In the first quarter, OncoGenex and development partner, Teva Pharmaceutical Industries Ltd., announced an amendment to the custirsen collaboration agreement to expand the clinical trial program to include the initiation of a new Phase 3 study, known as the AFFINITY trial, in the second-half of 2012. The study will evaluate a survival benefit for custirsen in combination with Jevtana^® (cabazitaxel) as second-line chemotherapy in patients with castrate-resistant prostate cancer (CRPC).

The SYNERGY Phase 3 study, evaluating a survival benefit for custirsen plus first-line chemotherapy in patients with CRPC, remains on schedule and patient accrual is expected to be completed later this year.

A phase 3 clinical trial to evaluate a survival benefit for custirsen in combination with chemotherapy in patients with non-small cell lung cancer is expected to initiate in the second half of 2012.

Preliminary clinical data were presented for OGX-427 for the treatment of prostate and bladder cancer at the American Society of Clinical Oncology (ASCO) Genitourinary Cancers Symposium in February 2012:

In chemotherapy-naive patients with metastatic CRPC, preliminary study results showed a higher number of patients without disease progression at 12 weeks, and greater declines in prostate-specific antigen (PSA) and circulating tumor cells (CTC) with OGX-427 plus prednisone treatment compared to prednisone alone.

Additional preliminary results for this ongoing study will be presented at the upcoming ASCO Annual Meeting in June 2012.

In patients with superficial bladder cancer, preliminary results of an ongoing investigator-sponsored Phase 1 study demonstrated a trend towards decreased levels of Hsp27 and increased tumor cell death rates after intravesical treatment with OGX-427. Of the 15 patients treated with OGX-427, 33% had complete responses with no pathologic evidence of disease observed in post-surgical tissue following 4 doses of OGX-427.

Enrollment is currently underway for a randomized Phase 2 clinical trial of OGX-427 in combination with gemcitabine/cisplatin in patients with metastatic bladder cancer. In addition, a randomized Phase 2 clinical trial evaluating OGX-427 in combination with Zytiga^® (abiraterone) in patients with CRPC, supported in part by grant funding, will be initiated later this year.

The company completed a financing that provided net cash of $53.8 million, which added cash resources to fund operations into 2015. Proceeds from the recent stock offering will be used to extend the cash runway and expand the OGX-427 clinical development program.

Revenue for the first quarter of 2012 increased to $1.3 million, compared with $1.2 million for the first quarter of 2011. The increase in 2012 as compared to 2011 was due to higher revenue earned through our strategic collaboration with Teva, resulting from clinical development activities associated with the AFFINITY trial which we plan to initiate later this year.

As of March 31, 2012, $17.3 million of the $30 million advanced reimbursement received from Teva in December 2009 was included on our Balance Sheet as Current Deferred Collaboration Revenue. This advanced reimbursement balance will continue to be reduced as we incur direct and indirect custirsen development costs. As a consequence of initiating the AFFINITY trial later this year, we currently expect that all remaining Current Deferred Collaboration Revenue will be recognized as Collaboration Revenue by the fourth quarter of 2012. Once the remaining amount of the advanced reimbursement from Teva has been drawn to zero, all of our costs associated with the clinical programs under our collaboration will be reimbursed by Teva quarterly.

Total operating expenses for the first quarter of 2012 increased to $6.8 million, compared with $6.4 million for the first quarter of 2011. The increase in 2012 as compared to 2011 was due primarily to higher employee expenses, including stock-based compensation expenses, offset by lower costs associated with the development of OGX-427 and the custirsen phase 3 clinical trials.

Net loss for the first quarter of 2012 was $6.9 million, or $0.67 per diluted common share, compared to $3.0 million, or $0.31 per diluted common share, for the first quarter of 2011. The increase in net loss was primarily due to a $1.4 million non-cash loss on revaluation of our warrant liability recorded in the first quarter of 2012 as compared to a $2.1 million non-cash gain on revaluation of our warrant liability in the first quarter of 2011.

We had $111.3 million in cash, cash equivalents and short-term investments as of March 31, 2012, compared to $64.9 million as of December 31, 2011.

Revised 2012 cash guidance:

Net cash requirements are expected to be in the range of $45 million to $50 million which is higher than our previous guidance of $40 million to $45 million, and reflects additional investment in OGX-427 development.

Year-end cash, cash equivalents, investments, and receivables from Teva to be in the range of $68 million to $73 million, which is higher than our previous guidance of $20 million to $25 million and reflects the new proceeds from our March offering and expected additional OGX-427 development costs.

Based on our current expectations, we believe our capital resources as of March 31, 2012 will be sufficient to fund our currently planned operations into 2015. As at May 1, 2012, we had 14,539,869 shares outstanding.

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