----

|  Canada(State or Other Jurisdiction ofIncorporation or Organization                                           | 20-0442384(I.R.S. EmployerIdentification No.) |
|--------------------------------------------------------------------------------------------------------------------|-----------------------------------------------|
|                                                                                                               |                                          |
| PO Box 136285, 68 TW Alexander DriveResearch Triangle Park, North Carolina(Address of Principal Executive Offices) | 27709(Zip Code)                               |

| Large Accelerated Filer |  ̈ |                                        | Accelerated Filer         |  ̈ |
|-------------------------|--------|---------------------------------------------|---------------------------|--------|
| Non-Accelerated Filer   |  ̈ | (Do not check if smaller reporting company) | Smaller reporting company | x      |

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|                                                                                                                                               | Page     |
|----------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                                                                                                                               |     |
| PART I: FINANCIAL INFORMATION                                                                                                                      |   3 |
|                                                                                                                                               |     |
| Item 1.  Financial Statements (unaudited)                                                                                                | 3        |
|                                                                                                                                               |     |
| Consolidated Balance Sheets – March 31, 2011 and December 31, 2010                                                                           | 3        |
|                                                                                                                                               |     |
| Unaudited Interim -Consolidated Statements of Operations - Three Months Ended March 31, 2011 and 2010                                              | 4        |
|                                                                                                                                               |     |
| Unaudited Interim  Consolidated Statements of Cash Flows - Three Months Ended March 31, 2011 and 2010                                    | 5        |
|                                                                                                                                               |     |
| Unaudited Interim  Consolidated Statements of Stockholders' Equity – For the Period Ended September 3, 1996 to March 31, 2011 | 6        |
|                                                                                                                                               |     |
| Notes to Unaudited Consolidated Financial Statements                                                                                               | 9        |
|                                                                                                                                               |     |
| Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations                                           | 14       |
|                                                                                                                                               |     |
| Item 3.  Quantitative and Qualitative Disclosures about Market Risk                                                                      | 20       |
|                                                                                                                                               |     |
| Item 4.  Controls and Procedures                                                                                                         | 20       |
|                                                                                                                                               |     |
| PART II: OTHER INFORMATION                                                                                                                         | 22       |
|                                                                                                                                               |     |
| Item 1. Legal Proceedings                                                                                                                          | 22       |
|                                                                                                                                               |     |
| Item 1A.  Risk Factors                                                                                                                   | 22       |
|                                                                                                                                               |     |
| Item 2. Unregistered Sales of Equity Securities                                                                                                    | 23       |
|                                                                                                                                               |     |
| Item 3. Defaults Upon Senior Securities                                                                                                            | 23       |
|                                                                                                                                               |     |
| Item 4. Removed and Reserved                                                                                                                       | 23       |
|                                                                                                                                               |     |
| Item 5. Other Information                                                                                                                          | 23       |
|                                                                                                                                               |     |
| Item 6.  Exhibits                                                                                                                        | 24       |
|                                                                                                                                               |     |
| Signatures                                                                                                                                         | 25       |

----

|                                                                                                          |   | March 31,2011 |     |   | December 31,2010 |   |
|---------------------------------------------------------------------------------------------------------------|--------|--------------------|----------|--------|-----------------------|--------|
|                                                                                                          |   |               |     |   |                  |   |
| Assets                                                                                                        |   |               |     |   |                  |   |
|                                                                                                          |   |               |     |   |                  |   |
| Current assets:                                                                                               |   |               |     |   |                  |   |
| Cash and cash equivalents                                                                                     |   | $                  | 5,023    |   |                  | $      | 5,947 |   |
| Subscription receivable (see Note 5)                                                                          |   |               | 2,548    |   |                  |   | - |   |
| Prepaid expense                                                                                               |   |               | 29       |   |                  |   | 38 |   |
| Other current Assets                                                                                          |   |               | 37       |   |                  |   | 8 |   |
| Total assets                                                                                                  |   | $                  | 7,637    |   |                  | $      | 5,993 |   |
|                                                                                                          |   |               |     |   |                  |   |   |   |
| Liabilities and Stockholders' Equity                                                                          |   |               |     |   |                  |   |   |   |
|                                                                                                          |   |               |     |   |                  |   |   |   |
| Current liabilities:                                                                                          |   |               |     |   |                  |   |   |   |
| Accounts payable                                                                                              |   | $                  | 442      |   |                  | $      | 272 |   |
| Accrued liabilities                                                                                           |   |               | 114      |   |                  |   | 195 |   |
| Derivative warrant liability                                                                                  |   |               | 7,366    |   |                  |   | 10,450 |   |
|                                                                                                          |   |               |     |   |                  |   |   |   |
| Total liabilities                                                                                             |   |               | 7,922    |   |                  |   | 10,917 |   |
|                                                                                                          |   |               |     |   |                  |   |   |   |
| Commitments (see Note 8)                                                                                      |   |               |     |   |                  |   |   |   |
|                                                                                                          |   |               |     |   |                  |   |   |   |
| Stockholders' equity:                                                                                         |   |               |     |   |                  |   |   |   |
| Common stock, no par value; unlimited shares authorized; 452,852 Shares issued and outstanding (2010-368,293) |   |               | 65,952   |   |                  |   | 64,929 |   |
| Additional paid-in capital                                                                                    |   |               | 37,916   |   |                  |   | 37,717 |   |
| Deficit accumulated during development stage                                                                  |   |               | (105,396 | )      |                  |   | (108,813 | ) |
| Accumulated other comprehensive income                                                                        |   |               | 1,243    |   |                  |   | 1,243 |   |
| Total stockholders’ equity                                                                              |   |               | (285     | )      |                  |   | (4,924 | ) |
| Total liabilities and stockholders’ equity                                                              |   | $                  | 7,637    |   |                  | $      | 5,993 |   |

