##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 Or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 033-80623
 OncoGenex Pharmaceuticals, Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    95-4343413
(I.R.S. Employer
Identification No.)
 1522 217 th Place SE, Suite 100, Bothell, Washington 98021
 (425) 686-1500
 Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Exchange on Which RegisteredCommon Stock, par value $0.001 per share
    
    The NASDAQ Capital Market
 None
 Yes o No þ
 Yes o No þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Yes o No þ
  DOCUMENTS INCORPORATED BY REFERENCE




---



##### 



OncoGenex Pharmaceuticals, Inc.
 Table of Contents
 PART IITEM 1. BUSINESS
    
    
    3Overview of Our Business
    
    
    3Our Product Candidates
    
    
    5Overview of Market and Treatment
    
    
    9Our Strategy
    
    
    10Summary of OGX-011 Product Registration Strategy
    
    
    10Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trials
    
    
    11Second Generation Antisense Technology
    
    
    13License and Collaboration Agreements
    
    
    13Royalty Obligations to Third Parties
    
    
    18Government
RegulationsDrug Approval Process
    
    
    19Contract Research Agreements
    
    
    20Research and Development Expenditures
    
    
    20Manufacturing
    
    
    20Intellectual
Property
    
    
    21Competition
    
    
    22Trademarks
    
    
    23Employees
    
    
    23Company Information
    
    
    23Available Information
    
    
    23ITEM 1A. RISK FACTORS
    
    
    24ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    43ITEM 2. PROPERTIES
    
    
    43ITEM 3. LEGAL PROCEEDINGS
    
    
    43ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    43PART IIITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
    
    
    44ITEM 6. SELECTED FINANCIAL DATA
    
    
    46ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    
    
    47ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    60ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
    
    
    61ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
    
    
    90ITEM 9A. CONTROLS AND PROCEDURES
    
    
    90ITEM 9B. OTHER INFORMATION
    
    
    91PART IIIITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    92ITEM 11. EXECUTIVE COMPENSATION
    
    
    92ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
    
    
    92ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
    
    
    93ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    93PART IVITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
    
    
    93Exhibit 3.4Exhibit 10.36Exhibit 21.1Exhibit 23.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




---



##### Table of Contents



PART I
 References in this Form 10-K to OncoGenex Pharmaceuticals, OncoGenex, the Company, we, us
or our refer to OncoGenex Pharmaceuticals, Inc. and its wholly owned subsidiaries. The
information in this Form 10-K contains certain forward-looking statements, including statements
related to clinical trials, regulatory approvals, markets for the Companys products, new product
development, capital requirements and trends in its business that involve risks and uncertainties.
The Companys actual results may differ materially from the results discussed in the
forward-looking statements. Factors that might cause such a difference include those discussed in
Business, Risk Factors and Managements Discussion and Analysis of Financial Condition and
Results of Operations as well as those discussed elsewhere in this Form 10-K .
 
 ITEM 1. BUSINESS
 
 Overview of Our Business
        3




---



##### Table of Contents



Recent Corporate History
       4




---



##### Table of Contents



Our Product Candidates
  OGX-011  Executive Summary
 Refer to Summary of OGX-011 Product Registration Strategy and Summary of Preliminary Results of
OGX-011 Phase 2 Clinical Trials for further details.
      
    
    longer survival duration when adding OGX-011 to first-line docetaxel compared to
first-line docetaxel alone in patients with CRPC within a randomized phase 2 trial;
 
    
    longer survival duration when adding OGX-011 to either mitoxantrone or docetaxel as
second-line chemotherapy compared to survival duration observed in two published studies
of CRPC patients receiving second-line chemotherapy (One is a study in patients with
better prognostic risk factors who received docetaxel as second-line chemotherapy which
was conducted at the British Columbia Cancer Agency (BCCA) and presented at the American
Society of Clinical Oncology (ASCO) Genitourinary (GU) Conference in 2008 (BCCA
Study) and the second study is the follow-up evaluation of patients on the TAX 327 Study
who later received second-line chemotherapy. The TAX 327 Study (The TAX 327 Study) was
the key registration study that showed a survival benefit for docetaxel over mitoxantrone
for first-line chemotherapy treatment of patients with metastatic CRPC);
  5




