetic a clear leader in prion identiﬁcation and removal
in reference to human blood products.

The platform technology which made P-Capt™ possible is also behind the BSafE initiative, which targets
the bovine form of prions. The PRDT scientists who worked on the P-Capt™ enabling technology are
also spearheading the BSafE research.

The challenging task achieved by our scientists for the P-Capt™ ﬁlter was to capture over 99.9% of
prions in blood. For the purpose of detection, however, there is no need to capture the same percentage
of prions. Whereas a 90% capture rate would be insufﬁcient and untenable in a removal device, the
same rate of prion capture from a test sample would represent the equivalent of a 100-fold increase
in the “signal to noise” ratio.

The P-Capt™ ﬁlter for human blood relies on ligands with afﬁnity to human prions. The objective now
being addressed by our scientists in the case of BSafE is the development of ligands that will display
high afﬁnity to the bovine form of prions.

Our goal is to initially introduce ﬁrst generation devices that when combined with current testing procedures
provide for enhanced sensitivity and detection. This strategic step-by-step approach serves many purposes,
including ﬁrmly establishing BSafE as a leader in the marketplace. Our development will then aim at
fulﬁlling the ultimate objective of the technology with a second generation device, namely an ante-
mortem test to certify live cattle as BSE-tested.

First Generation:
As this Annual Report goes to press, we are embarked on a series of experiments to replicate and
validate our ﬁndings, and conﬁrm them for commercial use. Our ﬁrst generation device aims at amplifying
the signal by concentrating bovine prions from brain tissue, and increasing the sensitivity of existing
tests by signiﬁcant orders of magnitude. This in turn would enable the detection of Mad Cow Disease
in much younger animals and at much earlier stages. The potential beneﬁt of such technology to the
beef industry cannot be over-emphasized, yet it is only the ﬁrst stage of BSafE’s long-term vision.

Bovine
brain sample

BSafE
concentration
step

Existing
post mortem
test

Sensitivity
and detection

Second Generation:
The already demonstrated accomplishments of our science point the way to the means of detecting Mad
Cow Disease from a simple blood sample. With our proven technology and our team of scientists in
place, we are geared to achieve an ante-mortem diagnostic that could be used by herd owners and
government regulatory agencies worldwide.

Fluid
blood sample

BSafE
concentration
step

BSafE
BSE speciﬁc
diagnostic

Sure detection
pre-food
chain entry

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MD&A

The Management’s Discussion and Analysis of Operating Results and Financial Position, prepared
February 23, 2007, aims at helping the reader to better understand the business of the Company and
the key elements of its ﬁnancial results. It explains the trends of the ﬁnancial situation and the operating
results of the Company for the 2006 ﬁnancial year compared to the 2005 operating results. This
management’s discussion and analysis was prepared in accordance with Regulation 51-102 respecting
continuous disclosure obligations and should be read in conjunction with the 2006 consolidated
ﬁnancial statements and the accompanying notes included in this annual report. These ﬁnancial statements
were prepared in accordance with Canadian generally accepted accounting principles (“Canadian
GAAP”). Unless otherwise indicated, all ﬁgures are expressed in Canadian dollars.

5 2% 4$73

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL POSITION

ProMetic Life Sciences Inc. (“ProMetic”) is a globally active biopharmaceutical company with four distinct business units.
ProMetic BioSciences Inc. (“PBI”) is developing therapeutics to treat cancer and autoimmune diseases. ProMetic BioTherapeutics,
Inc. (“PBT”) has developed and is now marketing large-scale drug puriﬁcation technologies. ProMetic BioSciences Ltd (“PBL”)
is involved in bioseparation enabling technologies and pathogen removal devices. ProMetic has also entered into a joint venture
related to a major initiative in the ﬁeld of animal care, under the name of BSafE Innovations Inc., which is working to enhance
the sensitivity of screening tests for “Mad Cow” disease.

ProMetic
Life Sciences Inc.

ProMetic
BioTherapeutics,
Inc. (USA)

ProMetic
BioSciences Ltd
(UK)

ProMetic
BioSciences Inc.
(Canada)

BSafE
Innovations Inc.
(Canada)

ProMetic BioSciences Inc.

Based in Montreal, Canada, the therapeutic development arm of ProMetic has two lead compounds progressing in clinical trials,
both of which address unmet needs of cancer patients undergoing chemotherapy. PBI-1402 is an orally active therapeutic for
patients suffering from anemia either induced by chemotherapy or associated with chronic renal disease. PBI-1393 is an
immunostimulant, designed to counteract the adverse effects of chemotherapy and enhance the body’s response to cancer. Since
it targets cervical cancer, PBI-1393 would qualify for orphan drug status in the United States. In its discovery pipeline the therapeutics
unit has a compound, PBI-3941 which based on animal work, may be promising for the treatment of neutropenia. As well, it is
developing new compounds, which have demonstrated activity in standard animal models, to treat cancer and autoimmune
diseases such as arthritis and psoriasis activity in standard animal models.

ProMetic BioTherapeutics, Inc.

This subsidiary is headquartered in the state of Maryland in the U.S. It is the developer of a unique, validated, state-of-the-art
solution for plasma fractionation, the Plasma Protein Puriﬁcation System (“PPPS”). The system offers an alternative to the legacy
manufacturing process (the Cohn Process); it removes therapeutic proteins from plasma with a process that very signiﬁcantly
enhances the recovery yield. PPPS was originally developed in a co-venture between ProMetic and the American Red Cross. PBT
owns an exclusive license to use the PPPS technology, as well as a license to manufacture and sell any products derived from
the PPPS technology, and the right to sublicense to third parties those same rights. Manufacturers of a wide range of blood-
derived products have begun to look to PBT to help them develop their pipelines with higher yields and fewer processing steps.

ProMetic BioSciences Ltd

PBL, headquartered in the United Kingdom, with R&D facilities in Cambridge and manufacturing capacity on the Isle of Man, is
a technology supplier to drug companies. It develops and markets bioseparation products based on applications of its patented
Mimetic LigandTM technology. PBL will also be playing an important role in the manufacturing process with its partner
MacoPharma, for a prion reduction ﬁlter device for blood supply organizations known as the P-Capt™ which has earned
European regulatory approval (CE Mark). The prion reduction technology for the device was originally developed in a co-venture
between ProMetic and the American Red Cross under the name Pathogen Removal and Diagnostics Technologies (“PRDT”).

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

BSafE Innovations Inc.

This initiative in the veterinary ﬁeld is headquartered in Alberta. It is a joint venture with Top Meadow Life Sciences Inc. BSafE
has in-licensed the veterinary applications of ProMetic’s PRDT. The long term goal of BSafE is to use the validated PRDT technology
for prion reduction in the search for a diagnostic that would certify live cattle as BSE-tested. Short term, BSafE’s scientists are
working to enhance the sensitivity of already existing BSE screening tests. The Top Meadow group plays a role in the cattle
industry with expertise in breeding, feeding and marketing, and is facilitating contact with potential users of BSafE technology
in the meat industry.

Signiﬁcant Events

The following events took place during the calendar year 2006 and subsequent to year end until the date of the writing of this MD&A:

ProMetic Life Sciences Inc. (Corporate)

• ProMetic completed the second of two tranches of a US$8.9 million convertible debt ﬁnancing. In total ProMetic issued secured
convertible notes in the aggregate principal amount of approximately US$11.2 million and warrants to purchase up to
20,507,379 Subordinate Voting Shares, for gross proceeds of US$8.9 million.

• Two shareholder rights plans were adopted in March.
• In May, all of the issued and outstanding multiple voting shares of the Company were exchanged for subordinate voting

shares; the shareholder rights plans adopted in March came into effect.

• In June, a private placement for $10.8 million was closed with JP Morgan and Third Point LLC.
• In November, approval was obtained from the Autorité des Marché ﬁnanciers for the use of a CDN$42 million short form

base shelf prospectus with the securities regulators in each Canadian province.

• In December, ProMetic secured a non-convertible debt facility in the amount of $11.6 million with a U.S. based ﬁnancial
institution, the proceeds of which were used to reimburse the convertible note contracted in December of 2005, with a residual
amount of $3.2 million to be used for general corporate purposes.

• In December, two tranches of ﬁnancing closed involving prominent U.S. and Canadian institutional investors for gross proceeds

of $17,141,600.

ProMetic BioSciences Inc. (“PBI”)

• The Phase Ib/II clinical trial of ProMetic’s orally active drug targeting anemia in cancer patients undergoing chemotherapy,
known as PBI-1402, was expanded to multiple sites in Canada and Europe, following initial delays in patient enrollment in
Canada. The provision of efﬁcacy results is projected to occur during the course of 2007.

• Toxicology studies of PBI-1393 were completed. Preliminary analysis of the results showed the absence of the severe toxicity
displayed by other immunostimulants, and indicated a promising safety proﬁle for the compound. The results supported the
immediate preparation of offshore clinical trials in advanced cervical cancer patients.

• In a mouse xenograph model (engraftment of a human prostate cancer onto the animal), ProMetic’s research compound PBI-

1737, administered orally in combination with a standard cytotoxic, regressed the tumor.

• Immediately subsequent to year end, the Company received regulatory approval from Health Canada for the expansion of
the clinical program of its lead compound, PBI-1402, to include the treatment of anemic patients with Chronic Kidney Disease.
• ProMetic’s scientists discovered a compound, PBI-3941. Based on preliminary animal work, PBI-3941 may be promising for

the treatment of neutropenia.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL POSITION

ProMetic BioTherapeutics, Inc. (“PBT”)

• Pursuant to the restructuring plans announced late in 2005, PBT became a U.S.-based, operationally independent and

entrepreneurial subsidiary in January 2006.

• Certain of the assets, as well as the human resources, of the Plasma Protein Puriﬁcation System (“PPPS”), developed in a co-

venture with the American Red Cross, were acquired by PBT.

• Nabi Biopharmaceuticals signed an exclusive license agreement with PBT for the use of ProMetic’s Mimetic Ligands™ in the
manufacture of selected plasma-derived hyperimmune products. Under separate services and supply agreements, ProMetic
will provide technology transfer and support to Nabi, as well as the resin required by Nabi. Royalties will be paid upon
product sales, and milestone payments over the next several years could reach US$18 million if Nabi develops and obtains
licensure of all the products governed by its agreement with PBT.