----

|                                                                     |   | Three Months Ended |    |   | Cumulative FromSeptember 3, 1996 to |   |
|--------------------------------------------------------------------------|--------|------------------------------|---------|--------|---------------------------------------------------------|--------|
|                                                                     |   | March 31,2011           |    |   | March 31,2010                                      |   |   | March 31, 2011 |   |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |
| Revenue                                                                  |   | $                            | -       |   |                                                    | $      | - |   |   | $ | - |   |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Operating expenses:                                                      |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Research and development                                                 |   |                         | 315     |   |                                                    |   | 163 |   |   |   | 65,913 |   |
| Gain on Deferred lease inducements                                       |   |                         | -       |   |                                                    |   | - |   |   |   | (497 | ) |
| Impairment of Capital Assets                                             |   |                         | -       |   |                                                    |   | - |   |   |   | 386 |   |
| Acquired in-process research and development                             |   |                         | -       |   |                                                    |   | - |   |   |   | 13,094 |   |
| General and administrative                                               |   |                         | 706     |   |                                                    |   | 203 |   |   |   | 29,311 |   |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Loss from operations                                                     |   |                         | (1,021  | )      |                                                    |   | (366 | ) |   |   | (108,207 | ) |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Other income (expense):                                                  |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Settlement of Cadherin Biomedical Inc. litigation                        |   |                         | -       |   |                                                    |   | - |   |   |   | (1,283 | ) |
| Interest expense                                                         |   |                         | -       |   |                                                    |   | - |   |   |   | (19 | ) |
| Unrealized/realized gain on derivatives                                  |   |                         | 5,680   |   |                                                    |   | - |   |   |   | 2,429 |   |
| Other Income                                                             |   |                         | -       |   |                                                    |   | - |   |   |   | 254 |   |
| Interest income and other                                                |   |                         | 10      |   |                                                    |   | - |   |   |   | 2,839 |   |
| Total other income, net                                                  |   |                         | 5,690   |   |                                                    |   | - |   |   |   | 4,220 |   |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Net income (loss) and comprehensive income (loss)                        |   | $                            | 4,669   |   |                                                    | $      | (366 | ) |   | $ | (103,987 | ) |
|                                                                     |   |                         |    |   |                                                    |   |   |   |   |   |   |   |
| Basic and diluted net income (loss) per common share                     |   | $                            | 0.01    |   |                                                    | $      | (0.00 | ) |   |   |   |   |
| Weighted-average number of common shares outstanding, basic              |   |                         | 370,173 |   |                                                    |   | 128,227 |   |   |   |   |   |
| Weighted-average number of common shares outstanding,  diluted |   |                         | 450,033 |   |                                                    |   | 128.227 |   |   |   |   |   |