---



##### Table of Contents




    
    increased frequency and duration of pain palliation when adding OGX-011 to either
mitoxantrone or docetaxel as second-line chemotherapy compared to the frequency and
duration of pain palliation observed in the TAX 327 Study for first-line chemotherapy
alone in patients with CRPC; and
 
    
    longer survival duration when adding OGX-011 to gemcitabine and a platinum-containing
chemotherapy compared to the survival duration reported in prior published results from
randomized clinical trials in NSCLC patients receiving gemcitabine and a
platinum-containing chemotherapy.
      6




---



##### Table of Contents



3
  OGX-427
      7




---



##### Table of Contents



SN2310
   OGX-225
    CSP-9222
   8




---



##### Table of Contents



Cancer Indication and
    
    
    
    
    
    Recent and Expected Near Term DataProduct Candidate
    
    Study
    
    Treatment Combination(1)
    
    Development Phase/Status
    
    ReleasesOGX-011 phase 3(2)
    
    Castrate Resistant Prostate
Cancer  Survival Endpoint
(OGX-011-11)
    
    First-line docetaxel with and without OGX-011
    
            Not yet initiated; Protocol
being developed
    
            Initiation of trial conditional upon
partnering or financingCastrate Resistant Prostate
Cancer  Survival Endpoint
(OGX-011-08)
    
    Docetaxel as second-line chemotherapy with
and without OGX-011
    
            Not yet initiated; SPA
approved by the FDA
    
            Initiation of trial conditional upon
partnering or financingCastrate Resistant Prostate
Cancer  Durable Pain Palliation
Endpoint
(OGX-011-10)
    
    Docetaxel as second-line chemotherapy with
and without OGX-011
    
            Not yet initiated; SPA
pending
    
            Initiation of trial conditional upon
partnering or financingOGX-011 phase 2
    
    Castrate Resistant Prostate Cancer
(OGX-011-03)
    
    First-line docetaxel with and without OGX-011
    
            Phase 2 ongoing  accrual
and treatment complete
    
            Interim survival data presented Dec./08
        Data to be presented Q2/2009 at 2009 ASCO
Annual MeetingCastrate Resistant Prostate Cancer
(OGX-011-07)
    
    OGX-011 with second-line chemotherapy (docetaxel or mitoxantrone)
    
            Phase 2 ongoing  accrual
and treatment complete
    
            Interim data presented at ASCO GU
Symposium 2008 Manuscript in preparationCastrate Resistant Prostate Cancer
(OGX-011-07A)
    
    OGX-011 with docetaxel as second-line chemotherapy
    
            Phase 2 ongoing  accrual
and treatment complete
    
            Manuscript in preparationAdvanced Non-Small Cell Lung Cancer
(OGX-011-05)
    
    OGX-011 with first-line chemotherapy
(gemcitabine and cisplatin or gemcitabine
and carboplatin)
    
            Phase 2 completed
    
            2-year survival data presented Feb 2009.
        Manuscript in preparationLocalized Prostate Cancer
(OGX-011-04)
    
    OGX-011 with hormone ablation therapy
    
            Phase 2 completed
    
            Results presented at ASCO GU 2008Advanced Breast Cancer
(OGX-011-06)
    
    OGX-011 with docetaxel as second-line
chemotherapy
    
            Phase 2 completed
    
            Data published in Clinical.Cancer.Research
2009OGX-011 phase 1
    
    Localized Prostate Cancer
(OGX-011-01)
    
    OGX-011 with hormone ablation therapy
    
            Phase 1 completed
    
            Data published in Journal of National
Cancer Institutute 2005Solid Tumors
(prostate, breast, NSCL, ovarian,
renal, bladder, peritoneum)
(OGX-011-02)
    
    OGX-011 with docetaxel
    
            Phase 1 completed
    
            Data published Clinical Cancer Research
2008OGX-427
    
    Solid Tumors
    
    OGX-427 with and without chemotherapy
    
            Phase 1 ongoing- accrual and
treatment complete for
evaluation of OGX-427 as
monotherapy
    
            Monotherapy evaluation complete  maximum
tolerated dose not determined at highest
dose level.
        2009  Determine maximum tolerated dose
with chemotherapy        Data to be presented Q2/2009 at 2009 ASCO
Annual MeetingBladder Cancer
    
    OGX-427 as monotherapy
    
            Not yet initiated; Initial
patient enrolment expected in
Q2/2009
    
            NoneSN2310
    
    Solid Tumors
    
    SN2310 administered to heavily pre-treated
patients with advanced cancer
    
            Phase 1 completed
    
            Enrolment and treatment completed -
maximum tolerated dose determinedOGX-225
    
    Solid Tumors
    
    OGX-225 with and without chemotherapy
    
            Pre-clinical
proof-of-concept studies
completed
    
            NoneCSP-9222
    
    Solid Tumors
    
    To be determined
    
            Formulation to be
determined
    
            None
 (1)
    
