CONTACT LORUS THERAPEUTICS INC. CANADIAN MEDIA: Corporate Communications MANSFIELD COMMUNICATIONS INC. Grace Tse Hugh Mansfield Tel: (416) 798-1200, ext.380 Tel: (416) 599-0024 Email: ir@lorusthera.com Email: hmansfield@mcipr.com TSE: LOR OTC BB: LORFF LORUS THERAPEUTICS REPORTS SECOND QUARTER RESULTS TORONTO, CANADA - JANUARY 17, 2003 - Lorus Therapeutics Inc. ("Lorus") today announced second quarter 2003 financial results for the quarter ended November 30, 2002. All figures, unless otherwise specified, are in Canadian dollars. SEPTEMBER 1, 2002 TO DATE HIGHLIGHTS o A steering group has been formed with representatives from the U.S. National Cancer Institute (NCI) to determine the cancer indications and protocols of multiple Phase II clinical trials for GTI-2040. The trials will be conducted by the NCI in conjunction with Lorus. o Allowed patent protection by the United States Patent and Trademark Office (USPTO) to protect the company's lead anticancer drug Virulizin(R) as it relates to immunodulating compositions, pharmaceutical agents containing these compositions, and the use of the compositions and agents for treatment purposes. o Received patent on NC381, the lead anticancer drug of a subsidiary of Lorus, NuChem Pharmaceuticals Inc. from USPTO. The patent protects NC381 as an effective therapeutic agent for the treatment of lung, pancreatic and skin cancers, and as an inhibitor of prostate tumor growth. o Mayne Pharma exercised its option to secure distribution rights for Virulizin(R) in Argentina for the treatment of malignant melanoma. This increases the scope of Lorus' relationship with Mayne Pharma and the potential of revenues from the emerging markets in South America. o Renewed emergency drug program to supply Virulizin(R) for the treatment of advanced pancreatic cancer around the world which not only provides a valuable service to cancer patients not otherwise eligible for ongoing clinical trials but also augments the Virulizin(R) database with additional safety information. o Appointed Mr. Graham Strachan as the chair of the board of directors and Mr. J. Kevin Buchi as a director of the board. "In this quarter, we continued to build shareholder value at Lorus by obtaining patent protection of our inventions and through the advancement of our clinical programs," said Dr. Jim A. Wright, chief executive officer, Lorus. "The agreement to carry out multiple clinical trials with GTI-2040 in partnership with the U.S. NCI further validates our lead antisense drug and provides financial support to assess the efficacy of this novel drug in a variety of cancer indications. " For the second quarter ended November 30, 2002, Lorus incurred a loss of $3,969,000 ($0.03 per share) compared to a loss of $3,683,000 ($0.03 per share) for the second quarter last year. On a year-to-date basis, the loss was $8,045,000 ($0.06) for the first six months of fiscal 2003 compared to $6,739,000 ($0.05) for the comparable period last year. The increase in net loss relates primarily to greater costs for the Virulizin(R) Phase III clinical trial and the antisense clinical development programs as planned and lower interest income, partially offset by lower administrative costs from cost conservation efforts and lower goodwill amortization due to a recent accounting pronouncement effective June 1, 2002. On a comparable basis, the loss for the three months and six months ended November 30, 2001 would have been $3,321,000 ($0.02 per share) and $6,012,000 ($0.04 per share) respectively after adjustment to remove amortization of goodwill in those periods. Research and development expenses for the second quarter of fiscal 2003 increased to $3,323,000 compared to $2,093,000 for the same quarter last year. For the six months ended November 30, 2002 research and development expenses increased to $6,370,000 compared to $4,235,000 for the same period last year. Costs increased in fiscal 2003 due primarily to higher clinical trial costs for Virulizin(R) for the ongoing pivotal Phase III trial for the treatment of advanced pancreatic cancer. The antisense clinical program which includes the GTI-2040 Phase II trial in patients with renal cell carcinoma and the GTI-2501 Phase I trial in patients with solid tumors or lymphoma also contributed to the increase in the current periods. General and administrative expenses for the second quarter of fiscal 2003 decreased to $796,000 compared to $1,583,000 for the same quarter last year. For the six months ended November 30, 2002 general and administrative expenses decreased to $2,100,000 compared to $2,645,000 for the same period last year. The decrease in both periods was due mainly to lower use of external advisory services. For the six months ended November 30, 2002 this decrease was partially offset by higher employee related costs that occurred in the first quarter. Depreciation and amortization for the second quarter of fiscal 2003 decreased to $164,000 from $567,000 for the same quarter last year. For the six months ended November 30, 2002 depreciation and amortization expenses decreased to $259,000 from $1,022,000 during the same period last year. In both periods, the decrease was due mainly to the adoption of the new CICA accounting guideline for goodwill and other intangible assets whereby the Company ceased amortizing goodwill on June 1, 2002. Interest income for the second quarter of fiscal 2003 decreased to $314,000 from $560,000 for the same quarter last year. For the six months ended November 30, 2002 interest income decreased to $684,000 from $1,163,000 for the same period last year. The decrease was due primarily to lower cash and short-term investments balances in fiscal 2003 compared to the comparable periods in fiscal 2002. As at November 30, 2002, Lorus had cash and cash equivalents and short-term investments of $31.7 million compared to $37.8 million at May 31, 2002. CONSOLIDATED STATEMENTS OF LOSS (UNAUDITED) FOR THE QUARTERS ENDED NOVEMBER 30, 2002 AND 2001