----

|                                                                        |   | Three Months Ended |   |   | CumulativeFromSeptember 3,1996 to |   |
|-----------------------------------------------------------------------------|--------|------------------------------|--------|--------|---------------------------------------------|--------|
|                                                                        |   | March 31,2011           |   |   | March 31,2010                          |   |   | March 31,2011 |   |
|                                                                        |   |                         |   |   |                                        |   |   |   |   |
| Cash flows from (used in):                                                  |   |                         |   |   |                                        |   |   |   |   |
| Operating activities:                                                       |   |                         |   |   |                                        |   |   |   |   |
| Net income (loss)                                                           |   | $                            | 4,669  |   |                                        | $      | (366 | ) |   | $ | (103,987 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Depreciation and amortization                                               |   |                         | -      |   |                                        |   | - |   |   |   | 1,404 |   |
| Non-cash Cadherin Biomedical Inc. litigation expense                        |   |                         | -      |   |                                        |   | - |   |   |   | 1,187 |   |
| Unrealized/realized gain on derivative warrants                             |   |                         | (5,680 | )      |                                        |   | - |   |   |   | (2,429 | ) |
| Unrealized foreign exchange loss                                            |   |                         | 10     |   |                                        |   | - |   |   |   | 55 |   |
| Amortization of deferred lease inducements                                  |   |                         | -      |   |                                        |   | - |   |   |   | (412 | ) |
| Loss on impairment of capital assets                                        |   |                         | -      |   |                                        |   | - |   |   |   | 386 |   |
| Non-cash severance expense                                                  |   |                         | -      |   |                                        |   | - |   |   |   | 168 |   |
| Stock options issued to consultants                                         |   |                         | -      |   |                                        |   | - |   |   |   | 775 |   |
| Stock options issued to employees                                           |   |                         | -      |   |                                        |   | - |   |   |   | 9,964 |   |
| Acquired in-process research and development                                |   |                         | -      |   |                                        |   | - |   |   |   | 13,094 |   |
| Changes in operating assets and liabilities                                 |   |                         | (47    | )      |                                        |   | 29 |   |   |   | (70 | ) |
| Net cash used in operating activities                                       |   |                         | (1,048 | )      |                                        |   | (337 | ) |   |   | (79,865 | ) |
|                                                                        |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Investing activities:                                                       |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Purchase of capital assets                                                  |   |                         | -      |   |                                        |   | - |   |   |   | (1,440 | ) |
| Disposal of capital assets                                                  |   |                         | -      |   |                                        |   | - |   |   |   | 115 |   |
| Release of restricted cash                                                  |   |                         | -      |   |                                        |   | - |   |   |   | 190 |   |
| Restricted cash                                                             |   |                         | -      |   |                                        |   | - |   |   |   | (209 | ) |
| Proceeds from sale of assets                                                |   |                         | -      |   |                                        |   | - |   |   |   | 24 |   |
| Purchase of short-term investments                                          |   |                         | -      |   |                                        |   | - |   |   |   | (22,148 | ) |
| Redemption of short-term investments                                        |   |                         | -      |   |                                        |   | - |   |   |   | 22,791 |   |
| Investment in Cadherin Biomedical Inc.                                      |   |                         | -      |   |                                        |   | - |   |   |   | (166 | ) |
| Acquired intellectual property rights                                       |   |                         | -      |   |                                        |   | - |   |   |   | (640 | ) |
| Net cash used in investing activities                                       |   |                         | -      |   |                                        |   | - |   |   |   | (1,483 | ) |
|                                                                        |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Financing activities:                                                       |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Conversion of long-term debt to equity                                      |   |                         | -      |   |                                        |   | - |   |   |   | 68 |   |
| Long-term debt repayments                                                   |   |                         | -      |   |                                        |   | - |   |   |   | (65 | ) |
| Capital lease repayments                                                    |   |                         | -      |   |                                        |   | - |   |   |   | (8 | ) |
| Issuance of common stock, net of issue costs                                |   |                         | -      |   |                                        |   | - |   |   |   | 83,877 |   |
| Registration expense                                                        |   |                         | -      |   |                                        |   | - |   |   |   | (465 | ) |
| Financing expenses                                                          |   |                         | -      |   |                                        |   | - |   |   |   | (544 | ) |
| Proceeds from convertible note                                              |   |                         | -      |   |                                        |   | - |   |   |   | 3,017 |   |
| Other liability repayments                                                  |   |                         | -      |   |                                        |   | - |   |   |   | (87 | ) |
| Security deposits                                                           |   |                         | -      |   |                                        |   | - |   |   |   | 35 |   |
| Proceeds from exercise of stock options                                     |   |                         | -      |   |                                        |   | - |   |   |   | 51 |   |
| Net cash provided in financing activities                                   |   |                         | -      |   |                                        |   | - |   |   |   | 85,879 |   |
|                                                                        |   |                         |   |   |                                        |   |   |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                |   |                         | 124    |   |                                        |   | - |   |   |   | 492 |   |
| Net change in cash and cash equivalents                                     |   |                         | (924   | )      |                                        |   | (337 | ) |   |   | - |   |
| Cash and cash equivalents - Beginning of period                             |   |                         | 5,947  |   |                                        |   | 685 |   |   |   | - |   |
| Cash and cash equivalents - End of period                                   |   | $                            | 5,023  |   |                                        | $      | 348 |   |   | $ | 5,023 |   |

----

|                                                            |   | Common Stock |   |   | Non-redeemablePreferred Stock |   |   | AdditionalPaid-in  |   |   | AccumulatedOtherComprehensive |   |   | Deficit AccumulatedDuring Development |   |   | Total Shareholders’ |   |
|----------------------------------------------------------------------|--------|-------------------|--------|--------|------------------------------------|--------|--------|--------------------|--------|--------|-------------------------------|--------|--------|-------------------------------------------------|--------|--------|--------------------------------|--------|
|                                                                 |   | Number            |   |   | Amount                             |   |   | of Subsidiary |   |   | Capital                       |   |   | Income                                          |   |   | Stage                          |   |   | Equity |   |
| Balance at June 30, 1996                                             |   |              | -      |   |                               | $      | -      |               |   | $      | -                             |   |   | $                                               | -      |   |                           | $      | - |   |   | $ | - |   |   | $ | - |   |
| Issuance of common stock                                             |   |              | 1,600  |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (37 | ) |   |   | (37 | ) |
| Balance at June 30, 1997                                             |   |              | 1,600  |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (37 | ) |   |   | (37 | ) |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (398 | ) |   |   | (398 | ) |
| Balance at June 30, 1998                                             |   |              | 1,600  |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (435 | ) |   |   | (435 | ) |
| Exchange of Adherex Inc. shares for Adherex Technologies Inc. shares |   |              | (1,600 | )      |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |
| Issuance of common stock                                             |   |              | 4,311  |   |                               |   | 1,615  |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | 1,615 |   |
| Cumulative translation adjustment                                    |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 20 |   |   |   | - |   |   |   | 20 |   |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (958 | ) |   |   | (958 | ) |
| Balance at June 30, 1999                                             |   |              | 4,311  |   |                               |   | 1,615  |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 20 |   |   |   | (1,393 | ) |   |   | 242 |   |
| Issuance of common stock                                             |   |              | 283    |   |                               |   | 793    |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | 793 |   |
| Issuance of equity rights                                            |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | 171    |   |                           |   | - |   |   |   | - |   |   |   | 171 |   |
| Issuance of special warrants                                         |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | 255    |   |                           |   | - |   |   |   | - |   |   |   | 255 |   |
| Settlement of advances:                                              |   |              |   |   |                               |   |   |               |   |   |                          |   |   |                                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of common stock                                             |   |              | 280    |   |                               |   | 175    |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | 175 |   |
| Cancellation of common stock                                         |   |              | (120   | )      |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |
| Cumulative translation adjustment                                    |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 16 |   |   |   | - |   |   |   | 16 |   |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (1,605 | ) |   |   | (1,605 | ) |
| Balance at June 30, 2000                                             |   |              | 4,754  |   |                               |   | 2,583  |               |   |   | -                             |   |   |                                            | 426    |   |                           |   | 36 |   |   |   | (2,998 | ) |   |   | 47 |   |
| Issuance of common stock:                                            |   |              |   |   |                               |   |   |               |   |   |                          |   |   |                                            |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Initial Public Offering (“IPO”)                          |   |              | 1,333  |   |                               |   | 5,727  |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (38 | ) |   |   | 5,689 |   |
| Other                                                                |   |              | 88     |   |                               |   | 341    |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | - |   |   |   | 341 |   |
| Issuance of special warrants                                         |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | 1,722  |   |                           |   | - |   |   |   | - |   |   |   | 1,722 |   |
| Conversion of special warrants                                       |   |              | 547    |   |                               |   | 1,977  |               |   |   | -                             |   |   |                                            | (1,977 | )      |                           |   | - |   |   |   | - |   |   |   | - |   |
| Issuance of Series A special warrants                                |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | 4,335  |   |                           |   | - |   |   |   | - |   |   |   | 4,335 |   |
| Conversion of Series A special warrants                              |   |              | 1,248  |   |                               |   | 4,335  |               |   |   | -                             |   |   |                                            | (4,335 | )      |                           |   | - |   |   |   | - |   |   |   | - |   |
| Conversion of equity rights                                          |   |              | 62     |   |                               |   | 171    |               |   |   | -                             |   |   |                                            | (171   | )      |                           |   | - |   |   |   | - |   |   |   | - |   |
| Cumulative translation adjustment                                    |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 182 |   |   |   | - |   |   |   | 182 |   |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | - |   |   |   | (2,524 | ) |   |   | (2,524 | ) |
| Balance at June 30, 2001                                             |   |              | 8,032  |   |                               |   | 15,134 |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 218 |   |   |   | (5,560 | ) |   |   | 9,792 |   |
| Cumulative translation adjustment                                    |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 11 |   |   |   | - |   |   |   | 11 |   |
| Net loss                                                             |   |              | -      |   |                               |   | -      |               |   |   | -                             |   |   |                                            | -      |   |                           |   |   |   |   |   | (3,732 | ) |   |   | (3,732 | ) |
| Balance at June 30, 2002                                             |   |              | 8,032  |   |                               |   | 15,134 |               |   |   | -                             |   |   |                                            | -      |   |                           |   | 229 |   |   |   | (9,292 | ) |   |   | 6,071 |   |