    In all of OncoGenexs prostate cancer clinical trials and in clinical practice for prostate
cancer, docetaxel is administered in combination with prednisone.(2)
    
    We have designed three possible phase 3 clinical trials to evaluate the clinical benefit of
OGX-011 in CRPC. OncoGenex believes that two of the three studies will be required for product
marketing approval. Currently, OncoGenex intends that the first-line docetaxel with and without
OGX-011 will be combined with one of the second-line clinical trials. Determination of which of the
two second-line studies will be conducted is dependent upon further discussions with the FDA. 
 Overview of Market and Treatment
    9




---



##### Table of Contents



Our Strategy
 
    
    Focus on gaining market approval for OGX-011 by conducting registration trials that
demonstrate efficacy and safety. OncoGenex believes that its pre-clinical and clinical
data support the use of OGX-011 to improve the activity of chemotherapy in both CRPC and
NSCLC indications. OncoGenex will initially focus its development efforts on the CRPC
indication.
 
    
    Conclude a partnership or licensing agreement with a third party pharmaceutical or
biotechnology company that has sufficient resources to fund, or co-fund with OncoGenex,
the continued development of OGX-011.
 
    
    Advance OncoGenex product pipeline by conducting clinical trials across multiple
cancer indications for OGX-427. Consistent with the strategy OncoGenex is following for
OGX-011, OncoGenex intends to conduct parallel clinical trials to evaluate OGX-427 in
several cancer indications and treatment combinations to accelerate its assessment of this
product candidate for further development.
 
    
    Focus on developing and commercializing new cancer therapies to inhibit treatment
resistance in cancer patients. OncoGenex plans to leverage its expertise in discovery and
development to bring new products to market as fast as possible. OncoGenex intends to
maintain and develop its relationships with the Prostate Centre, and develop relationships
with other research institutions in order to identify and source additional product
candidates.
 
    
    Optimize the development of OncoGenex product candidates through use of outsourcing
and internal expertise. In order to increase efficiency and lower its overhead OncoGenex
outsources and plans to continue to outsource pre-clinical and manufacturing activities.
OncoGenex has chosen to establish critical product development functions in-house
including clinical trial management and regulatory affairs.
 
 Summary of OGX-011 Product Registration Strategy
   
    
    Evaluating a survival benefit for OGX-011 in combination with first-line docetaxel
treatment in approximately 800 men with CRPC;
 
    
    Evaluating a survival benefit for OGX-011 in combination with docetaxel as second-line
chemotherapy in approximately 800 men with CRPC; and
 
    
    Evaluating a durable pain palliation benefit for OGX-011 in combination with docetaxel
as second-line chemotherapy in approximately 300 men with CRPC.
   10




---



##### Table of Contents



Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trials
  Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trial in First-Line Castrate Resistant
Prostate Cancer
   
    
    longer time on treatment and a greater median number of treatment cycles administered
in the docetaxel plus OGX-011 arm (median of 8 cycles) compared to the docetaxel only arm
(median of 6 cycles);
 
    
    Fewer patients treated with docetaxel plus OGX-011 discontinued study treatment for
death or reasons associated with disease progression compared to the docetaxel alone arm
(8 versus 17 patients, respectively);
 
    
    Most common adverse events related to OGX-011 were mild and included increased
frequencies of neuropathy, rigors/chills, fever, diarrhea and rash. The only increase in
moderate adverse events was an increase in lymphopenia. Lymphopenia is a decrease in
lymphocytes, a type of white blood cell involved in the bodys defence against infections.
To date this has been a laboratory finding with no clinical evidence of a problem with
infections. Thus, overall OGX-011 has a well tolerated safety profile, especially
considering the longer time on treatment;
 
    
    higher frequency of patients with measurable disease control (defined as objective
responses plus stable measurable disease) at 92% in the docetaxel plus OGX-011 arm
compared to 74% in the docetaxel only arm;
 
    
    lower frequency of progressive disease as evidenced by PSA or measurable disease at 0%
and 4% in the docetaxel plus OGX-011 arm compared to 10% and 22% in the docetaxel only
arm, respectively; and
 
    
    significant reduction in mean serum clusterin levels in the OGX-011 arm versus an
increase in mean serum clusterin levels in the control arm.
   11