• Sartorius AG, based in Germany, agreed to act as a preferred supplier and technology provider to PBT’s licensees for PPPS
ﬁltration equipment and consumables. The alliance is designed to assist manufacturers to overcome production bottlenecks
and more quickly launch commercial-scale recovery of plasma-derived proteins.

• ProMetic turned back a legal challenge resulting from the insolvency of its former North American partner Hemosol. The Plan
Purchaser of Hemosol had claimed an exclusive right to market ProMetic’s fractionation technology in North America for the
production of hyperimmune products. The judgment vindicated ProMetic’s claims, left no doubt as to its rights and, by
extension, conﬁrmed PBT’s full entitlement to the transaction with Nabi Biopharmaceuticals.

ProMetic BioSciences Ltd (“PBL”)

• CE Mark regulatory approval for MacoPharma’s P-Capt™ ﬁlter, substantiating full conformity with all essential requirements

of the European Medical Device Directive EC 93/42 and conﬁrming the performance of the device, was received.

• Novartis selected PBL’s technology to purify a new recombinant protein vaccine under development.
• Octapharma engaged PBL to provide scale-up quantities of a Mimetic Ligand™ affinity adsorbent to purify its new

recombinant protein product. The agreement also involves project management and extensive regulatory support.

• Novozymes Delta chose PBL’s puriﬁcation technology for the manufacture of Recombumin®, a protein excipient. The transaction

involves long-term supply by PBL of two synthetic-ligand afﬁnity adsorbents.

• PBL entered into a research agreement with a large multinational pharmaceutical company to investigate new ways of

applying its technology.

BSafE Innovations Inc.

• Applying in the veterinary ﬁeld the research and proven efﬁcacy of ProMetic’s Pathogen Removal and Diagnostic Technologies,
BSafE’s scientists sourced BSE-infected material, tested various ligands with a series of experiments, and identiﬁed the ligands
which could concentrate BSE infectious prions. The ﬁndings led BSafE to believe that its technology [subject to conﬁrmation in
forthcoming results] is one hundred times more sensitive than existing technologies in post-mortem testing for Mad Cow
Disease, putting it in a position to develop either its own post-mortem test or a ﬁlter device designed to complement current
screening tests – and ultimately to pursue development of an ante-mortem test for Mad Cow Disease.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Selected Annual Information

The following selected annual information is derived from the consolidated ﬁnancial information of the Company for each of the
three most recently completed ﬁnancial years. The ﬁnancial statements are prepared in accordance with Canadian GAAP.

(in thousands of Canadian dollars, except for per share amounts)

December 31
2006

December 31
2005

December 31
2004

Revenues
Net loss
Net loss per share
Total assets
Long-term debt
Convertible term notes

2,647
30,459
0.20
40,727
11,577
–

8,052
22,932
0.20
29,796
412
4,014

8,183
17,152
0.17
29,705
847
–

Annual Results
Year ended december 31, 2006 compared to year ended december 31, 2005

Revenues

Total revenues for 2006 were $2.6 million compared with $8.1 million in 2005. Lower revenues are largely attributable to the
insolvency of Hemosol which caused delays in collecting milestones and shipping products. Postponement of certain new ligand
development contracts also contributed to the lower sales in 2006. On the other hand, during the last quarter of 2006, the
Company signed several development and product supply agreements which could translate into revenues in 2007. Such agreements
include:

• An order of $3.9 million for proprietary afﬁnity adsorbent with one of the company’s multinational clients. Half of the order

was paid in December 2006 and was recorded as deferred revenues;

• An afﬁnity ligand development program for a vaccine puriﬁcation process with Novartis;
• A long term manufacturing and supply agreement with Novozymes Delta for two synthetic afﬁnity adsorbents;
• A collaboration agreement with one of the largest pharmaceutical company in the world to investigate new approaches to

the puriﬁcation of biological products;

• A Services and resin supply agreement with Nabi Pharmaceuticals which was part of the exclusive license agreement

announced in the third quarter of 2006.

Obtaining CE Mark for the P-CaptTM prion capture ﬁlter by MacoPharma in the second half of 2006 was a major achievement
and will have a positive effect on the Company’s revenues in 2007. Once blood supply agencies enter into supply agreements
with MacoPharma for the P-CaptTM ﬁlter, the Company expects to generate substantial revenues from its resin supply agreement
with MacoPharma and collect royalties on every ﬁlter sold.

Positive outcome from the restructuring of Hemosol could also have an impact on 2007 revenues.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL POSITION

Research and development expenses

Research and development expenses increased to $15.3 million for the year ended December 31, 2006 from $13.3 million for
the same period in 2005. The variance is mainly attributable to the establishment of a US subsidiary for the Plasma Protein
Puriﬁcation System (PPPS) technology and lower investment tax credits as prior year adjustments for investment tax credits were
recorded in 2005.

The major research and development expenditures were related to:

• The commencement of the Phase Ib/II clinical trials for the PBI-1402 program and Phase I clinical trial for the PBI-1393

program;

• The development of new compounds for the hematology and cancer programs;
• The PRDT prion ﬁlter program, co-developed with MacoPharma, for which the P-CaptTM prion capture ﬁlter obtained CE Mark

certiﬁcation in the second half of 2006;

• The establishment of a US subsidiary composed of former American Red Cross employees to commercialize and license

the PPPS.

Tax credits of $0.8 million available under provincial tax programs were recorded in 2006.

General and administrative expenses

General and administrative expenses increased to $8.0 million for the year ended December 31, 2006 from $6.7 million for
the year ended December 31, 2005. This increase was mainly due to:

• The preparation of an IPO for ProMetic BioSciences Ltd (PBL) which was postponed and will be reconsidered if and when a

higher value is attributed to this unit;

• The legal expenses related to the litigation with the potential buyer of Hemosol. In September of 2006, the court rendered a
favourable decision for the Company which removed all obstacles to licensing hyperimmune products in North America and
around the world.

Depreciation and amortization expenses

Depreciation and amortization expenses for the year ended December 31, 2006 were lower at $2.2 million compared to $2.9
million in December 31, 2005. The decrease is mostly due to deferred development costs that were fully amortized at the
beginning of the year.

Net results

The Company incurred a net loss of $30.5 million, or $0.20 per share, for the year ended December 31, 2006 as compared
to a net loss of $22.9 million, or $0.20 per share for the year ended December 31, 2005. This signiﬁcant increase in net loss
is mainly due to the lower revenues and an increase in research and development expenses. Interest expenses resulting from the
payment of the convertible note was offset by the decrease of the write downs of investments in Hemosol and Arriva
Pharmaceuticals which were made in 2005.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Liquidity and Financial Position

Current assets totalled $26.0 million as at December 31, 2006 compared to $15.9 million on December 31, 2005.

Accounts receivables decreased to $2.3 million for the year ended December 31, 2006, compared to $2.9 million in the year
ended December 31, 2005. Accounts receivables consist mostly of research and development tax credits receivables and trade
receivables. The decrease in accounts receivables is mainly attributed to the resolution of the prior years’ adjustments for
investment tax credits.

The net capital assets decreased to $4.5 million in 2006, from $5.3 million in 2005, and are mainly attributable to lower capital
expenditures in 2006.

Cash Flows

Cash ﬂows used in operating activities amounted to $22.8 million for the year ended December 31, 2006, compared with
$15.4 million in 2005. The decrease in cash ﬂows used for operating activities is mainly attributed to lower revenues and an
increase in research and development expenses.

Cash ﬂows from ﬁnancing activities amounted to $34.9 million for the year ended December 31, 2006 compared to $21.6 million
in 2005. During 2006, the Company issued 94.7 million voting shares. The issuance of shares for 2006 is composed of a closing
of a private placement with JP Morgan and Third Point LLC for $10.8 million by issuing 29.6 million shares at $0.365. In
addition, the Company closed a $17.1 million equity ﬁnancing in December 2006 with US and Canadian institutions in two
tranches: one of 36.6 million shares at $0.25 and one of 28.5 million shares at $0.28. Finally, a non-convertible debt facility
was secured in December 2006. Most of the proceeds of that debt facility were used to reimburse the convertible note that was
contracted in December 2005 and January 2006. These fund raising activities concluded in December 2006 will enable the
Company to pursue its business plan, complete the restructuring of its business units and work towards achieving proﬁtability.

Cash ﬂows used in investing activities amounted to $1.8 million compared with $2.4 million for 2005 and was mostly the result
of the acquisition of the remaining (PPPS) licensing rights from the American Red Cross.

Off-Balance Sheet Arrangements

In the normal course of business, the Company ﬁnances certain of its activities off-balance sheet through leases. On an ongoing
basis, we enter into operating leases for buildings and equipment. Minimum future rental payments under these operating leases,
determined as at December 31, 2006, are included in the contractual obligations table below.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL POSITION

Contractual obligations

In the normal course of operations, the Company has entered into several contracts providing for the following payments over
the next few years:

(in thousands of Canadian dollars)

Long-term debt
Operating leases

Total contractual
obligations

Total

11,577
7,744

Less than
1 year

2,678
2,062

Payments due by period
1–2
years

8,893
3,398

3–4
years

6
1,562

19,321

4,740

12,291

1,568

After
4 years

-
722

722

Critical Accounting Estimates

The preparation of ﬁnancial statements in accordance with Canadian GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during
the reporting periods. We have identiﬁed the following accounting policies that we believe require application of management’s
subjective judgment, often requiring the need to make estimates about the effect of matters that are inherently uncertain and may
change in subsequent periods. Our actual results could differ from these estimates and such difference could be material.

Impairment of long-lived assets

Management reviews the valuation and amortization of licenses and patents on an ongoing basis, taking into consideration any
events and circumstances which may impair value. The Company assesses impairment in a two-step process, ﬁrst determining
when an impairment loss is recognized and then measuring that loss.

Research and development expenses

Research expenditures (net of related tax credits) are expensed as incurred and include reasonable allocation of overhead expenses.
Development expenditures (net of related tax credits) are deferred when they meet the criteria for capitalization in accordance
with Canadian GAAP, and the future beneﬁts could be regarded as being reasonably certain. Related tax credits are accounted
for as a reduction to research and development expenditures on condition that the Company is reasonably certain that these
credits will materialize. During 2006 and 2005, no development costs were deferred.