----

|                                           |   | Common Stock |   |   | Non-redeemablePreferred Stock |   |   | AdditionalPaid-in |   |   |  AccumulatedOtherComprehensive |   |   | DeficitAccumulatedDuringDevelopment |   |   | TotalShareholders’ |   |
|-----------------------------------------------------|--------|--------------|--------|--------|-------------------------------|--------|--------|-------------------|--------|--------|-------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------|--------|
|                                                |   | Number       |   |   | Amount                        |   |   | of Subsidiary     |   |   | Capital                             |   |   | Income                              |   |   | Stage                    |   |   | Equity |   |
| Balance at June 30, 2002                            |   |         | 8,032  |   |                          |   | 15,134 |              |   |   | -                                   |   |   |                                | -      |   |                     |   | 229 |   |   |   | (9,292 | ) |   |   | 6,071 |   |
| Common stock issued for Oxiquant acquisition        |   |         | 8,032  |   |                          |   | 11,077 |              |   |   | -                                   |   |   |                                | 543    |   |                     |   | - |   |   |   | - |   |   |   | 11,620 |   |
| Exercise of stock options                           |   |         | 5      |   |                          |   | 4      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | 4 |   |
| Distribution to shareholders                        |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (158 | ) |   |   | (158 | ) |
| Stated capital reduction                            |   |         | -      |   |                          |   | (9,489 | )                 |   |   | -                                   |   |   |                                | 9,489  |   |                     |   | - |   |   |   | - |   |   |   | - |   |
| Stock options issued to consultants                 |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 4      |   |                     |   | - |   |   |   | - |   |   |   | 4 |   |
| Equity component of June convertible notes          |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 1,058  |   |                     |   | - |   |   |   | - |   |   |   | 1,058 |   |
| Financing warrants                                  |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 53     |   |                     |   | - |   |   |   | - |   |   |   | 53 |   |
| Cumulative translation adjustment                   |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | (159 | ) |   |   | - |   |   |   | (159 | ) |
| Net loss                                            |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (17,795 | ) |   |   | (17,795 | ) |
| Balance at June 30, 2003                            |   |         | 16,069 |   |                          |   | 16,726 |              |   |   | -                                   |   |   |                                | 11,147 |   |                     |   | 70 |   |   |   | (27,245 | ) |   |   | 698 |   |
| Stock options issued to consultants                 |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 148    |   |                     |   | - |   |   |   | - |   |   |   | 148 |   |
| Repricing of warrants related to financing          |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 18     |   |                     |   | - |   |   |   | - |   |   |   | 18 |   |
| Equity component of December convertible notes      |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 1,983  |   |                     |   | - |   |   |   | - |   |   |   | 1,983 |   |
| Financing warrants                                  |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 54     |   |                     |   | - |   |   |   | - |   |   |   | 54 |   |
| Conversion of June convertible notes                |   |         | 1,728  |   |                          |   | 1,216  |              |   |   | -                                   |   |   |                                | (93    | )      |                     |   | - |   |   |   | - |   |   |   | 1,123 |   |
| Conversion of December convertible notes            |   |         | 1,085  |   |                          |   | 569    |              |   |   | -                                   |   |   |                                | (398   | )      |                     |   | - |   |   |   | - |   |   |   | 171 |   |
| Non-redeemable preferred stock                      |   |         | -      |   |                          |   | -      |              |   |   | 1,045                               |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | 1,045 |   |
| December private placement                          |   |         | 11,522 |   |                          |   | 8,053  |              |   |   | -                                   |   |   |                                | 5,777  |   |                     |   | - |   |   |   | - |   |   |   | 13,830 |   |
| May private placement                               |   |         | 4,669  |   |                          |   | 6,356  |              |   |   | -                                   |   |   |                                | 2,118  |   |                     |   | - |   |   |   | - |   |   |   | 8,474 |   |
| Exercise of stock options                           |   |         | 18     |   |                          |   | 23     |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | 23 |   |
| Amalgamation of 2037357 Ontario Inc.                |   |         | 800    |   |                          |   | 660    |              |   |   | (1,045                              | )      |   |                                | 363    |   |                     |   | - |   |   |   | - |   |   |   | (22 | ) |
| Cumulative translation adjustment                   |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | (219 | ) |   |   | - |   |   |   | (219 | ) |
| Net loss                                            |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (6,872 | ) |   |   | (6,872 | ) |
| Balance at June 30, 2004                            |   |         | 35,891 |   |                          |   | 33,603 |              |   |   | -                                   |   |   |                                | 21,117 |   |                     |   | (149 | ) |   |   | (34,117 | ) |   |   | 20,454 |   |
| Stock options issued to consultants                 |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 39     |   |                     |   | - |   |   |   | - |   |   |   | 39 |   |
| Stock options issued to employees                   |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 604    |   |                     |   | - |   |   |   | - |   |   |   | 604 |   |
| Cost related to SEC registration                    |   |         | -      |   |                          |   | (493   | )                 |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | (493 | ) |
| Acquisition of Cadherin Biomedical Inc.             |   |         | 644    |   |                          |   | 1,252  |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | 1,252 |   |
| Cumulative translation adjustment                   |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | 1,392 |   |   |   | - |   |   |   | 1,392 |   |
| Net loss – six months ended December 31, 2004 |   |         | -      |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (6,594 | ) |   |   | (6,594 | ) |
| Balance at December 31, 2004                        |   |         | 36,535 |   |                          |   | 34,362 |              |   |   | -                                   |   |   |                                | 21,760 |   |                     |   | 1,243 |   |   |   | (40,711 | ) |   |   | 16,654 |   |