---



##### Table of Contents



Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trial in Second-Line Castrate Resistant
Prostate Cancer
   
    
    survival duration is longer than the survival duration observed in the follow-up
evaluation of patients on the TAX 327 Study who later received second-line chemotherapy
and were available for long-term follow up. In the follow-up evaluation of TAX 327, 237
patients received either docetaxel or mitoxantrone as second-line chemotherapy. The median
(50%) survival duration from the start of second-line chemotherapy was 10 months for both
groups of patients (patients receiving mitoxantrone as second-line chemotherapy after
receiving docetaxel as first-line chemotherapy or patients receiving docetaxel as
second-line chemotherapy after receiving mitoxantrone as first-line chemotherapy). As of
January 14, 2009, the estimated median survival duration for the OGX-011 plus mitoxantrone
arm was 11.4 months based on a median follow-up of 26 months.
For the OGX-011 plus docetaxel retreatment arm, the median survival is mature and is
estimated at 15.8 months for the 20 randomized patients, based
on a median follow-up of 26 months, and 13.0 months for the
combined 45 patients (20 randomized patients plus 25 patients on the amended protocol), based on a median follow-up of 18 months. The median survival is
mature for the 20 randomized patients whereas additional survival updates are needed
before a mature median survival for combined 45 patients can be reported;
 
    
    longer time on chemotherapy than expected for second-line treatment with generally 1 to 2 more
chemotherapy cycles administered compared to other published studies;
 
    
    examples of reversing chemoresistance by adding OGX-011 during docetaxel retreatment as second-line
chemotherapy based on prostate specific antigen levels;
 
    
    the survival data from OncoGenex clinical trial also compares favorably to the median survival duration
of 9.6 months for patients who received second-line docetaxel after first-line docetaxel in a retrospective
BCCA Study. The patients in the BCCA Study had a better prognosis than the patients in OncoGenex clinical
trial;
 
    
    preliminary analyses have shown that treatment with OGX-011 in combination with chemotherapy significantly
lowers serum clusterin levels and that average serum clusterin levels were predictive of survival with low
serum clusterin levels correlating to longer survival. Patients with low average serum clusterin levels
during treatment had a median survival of approximately 15.2 months compared to approximately 8.5 months for
patients with high average serum clusterin levels during treatment; and
 
    
    durable pain responses defined as a duration of 12 weeks or greater were observed in 44% of evaluable
patients in the docetaxel retreatment plus OGX-011 arm and in 38% of patients in the mitoxantrone arm. These
durable pain responses have occurred in a higher than expected frequency since patients receiving
second-line chemotherapy have more advanced disease and may have more profound, or resistant, prostate
cancer-related pain. These data compare favorably to data from the TAX 327 Study that reported pain response
outcomes for patients receiving first-line chemotherapy. In the TAX 327 Study when patients were treated with
first-line docetaxel, not all of the 35% of patients reported as having a pain response had a pain response
duration of three months since the median duration was 3.5 months with a lower limit of 2.4 months. Thus,
this rate of durable pain response is lower than the 44% of patients treated with second-line docetaxel plus
OGX-011. Similarly, in the TAX 327 Study when patients were treated with first-line mitoxantrone, 22% of
patients had a durable pain response of three months or longer compared to the 38% of patients treated with
second-line mitoxantrone plus OGX-011.
 Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trial in Non-Small Cell Lung Cancer
  
    
    the median overall survival was 14.1 months and 54% of patients survived at least 1
year;
 
    
    in January 2009, we reported that at two years, 30% of patients who had received
OGX-011 with first-line chemotherapy were alive;
  12




---



##### Table of Contents




    
    for comparison, published studies using a platinum-based regimen plus gemcitabine as
first-line chemotherapy for advanced NSCLC reported median survivals of 8 to 10.8 months and
one-year survival rates of 33% to 43%. Market approval for Avastin plus paclitaxel and
carboplatin chemotherapy for NSCLC was based on results showing a median survival of 12.3
months compared to 10.3 months for patients treated with chemotherapy alone. Survival
rates for Avastin plus chemotherapy versus chemotherapy alone were reported as 51% versus
44% at one year and 23% versus 15% at two years, respectively;
 