Stock-based compensation and warrants

When the Company issues warrants and stock options to its employees, directors and ofﬁcers, a fair value is derived using the
Black Scholes pricing model. The application of this pricing model requires management to make assumptions regarding several
variables, including the expected life of the options and warrants, the price volatility of the Company’s stock over a relevant
timeframe, the determination of a relevant risk-free interest rate and an assumption regarding the Company’s dividend policy
in the future. For the year ended December 31, 2006, the Company expensed $142,000 for stock-based compensation
compared to $159,000 for the same period in 2005. As for the warrants, $2,320,000 was attributed to the contributed surplus
in 2006 compared to $3,166,000 for the same period in 2005.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Capital Stock Information

Authorized

The authorized share capital of the Company consists of an unlimited number of subordinate voting shares, twenty million
(20,000,000) multiple voting shares, and an unlimited number of preferred shares that can be issued in series.

Issued and outstanding

The following details the issued and outstanding equity securities of the Company:

Subordinated Voting Shares and Multiple Voting Shares
As at December 31, 2006 the capital stock issued and outstanding consisted of 234,670,814 participating subordinate voting
shares (116,501,784 as at December 31, 2005). During the year all multiple voting shares were converted in subordinate
voting shares.

Share purchase warrants
The following is a summary of the share purchase warrants outstanding as at December 31, 2006:

Issue Date

Expiry Date

Number outstanding

Exercise Price

December 2005
January 2006
September 2006
December 2006

December 2010
January 2011
September 2011
December 2009

20,584,092
2,999,394
5,000,855
1,786,187

US$0.30
US$0.30
$0.3133
$0.324

Stock options
As at December 31, 2006, the Company has 3,031,500 stock options outstanding with exercise prices ranging from $0.31
to $3.00. At December 31, 2006, on an if-converted basis, these stock options would result in the issuance of 2,156,190
subordinate voting shares at an aggregate exercise price of $1.21.

Outlook

In 2007, the Company will continue the implementation of the planned restructuring of its four business units so they will function
independently as four distinct subsidiaries in terms of attracting investment and developing speciﬁc products and services.

Each operating unit has a different risk/reward proﬁle.

The ProMetic BioSciences Inc. (PBI) (Therapeutic) unit faces higher risk factors but offers potentially substantial rewards from drug
discovery and clinical trial development. Risk factors include the time necessary to bring a therapeutic product / drug to market,
the costs associated with its development, and the regulatory environment. To minimize these risks, PBI is actively looking for co-
development strategic alliances with larger pharmaceutical companies offering expertise and the ﬁnancial strength to undertake
advanced clinical trials and commercial launch of PBI’s promising compounds PBI-1402 and PBI-1393. PBI does not expect,
however, that such transactions will be possible before the completion of additional clinical studies for each of its two lead
compounds.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

MANAGEMENT’S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL POSITION

The ProMetic BioTherapeutics, Inc. (PBT) unit has a solid foundation for the technology, its commercial applicability has been
validated, and it has gained considerable attention within the plasma and blood industry. PBT will promote its technology
platform not only with a view to licensing it as a complete plasma protein puriﬁcation system for fractionators but will also
promote it as a platform adaptable for plasma fractionators seeking to harvest single proteins more efﬁciently. Moreover, the
platform can be applied to the recovery of certain proteins such as A1Pi that have established therapeutic value, but cannot be
extracted effectively via current manufacturing practices. These proteins have the potential to receive “orphan drug” status and,
if so, could be advanced to commercial status with the support of regulatory authorities and patient associations.

The ProMetic BioSciences Ltd (PBL) unit has generated revenue from sales of its Mimetic LigandTM product line since 2003 and
expects a 2007 commercial launch of the P-CaptTM prion ﬁlter by Pathogen Removal and Diagnostic Technologies (PRDT) commercial
and manufacturing partner, MacoPharma, to help generate additional revenues from resin sales.

The BSafE Innovation Inc. (BSafE) unit is working on diagnostic tools for the detection of BSE or better known as Mad Cow
Disease, in live cattle based on a technology licensed to ProMetic by PRDT. BSafE aims initially at improving the sensitivity of
current post mortem diagnostic tests available on the market but which can detect the disease only for animals of a certain age
or after a certain incubation period. The Company believes that the sale of the technology for improving these tests could
generate revenues in a relatively short period of time. In the longer term, a full BSE ante mortem diagnostic kit could be developed
by BSafE alone or in partnership with other players in the animal diagnostic market.

Risks and Uncertainties

Until each of the units is independently financed, the success of the Company is dependent on its ability to support the
development of its four operating units and its ability to bring its products to market, obtain the necessary regulatory approvals
and achieve future proﬁtable operations. This is dependent on the Company’s ability to obtain adequate ﬁnancing through a
combination of ﬁnancing activities and operations. It is not possible to predict either the outcome of future research and
development programs nor the Company’s ability, nor its operating units’ ability, to fund these programs going forward.

Forward-Looking Statements

The information contained in Management’s Discussion and Analysis of Operating Results and Financial Position contains statements
regarding future ﬁnancial and operating results. It also contains forward-looking statements with regards to partnerships, joint
ventures and agreements and future opportunities based on these. There are also statements related to the discovery and development
of intellectual property as well as other statements about future expectations, goals and plans. We have attempted to identify
these statements by use of words such as “expect”, “believe”, “anticipate”, “intend”, and other words that denote future events.
These forward-looking statements are subject to material risks and uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. These risks and uncertainties include but are not limited to the Company’s ability
to develop, and successfully manufacture pharmaceutical products, and to obtain contracts for its products and services and
commercial acceptance of advanced afﬁnity separation technology. Additional information on risk factors can be found in the
Company Annual Information Form for the year ended December 31st, 2006. Shareholders are cautioned that these statements
are predictions and these actual events or results may differ materially from those anticipated in these forward-looking
statements.

Any forward-looking statements we may make as of the date hereof are based on assumptions that we believe to be reasonable
as of this date and we undertake no obligation to update these statements as a result of future events.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Disclosure Controls and Procedures

Based on an evaluation of the effectiveness of ProMetic’s disclosure controls and procedures, the President and Chief Executive
Ofﬁcer and the Vice-President, Finance have concluded that disclosure controls and procedures were effective as of December
31, 2006 and that their design provides reasonable assurance that material information relating to ProMetic, including its
consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which the
annual ﬁlings are being prepared.

Summary of Quarterly Results

The following unaudited quarterly information is presented in millions of Canadian dollars except for per share amounts:

Dec. 31
2006

Sept. 30
2006

June 30 March 31
2006

2006

Dec. 31
2005

Sept. 30
2005

June 30 March 31
2005

2005

Revenues
Net loss
Net loss per share
Weighted average number
of outstanding shares

1.1
9.9
0.06

0.4
7.0
0.04

167

160

0.6
7.1
0.05

138

0.5
6.3
0.05

130

1.2
7.8
0.06

130

0.5
5.6
0.04

129

1.1
7.4
0.07

104

5.2
2.0
0.02

Fourth Quarter

The following information is a summary of selected unaudited consolidated ﬁnancial information of the Company for the three-
month periods ended December 31, 2006 and 2005.

(in thousands of Canadian dollars)

Revenues
Operating expenses
Operating loss
Provision related to a lawsuit
Recover (write-down) of investments
Net interest expenses
Net loss

2006

2005

1,105
7,649
6,544
(43)
153
(3,514)
9,948

1,217
5,167
3,950
(34)
(3,833)
(17)
7,834

Revenues are stable during the fourth quarter and are related to the shipment of products and ligand development contract
execution from PBL.

Higher operating expenses in the fourth quarter of 2006 are mainly due to the legal expenses related to the litigation with
Hemosol.

The net loss increased signiﬁcantly because of the interest charges related to the repayment of the convertible note.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Management’s Report

The accompanying consolidated ﬁnancial statements for ProMetic Life Sciences Inc. are Management’s responsibility and have
been approved by the ProMetic Board of Directors. These ﬁnancial statements were prepared in accordance with Canadian
generally accepted accounting principles. They include some amounts that are based on estimates and judgments. The ﬁnancial
information contained elsewhere in the annual report is consistent with those obtained in the ﬁnancial statements.

To ensure the accuracy and the objectivity of the information contained in the ﬁnancial statements, the Management of ProMetic
Life Sciences Inc. maintains a system of internal accounting controls. Management believes that this system gives a reasonable
degree of assurance that the ﬁnancial documents are reliable and provide an adequate basis for the ﬁnancial statements, and
that the Company’s assets are properly accounted for and safe-guarded.

The Board of Directors upholds its responsibility for the ﬁnancial statements in this annual report primarily through its audit
committee. The audit committee is made up of independent directors who review the Company’s annual consolidated statements,
as well as management’s discussion and analysis of operating results and ﬁnancial position, and recommend their approval by
the Board. Raymond Chabot Grant Thornton, LLP, Chartered Accountants, the external auditors designated by the shareholders,
periodically meet with the audit committee to discuss auditing, the reporting of ﬁnancial information and other related subjects.

(Signed Pierre Laurin)

(Signed Stéphane Archambault)

Pierre Laurin
Chairman, President
and Chief Executive Ofﬁcer

Stéphane Archambault
Vice-President, Finance

Montréal, Canada
February 23, 2007

Auditors’ Report to the Shareholders

We have audited the consolidated balance sheets of ProMetic Life Sciences Inc. as at December 31, 2006 and 2005 and the
consolidated statements of operations, deﬁcit, contributed surplus and cash ﬂows for the years then ended. These ﬁnancial statements
are the responsibility of the Company’s management. Our responsibility is to express an opinion on these ﬁnancial statements
based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we
plan and perform an audit to obtain reasonable assurance whether the ﬁnancial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the ﬁnancial statements. An
audit also includes assessing the accounting principles used and signiﬁcant estimates made by management, as well as
evaluating the overall ﬁnancial statement presentation.

In our opinion, these consolidated ﬁnancial statements present fairly, in all material respects, the ﬁnancial position of the
Company as at December 31, 2006 and 2005, and the results of its operations and its cash ﬂows for the years then ended in
accordance with Canadian generally accepted accounting principles.