----

|                                |   | Common Stock |    |   | Non-redeemablePreferred Stock |   |   | AdditionalPaid-in |   |   |  AccumulatedOtherComprehensive |   |   | DeficitAccumulatedDuringDevelopment |   |   | TotalShareholders’ |   |
|------------------------------------------|--------|--------------|---------|--------|-------------------------------|--------|--------|-------------------|--------|--------|-------------------------------------|--------|--------|-------------------------------------|--------|--------|--------------------------|--------|
|                                     |   | Number       |    |   | Amount                        |   |   | of Subsidiary     |   |   | Capital                             |   |   | Income                              |   |   | Stage                    |   |   | Equity |   |
| Balance at December 31, 2004             |   |         | 36,535  |   |                          |   | 34,362 |              |   |   | -                                   |   |   |                                | 21,760 |   |                     |   | 1,243 |   |   |   | (40,711 | ) |   |   | 16,654 |   |
| Financing costs                          |   |         | -       |   |                          |   | (141   | )                 |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | (141 | ) |
| Exercise of stock options                |   |         | 15      |   |                          |   | 25     |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | 25 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 276    |   |                     |   | - |   |   |   | - |   |   |   | 276 |   |
| July private placement                   |   |         | 6,079   |   |                          |   | 7,060  |              |   |   | -                                   |   |   |                                | 1,074  |   |                     |   | - |   |   |   | - |   |   |   | 8,134 |   |
| Net loss                                 |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (13,871 | ) |   |   | (13,871 | ) |
| Balance at December 31, 2005             |   |         | 42,629  |   |                          |   | 41,306 |              |   |   | -                                   |   |   |                                | 23,110 |   |                     |   | 1,243 |   |   |   | (54,582 | ) |   |   | 11,077 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 100    |   |                     |   | - |   |   |   | - |   |   |   | 100 |   |
| Stock options issued to employees        |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 491    |   |                     |   | - |   |   |   | - |   |   |   | 491 |   |
| May private placement                    |   |         | 7,753   |   |                          |   | 5,218  |              |   |   | -                                   |   |   |                                | 822    |   |                     |   | - |   |   |   | - |   |   |   | 6,040 |   |
| Net loss                                 |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (16,440 | ) |   |   | (16,440 | ) |
| Balance at December 31, 2006             |   |         | 50,382  |   |                          |   | 46,524 |              |   |   | -                                   |   |   |                                | 24,523 |   |                     |   | 1,243 |   |   |   | (71,022 | ) |   |   | 1,268 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 59     |   |                     |   | - |   |   |   | - |   |   |   | 59 |   |
| Stock options issued to employees        |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 2,263  |   |                     |   | - |   |   |   | - |   |   |   | 2,263 |   |
| February financing                       |   |         | 75,759  |   |                          |   | 17,842 |              |   |   | -                                   |   |   |                                | 5,379  |   |                     |   | - |   |   |   | - |   |   |   | 23,221 |   |
| Exercise of warrants                     |   |         | 2,086   |   |                          |   | 563    |              |   |   | -                                   |   |   |                                | 131    |   |                     |   | - |   |   |   | - |   |   |   | 694 |   |
| Net loss                                 |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (13,357 | ) |   |   | (13,357 | ) |
| Balance at December 31, 2007             |   |         | 128,227 |   |                          |   | 64,929 |              |   |   | -                                   |   |   |                                | 32,355 |   |                     |   | 1,243 |   |   |   | (84,379 | ) |   |   | 14,148 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 88     |   |                     |   | - |   |   |   | - |   |   |   | 88 |   |
| Stock options issued to employees        |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 2,417  |   |                     |   | - |   |   |   | - |   |   |   | 2,417 |   |
| Net loss                                 |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (13,600 | ) |   |   | (13,600 | ) |
| Balance at December 31, 2008             |   |         | 128,227 |   |                          |   | 64,929 |              |   |   | -                                   |   |   |                                | 34,860 |   |                     |   | 1,243 |   |   |   | (97,979 | ) |   |   | 3,053 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 10     |   |                     |   | - |   |   |   | - |   |   |   | 10 |   |
| Stock options issued to employees        |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 355    |   |                     |   | - |   |   |   | - |   |   |   | 355 |   |
| Net loss for quarter                     |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (3,012 | ) |   |   | (3,012 | ) |
| Balance at December 31, 2009             |   |         | 128,227 |   |                          |   | 64,929 |              |   |   | -                                   |   |   |                                | 35,225 |   |                     |   | 1,243 |   |   |   | (100,991 | ) |   |   | 407 |   |
| Stock options issued to consultants      |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 53     |   |                     |   | - |   |   |   | - |   |   |   | 53 |   |
| Stock options issued to employees        |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | 2,439  |   |                     |   | - |   |   |   | - |   |   |   | 2,439 |   |
| April financing                          |   |         | 240,066 |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | - |   |   |   | - |   |
| Net loss                                 |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | (7,823 | ) |   |   | (7,823 | ) |
| Balance at December 31, 2010             |   |         | 368,293 |   |                          |   | 64,929 |              |   |   | -                                   |   |   |                                | 37,717 |   |                     |   | 1,243 |   |   |   | (108,813 | ) |   |   | (4,924 | ) |
| Rights offering, net of issuance of $300 |   |         | 84,559  |   |                          |   | 1,023  |              |   |   | -                                   |   |   |                                | 199    |   |                     |   | - |   |   |   | (1,252 | ) |   |   | (30 | ) |
| Net income for quarter                   |   |         | -       |   |                          |   | -      |              |   |   | -                                   |   |   |                                | -      |   |                     |   | - |   |   |   | 4,669 |   |   |   | 4,669 |   |
| Balance at March 31, 2011                |   |         | 452,852 |   |                          | $      | 65,952 |              |   | $      | -                                   |   |   | $                                   | 37,916 |   |                     | $      | 1,243 |   |   | $ | (105,396 | ) |   | $ | (285 | ) |

