•

completion to final data of its ongoing Phase 2 clinical trials of OGX-011;

•

completion of its Phase 1 clinical trial of OGX-427;

•

reaching an agreement with the U.S. Food and Drug Administration (FDA) on the design of an additional Phase 3 registration trial of OGX-011 in patients with hormone refractory prostate cancer via the Special Protocol Assessment (SPA) process; and

•

completion of pharmacology and formulation evaluations of CSP-9222.

•

On August 21, 2008, Sonus Pharmaceuticals, Inc. and OncoGenex Technologies Inc. completed a transaction, whereby Sonus acquired all of the outstanding securities and convertible debentures of OncoGenex Technologies. Sonus changed its name to OncoGenex Pharmaceuticals, Inc. and was listed on the Nasdaq Capital Market under the ticker symbol OGXI. Concurrent with the completion of the transaction there was a workforce reduction of 49% of the employees of the two companies in order to effectively utilize cash assets while maintaining the resources to advance our priority clinical programs. The Company has 24 full-time employees after giving effect to the above workforce reduction.

•

OncoGenex and Isis amended the development agreement for OGX-011, providing OncoGenex with increased economic interest in OGX-011 and increased flexibility to further develop this product candidate. In addition, we believe this new arrangement facilitates future partnering discussions since potential development and commercialization partners need only deal with one party.

•

OncoGenex reached an agreement with the FDA on the design of a Phase 3 registration trial of OGX-011, its lead product candidate targeting hormone refractory prostate cancer, via the SPA process. In the letter responding to the OncoGenex submission, the FDA stated that it agreed with the design and planned analysis proposed by OncoGenex, and that the study design adequately addresses the objectives necessary to support a regulatory submission.

•

Sonus signed an exclusive in-licensing agreement with Bayer HealthCare LLC for development of a family of compounds known as caspase activators presently in preclinical research. As the caspase family of proteases plays essential roles in apoptosis, the caspase activators offer the potential for the development of therapies in the treatment of various cancers.

•

OncoGenex received Fast Track designation from the FDA for development of OGX-011 in combination with docetaxel for progressive metastatic prostate cancer. Fast Track designation was granted on the basis that OGX-011 may provide a significant improvement in the safety or effectiveness of the treatment for a serious or life-threatening disease. Based on this designation, the FDA will take actions as appropriate to expedite the development and review of OGX-011 for approval. These actions include scheduled meetings to obtain FDA input into development plans, the option of submitting a New Drug Application in sections rather than all components simultaneously, and the option of requesting evaluation of studies using surrogate endpoints.

•

On October 7, 2008 OncoGenex and the FDA concluded a meeting whereby the FDA agreed that "durable pain palliation is an acceptable and desirable study endpoint" to support a product marketing approval for OGX-011 as a treatment for hormone refractory prostate cancer (HRPC). In addition, the FDA provided guidance on the submitted protocol including recommendations on study endpoints, the appropriate patient population, entry criteria and study conduct. OncoGenex plans to revise and submit the protocol to FDA for a Special Protocol Assessment prior to initiating the registration trial.

•

OncoGenex completed patient enrollment in its Phase 1 clinical trial evaluating the safety of SN2310 in patients with advanced cancer.

Three Months Ended

Nine Months Ended

September 30,   

September 30,   

2008

2007

2008

2007

Operating expenses

Research and development

$1,639

$1,094

$3,621

$3,075

General and administrative

1,024

609

2,243

2,709

Total operating expenses

2,663

1,703

5,864

5,784

Other income (expense)

297

(27)

88

44

Loss for the period before taxes

(2,366)

(1,730)

(5,776)

(5,740)

Income tax expense (recovery)

(2,515)

200

(2,100)

573

Operating income (loss) before extraordinary gain

149

(1,930)

(3,676)

(6,313)

Extraordinary gain

4,428

-

4,428

-

Net income (loss)

4,577

(1,930)

752

(6,313)

Redeemable convertible preferred share accretion

417

735

1,973

2,156

Income (loss) attributable to common shareholders

$4,160

$(2,665)

$(1,221)

$(8,469)

September 30,

December 31,

2008

2007

(unaudited)

Assets:

Cash, cash equivalents and short term investments

$ 17,178

$ 5,131

Amounts and investment tax credit receivable

1,375

1,813

Prepaid and other current assets

1,129

295

Property, equipment and other assets

566

111

Total assets

$ 20,248

$ 7,350

Liabilities and stockholders' equity:

Accounts payable and accrued expenses

$ 2,700

$ 1,048

Other current liabilities

905

4,665

Long term liabilities

1,163

2,487

Redeemable convertible preferred shares

-

37,373

Stockholders' equity (deficiency)

15,480

(38,223)

Total liabilities and stockholders' equity (deficiency)

$ 20,248

$ 7,350