(Signed Raymond Chabot Grant Thornton LLP)

Raymond Chabot Grant Thornton LLP
Chartered accountants

Montreal, Canada
February 23, 2007

CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Consolidated Balance Sheets

(In thousands of Canadian dollars)

ASSETS
Current assets

Cash and cash equivalents
Accounts receivable (note 4)
Inventories (note 5)
Prepaid expenses

Investments (note 6)
Capital assets (note 7)
Licenses and patents (note 8)
Deferred ﬁnancing expenses
Deferred development costs

LIABILITIES
Current liabilities

Bank loan (note 9)
Accounts payable and accrued liabilities
Provision related to a lawsuit (note 10)
Deffered revenues
Current portion of liability component of the convertible term notes
Current portion of long-term debt

Liability component of the convertible term notes (note 11)
Long-term debt (note 12)
Provision related to a lawsuit (note 10)
Preferred shares, retractable at the holder’s option

SHAREHOLDERS’ EQUITY
Share capital (note 13)
Contributed surplus
Deﬁcit

The accompanying notes are an integral part of the consolidated ﬁnancial statements.

December 31,
2006

December 31,
2005

$ 20,825
2,298
2,223
647
25,993

2,224
4,484
5,442
2,584
–
$ 40,727

–
5,696
3,084
2,199
–
2,678
13,657

–
8,899
–
2,916
25,472

$ 10,525
2,914
1,935
518
15,892

2,876
5,324
5,098
563
43
$ 29,796

1,029
5,319
–
–
524
366
7,238

3,490
46
2,921
2,248
15,943

181,412
8,022
(174,179)
15,255
$ 40,727

150,697
5,929
(142,773)
13,853
$ 29,796

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.

Consolidated Statements of Operations

(In thousands of Canadian dollars except for per share amounts)

Years ended December 31

REVENUES
Sales and contract
Licensing

CHARGES
Research and development expenses
Administration, marketing and other expenses
Amortization of capital assets
Amortization of license and patents and deferred development costs

2006

2005

2,605
42
2,647

15,288
8,001
1,040
1,204
25,533

4,028
4,024
8,052

13,338
6,742
1,110
1,782
22,972

LOSS BEFORE THE FOLLOWING ITEMS

(22,886)

(14,920)

Provision related to a lawsuit (note 10)
Write-down of short-term investment
Recovery (write-down) of long-term investments
Net interest expenses
Net loss
Net loss per share (basic and diluted)

(163)
–
153
(7,563)
($30,459)
(0.20)

(206)
(5,085)
(2,558)
(163)
($22,932)
(0.20)

Weighted average number of outstanding shares (in thousands)

148,621

115,717

For supplemental operations information see note 14
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

Consolidated Statements of Deﬁcit

(In thousands of Canadian dollars)
Years ended December 31,

DEFICIT, BEGINNING OF YEAR
Net Loss
Share issue expenses
DEFICIT, END OF YEAR

The accompanying notes are an integral part of the consolidated ﬁnancial statements.

2006

2005

$ 142,773
30,459
947
$ 174,179

$ 117,495
22,932
2,346
$ 142,773

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Consolidated Statements of Contributed Surplus

(In thousands of Canadian dollars)
Years ended December 31, 2006 and 2005

Stock-based
compensation

Warrants

Conversion
option on
term notes

Total
contributed
surplus

Other

CONTRIBUTED SURPLUS,
AS AT DECEMBER 31, 2004

$ 99

Stock-based compensation
Term Notes (note 11)

Issuance

Issuance of warrants

as ﬁnancing expenses

CONTRIBUTED SURPLUS, AS AT
DECEMBER 31, 2005

Stock-based compensation
Term Notes (note 11)

Issuance
Conversion
Cancellation pursuant

to payment

Issuance of warrants as

ﬁnancing expenses (note 12)

CONTRIBUTED SURPLUS,
AS AT DECEMBER 31, 2006

–

2,342

2,505

824

–

159

–

$ 258

$ 3,166

$ 2,505

–

429
(798)

142

–
–

–

401
–

–

1,919

$ 400

$ 5,486

(2,136)

2,136

–

1,919

$ 2,136

$ 8,022

–

–
–

159

4,847

824

$ 5,929

142

830
(798)

–

The accompanying notes are an integral part of the consolidated ﬁnancial statements.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.

Consolidated Statements of Cash Flows

(In thousands of Canadian dollars)

Years ended December 31,

Cash ﬂows used in operating activities

Net loss
Adjustments to reconcile net loss to cash ﬂows

used in operating activities
Charges paid with PRDT preferred shares
Write-down of short term investment
Revenues received in shares
Interests on convertible term notes
Stock-based compensation
Write-down of long term investments
Loss (gain) on exchange rate
Amortization of capital assets
Amortization of deferred development costs
Amortization of deferred ﬁnancing expenses
Amortization of licenses and patents

Change in working capital items (note 20)

Cash ﬂows from ﬁnancing activities

Proceeds from share issues
Share issue expenses
Deferred ﬁnancing expenses
Issuance of convertible term notes
Repayment of convertible term notes
Long-term debt
Repayment of long-term debt
Bank loan

Cash ﬂows used in investing activities
Disposal of short term investments
Acquisition of an investment
Additions to capital assets
Grants received
Additions to licenses and patents

2006

2005

$ (30,459)

$ (22,932)

1,276
–
–
794
142
–
403
1,040
43
750
1,150
(24,861)
2,068
(22,793)

27,945
(949)
(62)
1,513
(3,640)
11,512
(348)
(1 029)
34,942

–
–
(267)
–
(1,582)
(1,849)

–
5 085
(3,000)
–
159
2,558
(94)
1,110
947
–
835
(15,332)
(37)
(15,369)

15,015
(1,514)
(373)
8,861
–
1,080
(1,515)
–
21,554

255
( 293)
(3,020)
1,091
(463)
(2,430)

Net increase in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year

10,300
10,525
$ 20,825

3,755
6,770
$ 10,525

For supplemental cash ﬂow information, see note 20
The accompanying notes are an integral part of the consolidated ﬁnancial statements.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Notes to Consolidated Financial Statements

Years ended December 31, 2006 and 2005
(in thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 1. Governing statutes, nature of operations

and going concern

ProMetic Life Sciences Inc.(“ProMetic” or the “Company”), incorporated under the Canada Business Corporations Act, is an
international biopharmaceutical company engaged in the research, development, manufacturing and marketing of a variety of
applications developed from its own exclusive technology platform. The Company owns proprietary technology essential for use
in the large-scale puriﬁcation of drugs, genomics and proteomics products as well as medical and therapeutic applications.

These ﬁnancial statements have been prepared on a going concern basis which assumes that the Company will continue in
operation for the foreseeable future and accordingly will be able to realize its assets and discharge its liabilities in the normal
course of operations. Since inception, the Company has concentrated its resources on research and development. It has had no
net earnings, minimal revenues, negative operating cash ﬂows and has ﬁnanced its activities through the issuance of shares. The
Company’s ability to continue as a going concern is dependent on obtaining additional investment capital and the achievement
of proﬁtable operations. There can be no assurance that the Company will be successful in increasing revenue or raising
additional investment capital to generate sufﬁcient cash ﬂows to continue as a going concern. These ﬁnancial statements do not
reﬂect the adjustments that might be necessary to the carrying amount of reported assets, liabilities and revenues and expenses
and the balance sheet classiﬁcation used if the Company were unable to continue operations in accordance with this assumption.

Note 2. Changes in accounting policies

Standards applicable for the year ended December 31, 2006

Non-monetary transactions

In June 2005, the Canadian Institute of Chartered Accountants (“CICA”) published chapter 3831 “Non-monetary transactions”
replacing chapter 3830 entitled under the same name. The new chapter applies to all non-monetary transactions initiated in
periods beginning on or after January 1, 2006. The main feature of this chapter is the general obligation, unchanged from the
previous chapter 3830, to measure an asset or a liability exchanged or transferred in a non-monetary transaction at fair value.
However, an asset exchanged or transferred in a non-monetary transaction is valued at book value when the transaction has
no commercial substance, when the transaction is an exchange of a product or property held for sale in the ordinary course of
business for a product or property to be sold in the same line of business to facilitate sales to customers other than the parties
to the exchange, when neither the fair value of the asset received nor the fair value of the asset given up is reliably measurable
or when the transaction is recognized as a non-monetary non reciprocal transfer to the beneﬁt to owners. This represents a spin-
off or other form of restructuring or liquidation. The criteria of “commercial substance” replaces the one called culmination of
the earnings process in the previous chapter 3830. Adoption of these recommendations did not affect the ﬁnancial position or
results of operations in the consolidated ﬁnancial statements.

Standards applicable for the year ending December 31, 2007

Comprehensive income

In April 2005, the CICA published chapter 1530 “Comprehensive income” that requires an entity to recognize the change in
equity or net assets during a period from transactions and other events and circumstances from non-owner sources and requires
the introduction of a statement of comprehensive income.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 2. Changes in accounting policies (cont.)

Financial instruments

In April 2005, the CICA published chapter 3855 “Financial instruments – Recognition and Measurement” that provides guidance
on when a ﬁnancial instrument must be recognized on the balance sheet and how it must be measured. It also provides guidance
on the presentation of gains and losses on ﬁnancial instruments.

The transactional impact of these new standards is being evaluated by the Company.

Note 3.

Signiﬁcant accounting policies

These consolidated ﬁnancial statements have been prepared in accordance with Canadian generally accepted accounting principles
(“GAAP”). Signiﬁcant accounting polices are described below.

a) Use of estimates:

The preparation of ﬁnancial statements in accordance with Canadian GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the ﬁnancial statements and the reported amounts of revenues and expenses during the year. Signiﬁcant items
for which management must make estimates relate to the valuation and assessment of recoverability of the investments,
licenses and patents, tax credits and deferred development costs. Reported amounts and note disclosure reﬂect the overall
economic conditions that are most likely to occur and anticipated measures to be taken by management. Actual results
could differ from those estimates.

Basis of consolidation:
The consolidated ﬁnancial statements include the accounts of ProMetic Life Sciences Inc., of its subsidiaries ProMetic BioSciences
Inc., ProMetic BioSciences (USA), Inc., ProMetic BioSciences Ltd, ProMetic BioTherapeutics, Inc., BSafE Innovations Inc. as
well as those of the two joint ventures Arriva-Prometic Inc. and Pathogen Removal and Diagnostic Technologies Inc. (hereinafter
referred to as “A-P” and “PRDT”), which are accounted for on a proportionate consolidation basis whereby the Company’s
proportionate share of its joint ventures’ revenues, expenses, assets and liabilities are consolidated. All signiﬁcant intercompany
transactions and balances have been eliminated.