----

| 1. | Going Concern |
|----|---------------|

| 2. | Significant Accounting Policies |
|----|---------------------------------|

----

| 3. | Recent Accounting Pronouncements |
|----|----------------------------------|

| 4. | Derivative Instruments |
|----|------------------------|

|   | · | 240,066 warrants exercisable at CAD$0.08 that expire on April 30, 2015; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | 84,559 warrants exercisable at CAD$0.08 that expire on March 29, 2016. |
|--------|--------|------------------------------------------------------------------------|

----

| 5. | Stockholders' Equity |
|----|----------------------|

| Warrant Description |   | NumberOutstanding atMarch 312010 |    |   | Exercise PriceIn CAD Dollars |   | Expiration Date |   |
|--------------------------|--------|--------------------------------------------|---------|--------|---------------------------------------------|--------|----------------------|--------|
| Investor warrants (1)    |   |                                       | 240,066 |   |                                        | $      | 0.08                 |   | April 30, 2015 |   |
| Investor warrants (2)    |   |                                       | 84,559  |   |                                        | $      | 0.08                 |   | March 29, 2016 |   |
|                     |   |                                       | 324,625 |   |                                        |   |                 |   |   |   |

----

| 7. | Fair Value Measurements |
|----|-------------------------|

|                         |   | Fair Value Measurement at March 31, 2011 |   |   |         |   |
|------------------------------|--------|------------------------------------------------------------------------|--------|--------|--------------|--------|
|                         |   | Quoted Price                                                      |   |   | Significant  |   |   |   |   |   |   |   |
|                         |   | in Active Markets                                            |   |   | Other        |   |   | Significant |   |   |   |   |
|                         |   | for Identical                                                     |   |   | Observable   |   |   | Unobservable |   |   |   |   |
|                         |   | Instruments                                                            |   |   | Inputs       |   |   | Inputs |   |   |   |   |
|                         |   | Level 1                                                           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Assets                       |   |                                                                   |   |   |         |   |   |   |   |   |   |   |
| Money market investment      |   | $                                                                      | -      |   |         | $      | 4,669 |   |   | $ | - |   |   | $ | 4,669 |   |
|                         |   |                                                                   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                  |   |                                                                   |   |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Derivative warrant liability |   |                                                                   | -      |   |         |   | 7,366 |   |   |   | - |   |   |   | 7,366 |   |