Cash and cash equivalents:
Cash and cash equivalents are bank deposits and highly liquid investments purchased with a maturity of three months or less.

Inventories:
Inventories of work in progress and ﬁnished goods are valued at the lower of cost and net realizable value, whereas
inventories of raw materials are valued at the lower of cost and replacement cost. Cost is determined on a ﬁrst in, ﬁrst out
basis.

Investments:
The investments are recorded at acquisition cost. When, in management’s opinion, there has been a loss in value of an
investment that is other than a temporary decline, the investment is written down to recognize the loss. In determining the
estimated realizable value of its investment, management relies on its judgment and knowledge of each investment as well
as on assumptions about general business and economic conditions that prevail or are expected to prevail. These
assumptions are limited due to the uncertainty of projected future events.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 3. Signiﬁcant accounting policies (cont.)

Capital assets:
Capital assets are recorded at cost. Amortization is provided over the useful lives of capital assets using the following
method, annual rates and period:

Asset
Leasehold improvements
Equipment and tools
Ofﬁce equipment and furniture
Computer equipment

g) Government grants :

Method
Straight-line
Declining balance
Declining balance
Declining balance

Rate/period
Lease term
10% to 30%
20%
30%

Government grants on capital expenditures are credited to capital assets and are amortized over the expected life of the
relevant assets by equal annual amounts. Grants receivable in connection with operating expenditures are credited to the
consolidated statement of operations in the period in which the expenditures took place.

Licenses and patents:
Licenses and patents include vested rights as well as licensing fees for product manufacturing and marketing. Amortization
is provided over the useful lives of the licenses and patents acquired using the straight-line method ranging up to 20 years.
Management reviews the valuation and amortization of licenses and patents on an ongoing basis, taking into consideration
any events and circumstances which may impair its value. The Company assesses impairment in a two-step process for ﬁrst
determining when an impairment loss is recognized and then measuring that loss.

Research and development:
Research expenditures (net of related tax credits) are expensed as incurred and include a reasonable allocation of overhead
expenses. Development expenditures (net of related tax credits) are deferred when they meet the criteria for capitalization
in accordance with Canadian GAAP, and the future beneﬁts could be regarded as being reasonably certain. Related tax
credits are accounted for as a reduction to research and development expenditures on condition that the company is reasonably
certain that these credits will materialize. During ﬁscal years ended December 31, 2006 and 2005, no development costs
were deferred.

Deferred ﬁnancing expenses:
Deferred ﬁnancing expenses are amortized using the straight line method over the term of the long-term debt.

Revenue recognition:
The Company earns revenue from research and development collaboration services, licensing fees and products sales.
Payments received under collaborative research and development agreements, which are non-refundable, are recorded as
revenue as services are performed and the related expenditures incurred pursuant to the terms of the agreement and
provided collectibility is reasonably assured. Non-refundable up-front license fees from collaborative licensing and development
arrangements are recognized as the Company fulﬁlls its obligations related to the various elements within the agreements,
in accordance with the contractual arrangements with third parties and the term over which the underlying beneﬁt has been
conferred.

Revenues associated with multiple element arrangements are attributed to the various elements based on their relative fair
value. Any up-front license payments received under an agreement whereby the Company also provides research and
development services are recognized as revenue over the term of the research and development period. Revenue earned
under contractual arrangements upon the occurrence of speciﬁed milestone is recognized as the milestones are achieved
and collection of payment is reasonably assured.

Revenue from product sales is recognized when the following criterias are met: i) there is persuasive evidence that an
arrangement exists; ii) products are shipped; iii) the selling price is ﬁxed or determinable; iv) collectibility is reasonably
assured. Cash or other compensation received in advance of meeting the revenue recognition criteria is recorded as
deferred revenue on the consolidated balance sheet.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 3. Signiﬁcant accounting policies (cont.)

Foreign currency translation:
The Company’s foreign subsidiaries are considered as integrated foreign operations. Foreign denominated monetary assets
and liabilities of Canadian and foreign operations are translated into Canadian dollars using the temporal method.
Under this method, monetary assets and liabilities are translated at year-end exchange rates while non-monetary items are
translated at historical exchange rates. Expense items are translated at the exchange rates on the transaction date or at
average exchange rates prevailing during the year. Exchange gains or losses are included in the consolidated statement of
operations.

Income taxes:
The Company uses the liability method of accounting for income taxes. Future income tax assets and liabilities are
recognized in the balance sheet for the future tax consequences attributable to differences between the ﬁnancial statement
carrying values of existing assets and liabilities and their respective income tax bases. Future income tax assets and liabilities
are measured using income tax rates expected to apply when the assets are realized or the liabilities are settled. The effect
of a change in income tax rates is recognized in the year during which these rates change. Future income tax assets are
recognized and a valuation allowance is provided if realization is not considered “more likely than not”.

Stock-based compensation:
The Company maintains a stock option plan as described in note 13 c). The Company uses the fair value method to account
for all stock-based payments to non-employees that have been awarded on or after January 1, 2002. The stock base
compensation to employees is measured at the grant date based on the fair value of the award and is recognized over the
related service period.

Earnings per share :
Basic earnings per share are calculated using the weighted average number of common shares outstanding during the year.
Diluted earnings per share are calculated using the treasury stock method giving effect to the exercise of options and
warrants. The treasury stock method assumes that any proceeds that could be obtained upon the exercise of options and
warrants would be used to repurchase common shares at the average market price during the year.

Share issue expenses:
The company record share issue expenses in the consolidated statement of deﬁcit.

Note 4. Accounts receivable

Trade*
Sales taxes receivable
Tax credits receivable (note 9)
Advance to an ofﬁcer, without interest
Accrued interest and other

2006

2005

$ 1,143
201
710
6
238
$ 2,298

374
164
2,225
22
129
$ 2,914

* The trade accounts include amounts receivable from two customers, which represent approximately 53% of the Company’s total trade accounts

receivable in 2006 and two customers representing approximately 70% of total trade receivable in 2005.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

2006

2005

440
1,783
$ 2,223

389
1,546
$ 1,935

Note 5.

Inventories

Raw materials
Work in progress and ﬁnished goods

Note 6.

Investments

Convertible preferred shares of AM-Pharma Holding B.V.

358

2006

2005

Guaranteed Investment Certiﬁcate, 3.5%, expiring in June 2007

pledged as security of a letter of credit to a supplier
expiring in November 2010

Cash subject to certain limitations

Excess of interest in the joint venture PRDT

over proportionate share in consolidated net assets

200

1,583
$ 2,224

2,248
$ 2,876

The consolidated ﬁnancial statements include the Company’s proportionate share of the revenues, expenses, assets and liabilities
of PRDT and of A-P as follows:

Current assets
Long-term assets
Total liabilities
Total revenues
Total expenses

Net loss

Cash ﬂows from:
Operations
Investing

PRDT (a)
1
1,582
2,916 (b)
346
3,050

2,704

A-P (note 8c)

1
898
6
–
828

828

2006
Total
2
2,480
2,920
346
3,878

3,532

2005
Total
1
4,056
2,254
424
2,342

1,918

–
–

(11)
34

(16)
(19)

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 6. Investments (cont.)

The Company has a joint venture with the American Red Cross and two other partners under the legal name Pathogen
Removal and Diagnostic Technologies Inc. (“PRDT”) in which the Company owns 26% of the voting shares. PRDT is engaged
in the research, development and commercialization of pathogen diagnostic and removal systems.

Under the terms of the joint venture agreement, ProMetic and the American Red Cross will each contribute intellectual
property and technical expertise to develop pathogen diagnostic and removal systems. They both equally assume the direct
costs of the joint venture. Preferred shares including a 14% cumulative dividend will be issued by PRDT to the Company
and to the American Red Cross in consideration of their proportionate shares in direct and indirect costs.

(b)

The PRDT joint venture has issued preferred shares in consideration of the proportionate share of each partner in direct
and indirect costs. These preferred shares are retractable at the holder’s option, provided that PRDT has sufﬁcient cash ﬂows,
and include a 14% cumulative dividend effective January 1, 2003. Since the shares issued by the joint venture are
retractable at the holder’s option, they are considered as debt rather than share capital. Thus, as part of the proportionate
consolidation, the Company must acknowledge 26% of the shares issued to the American Red Cross as a debt to a third party.

Note 7. Capital assets

Leasehold improvements
Equipment and tools
Ofﬁce equipment and furniture
Computer equipment

Accumulated amortization

Net book value

2006
Accumulated
amortization

Cost

$ 1,250
4,345
416
740
6,751

$ 3,357
6,121
700
1,057
11,235

6,751

$ 4,484

2005
Accumulated
amortization

845
3,909
346
611
5,711

Cost

$ 3,252
6,092
675
1,016
11,035

5,711

$ 5,324

Deferred capital grants for a total of $ 67 in 2006 and of $1,091 in 2005 received from the Isle of Man government are credited
to the cost of capital assets (see note 22).

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 8. Licenses and Patents

Licenses
Patents

Accumulated amortization

Net book value

2006
Accumulated
amortization

$ 3,439
344
3,783

Cost

$ 7,159
2,066
9,225

3,783

$ 5,442

Cost

$ 6,700
1,237
7,937

2,839

$ 5,098

2005
Accumulated
amortization

$ 2,527
312
2,839

The Company owns the rights, title and interest in and to the know-how, information, technology and patents relating to its
Mimetic Ligand™ technology. A portion of these rights, title and interest were assigned to the Company by Cambridge
University’s Institute of Biotechnology in consideration of the payment of continuing royalties; the others having been developed
by the Company.

b) As of April 13, 1999, through its subsidiary, ProMetic BioSciences Inc., the Company entered into a 50-50 joint venture,
Arriva-Prometic Inc., with Arriva Pharmaceuticals, Inc. (“Arriva”) for the development of applications relating to serine
protease inhibitors as a platform for various pharmaceutical products for dermatological (eczema, psoriasis, genital herpes)
and gastrointestinal (Crohn’s disease, irritable bowel syndrome) treatments and urinary tract indications. The ﬁrst serine
protease inhibitor pursued is recombinant alpha 1-antitrypsin (“rAAT”), a compound produced in genetically-engineered
yeast cells.

Arriva has granted Arriva-ProMetic an exclusive, perpetual license to develop, manufacture and commercialize these serine
protease inhibitors, and the Company has granted Arriva-ProMetic an exclusive, perpetual license for the use of its Mimetic
Ligand™ puriﬁcation technology for the indications within the scope of the joint venture. The Company has also undertaken
to fund the joint venture to a maximum of US$4 million of which US$57,000 has been contributed in 2006 for a total of
US$3,928,000 and US$3,871,000 in 2005. The Company will progressively record 50% of its US$4 million contribution
as intellectual property. In 2006, the Company recorded an amount of $34 as intellectual property, $19 in 2005 for a total
of $2,724 in 2006 and of $2,690 in 2005.

c) On June 6, 2002, the Company acquired for $400 a worldwide exclusive license to patents, preclinical data and know-
how pertaining to three therapeutic compounds (immunomodulators and adjuvants) for human applications. The Company
will make further improvements to the compounds and milestone payments are to be made if positive results are achieved
upon completion of the main development phases. Furthermore, the Company will pay royalties on the sales of compound-
based products.

The purpose of the strategic alliance between the Company and the American Red Cross signed in January 2003 is to co-
develop the Cascade process and license to third parties proprietary technology for the recovery and puriﬁcation of
valuable therapeutic proteins from human blood plasma. The Cascade process integrates novel technologies in a sequence
that is expected to signiﬁcantly improve both the yield and range of valuable proteins capable of being isolated from human
plasma. In April 2006, the Company paid the American Red Cross US$1,000,000 for an exclusive license for access to
and use of intellectual property rights for the Plasma Protein Puriﬁcation System (“PPPS”) project. ProMetic will be collecting
revenues deriving from any licensing activities, such as royalties on net sales, lump sum amounts and/or milestone
payments. ProMetic will pay a royalty to the American Red Cross of 12% of all sales products to third parties. Also, every
year, an annual minimum royalty of US$30,000 should be paid.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 8. Licenses and Patents (cont.)

e) An ofﬁcer is entitled to receive royalties based on the sales of certain products submitted to ProMetic before joining the
Company. These royalties are 0.5% of net sales or 3% of revenues received by the Company. This employee also has the
exclusive right to commercialize these products should ProMetic decide to stop developing and (or) commercializing them,
subject to mutually acceptable terms and conditions.

In the normal course of business, the Company enters into license agreements for the market launching or commercialization
of intellectual property. Under these licenses, including those mentioned above, the Company has committed to pay royalties
ranging generally between 0.5% and 10% of net sales from products it commercializes.

Note 9. Bank loan

Bank loan of ProMetic BioSciences Inc., a wholly-owned subsidiary
of the Company, related to research and development tax credits bearing
interest at prime plus 1.75% (6.75 % as at December 31, 2005).
The bank loan expired in 2006.

2006

2005

–

$ 1,029

Note 10. Provision related to a lawsuit

As a result of the Québec Superior Court decision (the “Decision”) in favor of the Bank of Montreal in December 2004, a non-
recurring expense of $163 ($206 in 2005) has been recorded in the consolidated statement of operations. A total of $3,084
($2,921 in 2005) has been recorded in the accrued liabilities. In January 2005, the Company appealed the Decision, and at
year end was awaiting a hearing date before the Québec Court of Appeals.

Furthermore, a legal hypothec in the amount of $2,762 (with interests and additional indemnity as provided for by law) resulting
from the Decision, was registered on December 23, 2004 in favor of Bank of Montreal and charging certain movable assets of
ProMetic Life Sciences Inc. (“PLI”), including shares held by it in the share capital of all its subsidiaries, as well as in PRDT, and
any sums lent to such entities by PLI.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 11. Convertible Term Notes

On December 30, 2005, the Company issued Secured Convertible Term Notes with a principal amount to be paid of
US$9.538 million ($11,120) for a total cash consideration of US$7.6 million ($8,861). Additional notes with a principal amount
of US$1.634 million ($1,905) for a total cash consideration of US$1.302 million ($1,513) were issued in January 2006. The
notes were issued at an original issue discount of 20.32% and have an effective interest rate of 63.19%.

During the year, some of the note holders converted part of their investment resulting in an issuance of 10,404,826 subordinate
voting shares. The portion of the convertible term notes ($1,972) and the conversion option in the contributed surplus ($798),
attributed to the notes, was credited to the share capital.

The notes were fully paid in December 2006 pursuant to a long-term debt the Company contracted (see note 12).

In total, warrants to purchase 20,507,379 subordinate voting shares were issued to the holders at an exercise price of US$0.30
per share and are exercisable for a period of ﬁve years. 17,507,985 warrants were issued in 2005 and 2,999,394 were issued
in January 2006. In addition, 3,076,107 warrants with an exercise price of US$0.30 per share were issued in 2005 as compensation
warrants to the Company’s agent.

For accounting purposes, the notes contain both a liability component and an equity component (the holder’s conversion option
and the warrants). The value of the liability component has been determined by discounting the future repayments at discount
rate which represents the estimated borrowing rate available to the Company for similar notes having no warrants and no
conversion rights. The fair values of the warrants and the holder’s conversion option were determined using the Black Scholes
option pricing model using the following assumptions:

Risk-free interest rate
Dividend yield
Expected volatility of share price
Expected life

Conversion option

Warrants

4.37-4.41%
0%
70-80%
9-36 months

4.35%
0%
70-80%
5 years

The estimated fair value was adjusted on a prorata basis, to ensure that the fair value assigned to the components equals the
total cash consideration received for the issuance of the term notes.

The equity component of shareholder’s equity is recorded separately. The other issuance costs incurred related to the Note have
been accounted for as deferred ﬁnancing cost for the portion attributable to the liability component and as share issue expenses
for the portion attributable to the equity component.

As at December 31, 2006, the following warrants related to the convertible term notes were outstanding:

Warrants

20,584,092
2,999,394

Expiry date

Exercise price

December 2010
January 2011

US$0.30
US$0.30

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 12. Long-term debt

Loan with a nominal value of US$10,000,000,
guaranteed by all assets of the Company, bearing
interest at 15.034 %, payable with monthly instalments
of US$433,250 starting in June 2007. Maturing in
August 2009. (a)

Loan secured by the Company and a ﬁrst mortgage
on the capital assets ﬁnanced by such loan,
bearing interest at 9.5%, payable with monthly
instalments of $7, maturing in June 2007

Obligations under capital leases payable in
monthly instalments of $1, maturing in December 2008
and December 2010

Current portion of long term debt

The instalments on the long-term debt for the next years are as follows:

Year ending December 31:

2007
2008
2009
2010

Current portion

2006

2005

$2,630

$11,512

$ –

2,678

11,577

2,678
$8,899

412

–

412

366
$ 46

$ 2,678
5,068
3,825
6

(a) 5,000,855 warrants with an exercise price of $0.3133 per share were issued to the lender as compensation for making
the loan commitment. If in September 2007, the fair market value of the Company’s subordinate voting shares are less than
four (4) times the value of the exercise price, the Company shall be required to compensate the lender with a payment of
US$ 1,400,000 which will be offset by the obligation by the lender to exercise its 5,000,855 warrants, at the agreed-to
exercise price.

Furthermore, 1,786,187 warrants with an exercise price of $0.324 were issued as compensation warrants to the
Company’s agent.

The fair value of the warrants was determined using the Black-Scholes options-pricing model with the following assumptions:
Expected dividend yield of 0%, expected volatility of 70%-80% and 82%, risk-free interest rates of 3.96% and 4.12% and
expected life of three and ﬁve years. The estimated fair values of the warrants at the date of grant were respectively $0.298
and $0.24. The total value of the warrants of $1,919 is accounted as deferred ﬁnancing expenses. Considering the
warrants and other expenses incurred for the long-term debt, the effective interest rate is 32.75%.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 12. Long-term debt (cont.)

As at December 31, 2006, the following warrants related to the long-term debt were outstanding:

Warrants

5,000,855
1,786,187

Expiry date

September 2011
December 2009

Exercise price

$ 0.3133
$ 0.324

Note 13. Share capital

Authorized and without par value:

Unlimited number of subordinate voting shares, participating, carrying one vote per share.

20,000,000 multiple voting shares, participating, carrying ten votes per share, convertible at the option of the holder or automatically
converted upon their sale to a third party by the holder into an equal number of subordinate voting shares.

Unlimited number of preferred shares, no par value, issuable in one or several series.
1,050,000 preferred shares, series A, non-participating, non-voting, convertible at the option of the holder into subordinate
voting shares at $0.50 per share except for unpaid dividends, convertible at a rate equal to the trading average of the
subordinate voting shares on the Toronto Stock Exchange during the 20 business days prior to the conversion, preferential cumulative
dividend of 12% per year, payable quarterly.

950,000 preferred shares, series B, non-participating, non-voting, convertible at the option of the holder into subordinate voting
shares at $0.60 per share except for unpaid dividends, convertible at a rate equal to the trading average of the subordinate
voting shares on the Toronto Stock Exchange during the 20 business days prior to the conversion, preferential cumulative
dividend of 12% per year, payable quarterly.

Number

2006
Amount

Number

2005
Amount

Issued and fully paid:
Subordinate voting shares
Multiple voting shares
Share purchase loan to an ofﬁcer,

without interest and due no later than 2009

Balance, at end of year

234,670,814
–

$ 181,862
–

116,501,784
13,026,375

$ 149,584
1,563

(450)

$ 181,412

(450)

$ 150,697

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 13. Share capital (cont.)