----

|                                       |   |                            |   |   | 1-3    |   |   |   |   |
|--------------------------------------------|--------|---------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                       |   | Less than 1 year |   |   | years  |   |   | Total  |   |
| Property Lease (1)                         |   |                            | 2      |   |   |   | -      |   |   |   | 2 |   |
| OCT Clinical Service Agreement(2)          |   |                            | 114    |   |   |   | 435    |   |   |   | 549 |   |
| Database Integration Service Agreement (3) |   |                            | 130    |   |   |   | 146    |   |   |   | 276 |   |
| Drug purchase commitments (4)              |   |                            | 60     |   |   |   | 25     |   |   |   | 85 |   |
| Total                                      |   | $                               | 306    |   |   | $      | 606    |   |   | $ | 912 |   |

| (1) | Our office lease in Chapel Hill, NC expired January 15, 2011. In February 2011, we entered into a lease for a new office facility in Research Triangle Park, North Carolina.  Amounts shown assume the maximum amounts due under the leases. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Under the service agreement with OCT Group LLC entered in August 2010, we are required to make several payments over the course of our Phase II clinical trial in Russia.  The payments will be made upon the fulfillment of several milestones during the planned clinical trial including: regulatory approval of trial, enrollment of patients and the completion of therapy of patients.  The Company amended the agreement in April 2011 for the addition of additional sites for OCT to service during the Phase II clinical trial. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Under the service agreement with Database Integrations entered in December 2010, we are required to make several payments over the course of our Phase II clinical trial in Russia.  The payments will be made upon the fulfillment of several milestones during the planned clinical trial including: EDC live, time and completion of enrollment. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Commitments to our third party manufacturing vendors that supply drug substance primarily for our clinical studies. |
|-----|---------------------------------------------------------------------------------------------------------------------|

----

----

----

| In thousands of U.S. Dollars         |   | Three MonthsEndedMarch 31, 2011 |   |   | %      |   |   | Three MonthsEndedMarch 31, 2010 |   |   | %      |   |   | Change |   |
|----------------------------------------------------------|--------|------------------------------------------------|--------|--------|--------|--------|--------|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                     |   |                                           |   |   |   |   |   |                                           |   |   |   |   |   |   |   |
| Revenue                                                  |   | $                                              | -      |   |   |   |   |                                           | $      | -      |   |   |   |   |   | $ | - |   |
| Operating expenses:                                      |   |                                           |   |   |   |   |   |                                           |   |   |   |   |   |   |   |   |   |   |
| Research and development                                 |   |                                           | 315    |   |   |   | 31     | %                                              |   |   | 163    |   |   |   | 45     | % |   |   | 152 |   |
| General and administration                               |   |                                           | 706    |   |   |   | 69     | %                                              |   |   | 203    |   |   |   | 55     | % |   |   | 503 |   |
| Total operating expenses                                 |   |                                           | 1,021  |   |   |   | 100    | %                                              |   |   | 366    |   |   |   | 100    | % |   |   | 655 |   |
|                                                     |   |                                           |   |   |   |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                                     |   |                                           | (1,021 | )      |   |   |   |                                           |   |   | (366   | )      |   |   |   |   |   |   | (655 | ) |
|                                                     |   |                                           |   |   |   |   |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized/realized gain on derivative warrants          |   |                                           | 5,680  |   |   |   |   |                                           |   |   | -      |   |   |   |   |   |   |   | 5,680 |   |
| Interest income                                          |   |                                           | 10     |   |   |   |   |                                           |   |   | -      |   |   |   |   |   |   |   | 10 |   |
| Net income/(loss) and total comprehensive income/ (loss) |   | $                                              | 4,669  |   |   |   |   |                                           |   | $      | (366   | )      |   |   |   |   |   | $ | 5,035 |   |

|   Period |   | Net Loss forthe Period |   |   | Basic and DilutedNet Loss perCommon Share |   |
|--------------------|--------|---------------------------------------|--------|--------|--------------------------------------------------------------------|--------|
| March 31, 2009     |   | $                                     | (2,246 | )      |                                                               | $      | (0.02 | ) |
| June 30, 2009      |   | $                                     | (761   | )      |                                                               | $      | (0.01 | ) |
| September 30, 2009 |   | $                                     | (35    | )      |                                                               | $      | (0.00 | ) |
| December 31, 2009  |   | $                                     | 30     |   |                                                               | $      | 0.00 |   |
| March 31, 2010     |   | $                                     | (366   | )      |                                                               | $      | (0.00 | ) |
| June 30, 2010      |   | $                                     | (2,569 | )      |                                                               | $      | (0.01 | ) |
| September 30, 2010 |   | $                                     | 1,694  |   |                                                               | $      | 0.01 |   |
| December 31, 2010  |   | $                                     | (6,582 | )      |                                                               | $      | (0.03 | ) |
| March 31, 2011     |   | $                                     | 4,669  |   |                                                               | $      | 0.01 |   |

----

|                                                                                                |   | March 31, |     |   | December 31, |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------|----------|--------|-------------------|--------|
| In thousands of U.S. dollars                                                    |   | 2011           |     |   | 2010              |   |
| Selected Asset and Liability Data:                                                                  |   |           |     |   |              |   |
| Cash and cash equivalents                                                                           |   | $              | 5,023    |   |              | $      | 5,947 |   |
| Subscription receivable                                                                             |   |           | 2,548    |   |              |   | - |   |
| Other current assets                                                                                |   |           | 66       |   |              |   | 46 |   |
| Current liabilities                                                                                 |   |           | 556      |   |              |   | 467 |   |
| Derivative warrant liability                                                                        |   |           | 7,365    |   |              |   | 10,450 |   |
| Long term liabilities                                                                               |   |           |     |   |              |   |   |   |
| Working capital [Current Assets - Current Liabilities excluding the derivative warrant liabilities] |   |           | 7,081    |   |              |   | 5,526 |   |
|                                                                                                |   |           |     |   |              |   |   |   |
| Selected Stockholders’ Equity Data:                                                           |   |           |     |   |              |   |   |   |
| Common stock                                                                                        |   | $              | 65,952   |   |              | $      | 64,929 |   |
| Deficit accumulated during the development stage                                                    |   |           | (105,396 | )      |              |   | (108,813 | ) |
| Total stockholders’ equity                                                                    |   |           | (285     | )      |              |   | (4,924 | ) |