Share issue:
Changes in the issued and outstanding subordinate voting shares were as follows:

Balance, at beginning of year

116,501,784

$ 149,584

86,486,784

$ 134,569

Number

2006
Amount

Number

2005
Amount

Shares issued pursuant to:
Conversion of multiple

voting shares
Private offerings
Public offerings
Conversion of convertible

notes (note 11)
Exercise of options

13,026,375
29,600,000
65,137,829

10,404,826
–

1,563
10,804
17,141

2,770
–

–
–
30,000,000

–
15,000

–
–
15,000

–
15

Balance, end of year

234,670,814

$ 181,862

116,501,784

$ 149,584

During the year 2006, the multiple voting shares were converted to subordinate voting shares on a ratio 1:1. In 2006 and
in 2005, all subordinate voting shares from private and public offerings were issued for a cash consideration.

b) Stock options:

The Company has established a stock option plan for its directors, ofﬁcers and employees or service providers. The plan
provides that the aggregate number of shares reserved for issuance at any time under the plan and any other employee
incentive plans may not exceed 6,000,000 subordinate voting shares. Some options may be exercised in a period not
exceeding 10 years from the date they were granted. Since September 10, 2001, the new options issued may be exercised
over a period not exceeding 5 years and 1 month from the date they were granted (options vest 20% per annum). The
exercise price is based on the average strike price of the ﬁve business days prior to the grant.

Year of grant

1997
1998
1999
2000
2001
2002
2003
2004
2005
2006

Exercise price

Number of options outstanding
2005

2006

$1.50
$2.00 to $3.00
$1.00 to $2.00
$1.35
$1.60
$2.70
$2.70
$2.70
$1.00
$0.31 to $0.41

75,000
51,000
1,340,500
200,000
15,000
19,000
48,500
155,700
250,000
1,776,800
3,931,500

75,000
51,000
1,386,500
200,000
572,500
19,000
63,800
279,575
350,000
–
2,997,375

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 13. Share capital (cont.)

The following table summarizes the changes in the number of stock options outstanding over the last two years:

Number of options as at December 31, 2004
2005 Granted
Exercised
Cancelled

Number of options as at December 31, 2005

2006 Granted
Exercised
Cancelled
Expired

Number of options as at December 31, 2006

Weighted average
exercise price
per share

$1.62
1.07
1.00
1.98
1.43

0.34
–
1.52
1.33
$0.91

Options

3,615,702
397,500
(15,000)
(1,000,827)
2,997,375

1,896,800
–
(355,675)
(607,000)
3,931,500

A compensation expense of $142 in 2006 and $159 in 2005 was recorded as a result of stock options granted to directors,
ofﬁcers, employees and consultants.

The following table summarizes information about stock options outstanding as at December 31, 2006:

Range of
exercise prices

– to $0.45
$
$1.00 to $1.49
$1.50 to $1.75
$1.76 to $3.00

Number
outstanding

1,776,800
1,543,500
90,000
521,200
3,931,500

Weighted
average
remaining
contractual
life (in years)

4.72
3.82
1.29
3.03

Weighted
average
exercise
price

$ 0.34
1.05
1.52
2.40

Weighted
average
exercise
price

$ 0.41
1.05
1.51
2.26

Number
exercisable

215,750
1,493,500
87,000
359,940
2,156,190

As at December 31, 2005, 2,368,835 stock options were exercisable.

Stock-based compensation and other stock-based payments:
The Company uses the Black-Scholes option valuation model to calculate the fair value of options at the date of grant, using
the following assumptions:

Risk-free interest rate
Dividend yield
Expected volatility of share price
Expected life

2006

2005

4.28%
0%
73.90%
5 years

3.56%
0%
73.70%
5 years

The estimated fair value of options granted during the year ended December 31, 2006 is $0.21. In 2005, it was $0.44.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 14.

Information included in the consolidated
statements of operations

Amortization of capital assets
Amortization of deferred development costs
Amortization of licenses and patents
Gross research and development expenses
Research and development tax credits
Interest on long-term debt and convertible term notes
Interest on short-term debt
Interest income
Gain (Loss) on exchange rate

Note 15. Commitments

2006

1,040
43
1,150
16,098
810
7,766
92
295
(403)

2005

1,110
947
835
15,082
1,744
136
128
101
94

The Company has commitments under various operating leases for the rental of office and laboratory space and office
equipment. The minimum annual payments for the coming years are as follows:

2007
2008
2009
2010
2011
2012 and thereafter

Note 16. Pension plan

2,062
1,762
1,636
1,131
431
722
$ 7,744

The Company contributes to a deﬁned contribution pension plan for all of its permanent employees. The Company matches
employee contributions representing up to 3% of their annual salary. The Company’s contributions for the year are $240
($236 in 2005).

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 17. Financial instruments

Fair value:
The carrying value of cash and cash equivalents, accounts receivable, guaranteed investment certiﬁcates, cash subject to
certain limitations, bank loan, accounts payable and accrued liabilities approximates their fair value because of the near-
term maturity of these instruments. The carrying value of the long-term debt approximates its fair value because it was issued
at year end.

The fair value of the investment AM-Pharma Holding B.V. was not readily determinable because it is a private company.

The fair value of the excess of interest in the joint venture of PRDT over proportionate share in consolidated net assets and
preferred shares retractable at the holder’s option cannot be determined because these are shares of a private joint venture
company at the pre-commercial stage and because it is not possible to determine in which period these shares may be redeemed.

The fair value of the convertible term notes was estimated in 2005 at its issuance as described in note 11.

Credit risk:
The Company reviews a new customer’s credit history before extending credit and conducts regular reviews of its existing
customers’ credit performance.

Foreign exchange risk:
The Company derives a substantial part of its revenues in sterling pounds and the majority of its expenses that are not
denominated in Canadian dollars are incurred in sterling pounds and in United States dollars.

Financial assets, consisting principally of cash and cash equivalents and accounts receivable, denominated in sterling
pounds totaled £1,135,806 in 2006 and £413,651 in 2005 and ﬁnancial liabilities denominated in sterling pounds totaled
£659,538 in 2006 and £1,178,712 in 2005.

Financial assets, consisting principally of cash and cash equivalents in United States dollars totaled US$8,528,000 in 2006
and US$7,080,000 in 2005. Financial liabilities consisting principally of accounts payable, accrued liabilities and long-
term debt, denominated in United States dollars totaled US$10,676,000 in 2006 and US$3,812 000 in 2005.

The Company does not possess nor issue ﬁnancial derivative instruments.

Note 18. Related party transactions

During the year, the Company entered into the following transactions with some of its directors in the normal course of operations:

Consulting fees to directors
Fees to directors

These transactions were measured at the exchange amount.

2006

$ 120
241
$ 361

2005

$208
187
$395

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 19.

Income taxes

The following table reconciles the differences between the domestic statutory tax rate and the effective tax rate used by the
Company in the determination of the income tax expenses:

Net loss
Basic income tax rate
Computed income tax provision

Decrease (increase) in income taxes resulting from:

Unrecorded potential tax beneﬁt arising from current period losses
Effect of tax rate differences in foreign subsidiaries
Non-taxable items
Change in tax rate

Signiﬁcant components of the Company’s net future income tax balances are as follows:

Future income tax assets (a):
Losses carried forward
Share issue expenses
Unused research and development expenses
Accounts payable and accrued liabilities
Deferred revenue
Capital assets

Less: valuation allowance
Net future income tax assets

Future income tax liabilities:

Capital assets
Licenses and patents
Deferred development costs
Net future income tax assets

2006

2005

$ (30,459)
32%
(9,747)

$ (22,932)
31%
(7,109)

5,866
3,671
209
1
$ –

4,876
990
2,275
(1,032)
$ –

2006

2005

$ 13,931
800
5,550
951
–
141
21,373
(21,066)
307

(50)
(257)
–
$ –

$ 14,963
1,056
4,691
1,035
9
122
21,876
(21,127)
749

(76)
(673)
–
$ –

a) During the year, the income tax assets on cumulative losses for the Isle of Man subsidiary were decreased to nil following

a reduction of the tax rate from 10% to 0%. Consequently the valuation allowance was decreased of a similar amount.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 19. Income taxes (cont.)

As at December 31, 2006, the Company had available the following deductions, losses and credits:

Research and development expenses,

without time limit

Losses carried forward expiring in:
2007
2008
2009
2010
2011
2012
2014
2015
2018
2020
2021
2023
2024
2025
2026
Share issue expenses

Canada

Federal

Provincial

Foreign
countries

$ 14,349

$ 23,423

–

2,095
3,976
5,332
5,666
–
–
2,472
1,128
–
–
–
–
–
–
10,219
2,355
33,243

2,336
3,880
5,152
5,073
–
–
2,079
607
–
–
–
–
–
–
9,026
2,355
30,508

–
–
–
–
379
1,163
–
–
434
14
594
939
1,380
935
1,366
–
7,204

As at December 31, 2006, the Company also had unused federal tax credit available to reduce future Canadian taxable income
in the amount of $4,033 and expiring between 2009 and 2026. Those tax credits have not been recorded and no future income
tax liability has been recorded with respect to those tax credits.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 20. Additional information on the

consolidated statement of cash ﬂows

Change in working capital items:
Accounts receivable
Inventories
Prepaid expenses
Accounts payable and accrued liabilities
Provision related to a lawsuit
Deferred revenue

b) Non-cash transactions:

Unpaid additions to capital assets and licenses and patents
Excess of the interest in the joint venture PRDT over the
proportionate share in the consolidated net assets

Preferred shares retractable at the holder’s option
Unpaid share issue expenses
Unpaid deferred ﬁnancing expenses
Shares of Hemosol Corp. received as consideration

of acceptance of milestone

c) Other cash ﬂow information:

Interest paid
Interest earned

Note 21. Segmented information

2006

2005

520
(288)
(129)
(397)
163
2,199
$ 2,068

(100)
(1,014)
271
843
206
(243)
(37)

2
2
204
789

–

6,172
295

193

662
662
205
–

3,000

412
101

During the year, the Company pursued a corporate reorganization resulting in the creation of four distinct business units
functioning independently in terms of management, funding of operations and development of speciﬁc products and services.
The four business units are as follows :

Therapeutics: This unit has two lead compounds, PBI-1402 and PBI-1393, progressing in clinical trials, both of which address
unmet needs of cancer patients undergoing chemotherapy.

BioTherapeutics: It is the developer of a unique, validated, state-of-the-art solution for plasma fractionation, the Plasma Protein
Puriﬁcation System (PPPS).

Bioseparation: It develops and markets bioseparation products based on applications of its patented Mimetic LigandTM technology

BSafE: This unit has in-licensed the veterinary applications of ProMetic’s PRDT. The long term goal of BSafE is to use the validated
PRDT technology for prion reduction in the search for a diagnostic that would certify live cattle as BSE-tested.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Interunit
transactions

Total

(679)

2,647

(631) 15,288

Note 21. Segmented information (cont.)