----

|          |   | March 31,2011 |    |
|---------------|--------|--------------------|---------|
| Common shares |   |               | 452,852 |   |
| Warrants      |   |               | 324,625 |   |
| Stock options |   |               | 83,180  |   |
| Total         |   |               | 860,657 |   |

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|                                       |   | Less than 1 year |   |   | 1-3years |   |   | Total  |   |
|--------------------------------------------|--------|-----------------------|--------|--------|----------|--------|--------|--------|--------|
| Property Lease (1)                         |   |                  | 2      |   |     |   | -      |   |   |   | 2 |   |
| OCT Clinical Service Agreement(2)          |   |                  | 114    |   |     |   | 435    |   |   |   | 549 |   |
| Database Integration Service Agreement (3) |   |                  | 130    |   |     |   | 146    |   |   |   | 276 |   |
| Drug purchase commitments (4)              |   |                  | 60     |   |     |   | 25     |   |   |   | 85 |   |
| Total                                      |   | $                     | 306    |   |     | $      | 606    |   |   | $ | 912 |   |

| (1) | Our office lease in Chapel Hill, NC expired January 15, 2011. In February 2011, we entered into a lease for a new office facility in Research Triangle Park, North Carolina.  Amounts shown assume the maximum amounts due under the leases. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Under the service agreement with OCT Group LLC entered in August 2010, we are required to make several payments over the course of our planned Phase II clinical trial in Russia.  The payments will be made upon the fulfillment of several milestones during the planned clinical trial including: regulatory approval of trial, enrollment of patients and the completion of therapy of patients. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Under the service agreement with Database Integrations entered in December 2010, we are required to make several payments over the course of our planned Phase II clinical trial in Russia.  The payments will be made upon the fulfillment of several milestones during the planned clinical trial including: EDC live, time and completion of enrollment. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Commitments to our third party manufacturing vendors that supply drug substance primarily for our clinical studies. |
|-----|---------------------------------------------------------------------------------------------------------------------|

|   |   |
|--------|--------|

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| (a) | Evaluation of Disclosure Controls and Procedures. |
|-----|---------------------------------------------------|

----

| (b) | Changes in Internal Control over Financial Reporting |
|-----|------------------------------------------------------|

----

----

----

| Exhibit |   |                                                                                                                                                                                                                    |
|---------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| No.     |   | Description                                                                                                                                                                                                             |
|    |   |                                                                                                                                                                                                                    |
| 3.1     |   | Articles of Amalgamation dated June 29, 2004 (included as Exhibit 1.7 to the Form 20-F Registration Statement, No. 001-32295, of Adherex, filed September 17, 2004 and incorporated herein by reference).               |
|    |   |                                                                                                                                                                                                                    |
| 3.2     |   | By-law No. 2 of the Company, as amended on November 2, 2004 (included as Exhibit 1.9 to the Form 20-F/A Registration Statement, No. 001-32295 of Adherex, filed November 5, 2004 and incorporated herein by reference). |
|    |   |                                                                                                                                                                                                               |
| 4.1     |   | Form of Subscription Rights Certificate (March 2011 Rights Offering) (Exhibit 4.5 to Form S-1/A Registration Statement (No. 333-170570) of Adherex, filed February 9, 2011).                                            |
|    |   |                                                                                                                                                                                                                    |
| 4.2     |   | Form of Warrant (March 2011 Rights Offering)( Exhibit 4.6 to Form S-1/A Registration Statement (No. 333-170570) of Adherex, filed February 9, 2011).                                                                    |
|    |   |                                                                                                                                                                                                                    |
| 10.1    |   | Amended Master Service Agreement with OCT Group LLC dated April 2, 2011 (filed herewith).                                                                                                                               |
|    |   |                                                                                                                                                                                                                    |
| 99.1    |   | Press Release for Quarter Ended March 31, 2011 (filed herewith).                                                                                                                                                        |
|    |   |                                                                                                                                                                                                                    |
| 31.1    |   | Certification of Chief Executive Officer of the Company in accordance with Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).                                                                              |
|    |   |                                                                                                                                                                                                                    |
| 31.2    |   | Certification of Chief Financial Officer of the Company in accordance with Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).                                                                              |
|    |   |                                                                                                                                                                                                                    |
| 32.1    |   | Certification of Chief Executive Officer and Chief Financial Officer of the Company in accordance with Section 906 of the Sarbanes Oxley Act of 2002 (filed herewith).                                                  |

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|               |   | Adherex Technologies Inc. |
|--------------------|--------|---------------------------|
|               |   |                      |
| Date: May 13, 2011 |   | By:                       |   | /s/ Rostislav Raykov |
|               |   |                      |   | Rostislav Raykov |
|               |   |                      |   | Chief Executive Officer |
|               |   |                      |   | (principal executive officer) |
|               |   |                      |
| Date: May 13, 2011 |   | By:                       |   | /s/ Robert Andrade |
|               |   |                      |   |   |
|               |   |                      |   | Robert Andrade |
|               |   |                      |   | Chief Financial Officer |
|               |   |                      |   | (principal financial and chief accounting officer) |

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