Revenues and expenses by business unit:
For the year ended December 31, 2006

Therapeutics

BioTherapeutics

Bioseparation

BSafE

Corporate

Revenues

–

3,326

4,223

4,017

7,679

–

Research and
development
expenses

Administration,
marketing
and other

Depreciation
and other
expenses

Net loss

–

1,208

316

6,492

(15)

8,001

216

4,439

206

956

–

7,469

970

9,817

4,223

6,517

316

13,961

1,003

30,459

For the year ended December 31, 2005

Therapeutics

BioTherapeutics

Bioseparation

BSafE

Corporate

Revenues

4,002

–

4,307

Research and
development
expenses

Administration,
marketing
and other

Depreciation
and other
expenses

Net loss

3,623

457

9,562

–

6,576

6,197

–

457

988

3,141

9,384

–

Interunit
transactions

Total

(257)

8,052

(304) 13,338

–

5,787

(33)

6,742

550

637

10,904

6,337

557

22,932

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
YEARS ENDED DECEMBER 31, 2006 AND 2005.
(In thousands of Canadian dollars except for number of shares or as otherwise speciﬁed)

Note 21. Segmented information (cont.)

Revenues by geographic segment (1):

Canada
United States
United Kingdom
Europe (excluding United Kingdom)
Other countries

2006

–
926
547
1,155
19
$ 2,647

2005

4,340
1,028
491
2,171
22
8,052

(1)Revenues are attributed to countries based on location of customer and not on location of subsidiaries.

The Company derives signiﬁcant revenue from certain customers. In 2006 there were two customers who individually accounted
for 25% and 22% of revenues respectively. In 2005, two customers represented 52% and 12% respectively.

Assets by business unit:

Therapeutics
BioTherapeutics
Bioseparation
Corporate
Interunit transactions

d) Assets by geographic segment:

Canada
United States
United Kingdom

Capital assets and licenses and patents by business units:

Therapeutics
Biotherapeutics
Bioseparation
Corporate
Interunit transactions

Capital assets and licenses and patents by geographic segment:

Canada
United States
United Kingdom

2006

2005

$ 9,197
2,520
10,167
27,455
(8,612)
$ 40,727

$ 10,688
28
8,699
17,942
(7,561)
$ 29,796

2006

2005

$ 28,329
2,583
9,815
$ 40,727

$ 21,344
147
8,305
$ 29,796

2006

2005

$ 2,087
1,156
4,577
196
1,910
$ 9,926

2,082
28
5,167
299
2,846
$ 10,422

2006

2005

$ 3,407
1,201
5,318
$ 9,926

4,558
114
5,750
$ 10,422

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Note 22. Government grants

The Company has received government grants from the Isle of Man Government for operating and capital expenditures.

For grants received prior to 2004, the Isle of Man Government reserves the right to reclaim $275 in part or all of the grants
should the Company leave the Isle of Man within ﬁve years of receipt or should certain events occur within ﬁve years of receipt.
The terms for the grants received amounted to $67 in 2006 and $1,108 in 2005. They are fully repayable if ProMetic
BioSciences Ltd leaves the Isle of Man within ﬁve years of receipt of the grant and thereafter repayable on a sliding scale for up
to a period of ten years.

No provision has been made in these ﬁnancial statements for any future repayment to the Isle of Man Government relating to
the above agreement.

Note 23. Contingencies

Following the introduction in September 2000 of a claim for damages at the Superior Court by ProMetic Life Sciences Inc. (“PLI”)
and ProMetic BioSciences Inc. (“PBI”), a subsidiary of PLI, against a supplier for an amount of $7,726. The supplier has
introduced in April 2004 a cross demand against PLI and PBI claiming for payment as damages of all proﬁts realized from the
sale of Agarose Beads between October 18, 1999 and October 18, 2004.

After obtaining representation from their legal advisers, Management is of the opinion that it has valid grounds for defense and
no provision related to this matter has been recorded in these consolidated ﬁnancial statements in that respect. Settlements, if
any will be charged to the statement of operations in the period in which the settlements occurs.

Note 24. Comparative ﬁgures

Certain 2005 comparative ﬁgures have been reclassiﬁed to conform to the ﬁnancial statement presentation adopted for 2006.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Board of Directors

G.F. Kym Anthony(2) (3)
President and Chief Executive Ofﬁcer
Dundees Securities Corporation

John Bienenstock
Physician, Scientist and Consultant
Distinguished University Professor
McMaster University
Director, Brain-Body Institute
St. Joseph's Healthcare Hamilton

Roger D. Garon(1) (2)
Chairman of the Board
Multivet Ltd., a Veterinary
Products Company

Barry H. Gibson
Owner
Aroma-Tec Industries Inc.

Management

Branco Jankovic(1) (2)
Consultant

Robert Lacroix(1) (3)
Senior Vice-President
CTI Capital Inc.

Pierre Laurin
Chairman of the Board,
President and Chief Executive Ofﬁcer,
ProMetic Life Sciences Inc.

Benjamin Wygodny(3)
President
Angus Partnership Inc.

(1) Audit Committee
(2) Compensation Committee
(3) Corporate Governance Committee

Pierre Laurin
Chairman of the Board,
President and
Chief Executive Ofﬁcer
ProMetic Life Sciences Inc.

Lucie Morin
Vice-President, Human Resources
ProMetic Life Sciences Inc.

Stéphane Archambault
Vice-President, Finance
ProMetic Life Sciences Inc.

Mark Bandrauk
General Counsel and
Corporate Secretary
ProMetic Life Sciences Inc.

Steven J. Burton
Chief Executive Ofﬁcer
ProMetic BioSciences Ltd

Christopher Bryant
Executive Vice-President
and COO
ProMetic BioTherapeutics, Inc.

Christopher L. Penney
Vice-President & Chief
Scientiﬁc Ofﬁcer, Therapeutics
ProMetic BioSciences Inc.

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

External Scientiﬁc Collaborators

In 2006, the Company relied on a network of
well-recognized scientists with expertise in different
areas such as biotechnology, bioprocessing and
biopharmaceuticals:

Enabling Technology

John C. Curling, PhD
Independent Consultant

Barry L. Haymore, MD, PhD
Consultant,
Microbe Inotech Laboratories Inc

David J. Stewart, PhD
Director of Meetings and Courses,
Cold Spring Harbor Laboratory

Therapeutics

Julie Beaudet, MD
Oncologist, Maisonneuve-Rosemont Hospital

Martine Garreau, MD, M.Sc.
Managing Director, GMG Life Sciences

Jean Marsac, MD, PhD
President, H2I SA

Denis Claude Roy, MD
Hematologist, Associate Professor of
Medicine at the University of Montréal
Director, Cellular Therapy Laboratory
at Maisonneuve-Rosemont Hospital

Pathogen Removal and
Diagnostic Technologies Inc.

Ruben G. Carbonell
Director of the William R. Kenan
Junior Institute for Engineering
Technology and Science,
North Carolina University

David J. Hammond, PhD
Executive Director, R&D,
Plasma Derivatives, American Red Cross

Robert G. Rohwer, PhD
Director, Molecular Neurovirology
Laboratory, VA Maryland
Health Care System International
authority in the ﬁeld of the TSE

ProMetic BioTherapeutics, Inc.

Ruben G. Carbonell, PhD
Director of the William R. Kenan
Junior Institute for Engineering
Technology and Science,
North Carolina University

John C. Curling, PhD
Independent Consultant

David J. Hammond, PhD
Executive Director, R&D,
Plasma Derivatives,
American Red Cross

PROMETIC LIFE SCIENCES INC.
2006 ANNUAL REPORT

Additional Information

Prometic Life Sciences Inc.

Annual Information Form

The 2006 Annual Information Form of
ProMetic Life Sciences Inc. is available
upon request from the Company’s head ofﬁce.

ProMetic BioSciences Inc.
Laval, Quebec
R&D Group – Therapeutics
Tel.:
Email: info@prometic.com

(450) 781-1394

ProMetic BioSciences Ltd
Isle of Man, British Isles
Scale-up and manufacturing
Tel.:
44 1624 823 519
Email: Info@prometic.com

Cambridge, UK
R&D Group – Enabling technology
44 1223 420 300
Tel.:

ProMetic BioSciences, USA. Inc.
Tel.:
(973) 812-9880
Email: sales@prometic.com

ProMetic BioTherapeutics, Inc.
Gaithersburgh, Maryland
Plasma Protein Therapeutics
Tel.:

(301) 212-2864

We would like to thank all the
ProMetic employees who contributed
to this annual report.

Head Ofﬁce
8168 Montview Road,
Mont-Royal, Quebec H4P 2L7
Canada
Tel.:
Fax:
Email: info@prometic.com
www.prometic.com

(514) 341-2115
(514) 341-6227

On peut se procurer la version française du présent
rapport annuel en s’adressant au Service des
communications de ProMetic Sciences de la Vie inc.:
8168, chemin Montview
Mont-Royal, Québec H4P 2L7
Canada

Vous le trouverez aussi sur notre site Internet
à l’adresse : www.prometic.com

Auditors

Raymond Chabot Grant Thornton
600 de La Gauchetière Street West, Suite 1900
Montreal, Quebec H3B 4L8
Canada

Transfer Agent and Registrar

Computershare Trust Company of Canada
1500 University Street, Suite 700
Montreal, Quebec H3A 3S8
Canada

Listings

Toronto Stock Exchange (PLI)
Outstanding shares as at December 31, 2006:
234,670,814

Annual Meeting Of Shareholders

Wednesday, May 2, 2007 at 10:30 a.m. (EST)
Montreal Museum of Fine Arts
1379, Sherbrooke Street West,
Montreal, Quebec H3G 2T9
Canada

between perception

1
4
10
14
18
22
25
37
41

The Annual Shareholders Meeting of ProMetic will be held on 2 May 2007,
at 10:30 a.m. at the Museum of Fine Arts, Montreal, Quebec.

e
m
s
i
h
p
a
r
G
|

s
n
o

i
t

a
c
i
n
u
m
m
o
C
|

.
c
n

3
G
C

prometic.com

Closing the gap

PROMETIC LIFE SCIENCES INC. 2006 ANNUAL REPORT