    
    73% of patients achieved disease control; and
 
    
    preliminary analyses have shown that treatment with OGX-011 in combination with
gemcitabine and a platinum chemotherapy significantly lowers serum clusterin levels and
that average serum clusterin levels were predictive of survival with low serum clusterin
levels correlating to longer survival.
 Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trial in Advanced Breast Cancer
  
    
    the combination of OGX-011 and docetaxel at 75 mg/m2 is well tolerated and clinical
activity was seen in these patients with metastatic breast cancer.
 Summary of Preliminary Results of OGX-011 Phase 2 Clinical Trial in Patients with Castrate
Resistant Prostate Cancer Receiving Hormone Ablation Therapy
  
 Second Generation Antisense Technology
  
 License and Collaboration Agreements
 Isis Pharmaceuticals, Inc.
    13




---



##### Table of Contents



14




---



##### Table of Contents



15




---



##### Table of Contents



University of British Columbia
        16




---



##### Table of Contents



th
  17




---



##### Table of Contents



Summary of Royalty, Upfront and Milestone Obligations by Product
  
 Royalty Obligations to Third Parties
    
    Total PayableOGX-011(1)
    
    4.0  8.0%OGX-427(1)
    
    3.25  5.75%OGX-225(1)
    
    2.88  5.25%CSP-9222(2)
    
    3.5  7.5%
 (1)
    
    Minimum royalty rates assume certain third party royalties are not payable at the time that the
product candidate is marketed due to the expiration of patents held by such third parties. Maximum
royalty rates assume all third party royalty rates currently in effect continue in effect at the
time that the product candidate is marketed and are net of anti-stacking provisions specified in
OncoGenex agreements.(2)
    
    Royalty rates are tiered based on level of annual sales. Upfront and Milestone Obligations to Third Parties
    
    Total PayableOGX-011OGX-011 licensed prior to initiation of a registration trial
    
    
    31
    %OGX-011 licensed prior to 20% of patients enrolled in a registration trial
    
    
    26
    %OGX-011 licensed prior to marketing approval
    
    
    21
    %OGX-011 licensed thereafter
    
    
    16
    %OGX-427(1)(2)Start Phase 2 Clinical Trial
    
    $
    832,000Start Phase 3 Clinical Trial
    
    $
    1,454,0001st Major Market Approval
    
    $
    1,908,0002nd Major Market Approval
    
    $
    1,500,000OGX-225(2)Start Phase 2 Clinical Trial
    
    $
    582,000Start Phase 3 Clinical Trial
    
    $
    1,204,0001st Major Market Approval
    
    $
    1,408,0002nd Major Market Approval
    
    $
    1,000,000CSP-9222Start Phase 3 Clinical Trial
    
    $
    3,000,0001st NDA filing in the United States
    
    $
    2,000,0001st NDA filing in the European Union
    
    $
    1,000,0001st Market Approval in United States
    
    $
    5,000,0001st Market Approval in European Union
    
    $
    3,000,000
 (1)
    
    Additional milestone payments may be required in respect of OGX-427 for product approvals
outside the field of oncology.(2)
    
    Certain milestone payments are payable in Canadian dollars, which are translated based on the
December 31, 2008 exchange rate of US$1.00 = CAD$1.224, and rounded to the nearest $1,000.  18




---



##### Table of Contents



Government RegulationsDrug Approval Process
   
    
    preclinical studies including laboratory evaluation and animal studies to test for
initial safety and efficacy;
 
    
    submission to national health authorities of an Investigational New Drug (IND) IND,
or Clinical Trials Application (CTA) or equivalent dossier, which must be accepted by
each national health authority before human clinical trials may commence in that country;
 
    
    adequate and well-controlled clinical trials to establish the safety and efficacy of
the drug in its intended population and use(s);
 
    
    submission to appropriate national and/or regional regulatory health authorities of a
NDA, or equivalent marketing authorization application, which application is not
automatically accepted for review; and
 
    
    approval by appropriate regulatory health authorities of the marketing authorization
application prior to any commercial sale or shipment of the drug in each country or
jurisdiction.
        19




---



##### Table of Contents



Contract Research Agreements
   
 Research and Development Expenditures
  
 Manufacturing
    20




---



##### Table of Contents



Intellectual Property
            21




---



##### Table of Contents



Competition
    
    
    establish that its product candidates are well tolerated and result in a clinical
benefit when administered to cancer patients;
 
    
    advance the development of its lead programs, including the enrollment of patients for
its clinical trials;
 
    
    gain regulatory approval for its product candidates in their respective first
indications as well as expand into additional indications;
 
    
    commercialize its lead product candidates successfully, including convincing
physicians, insurers and other third-party payors of the advantages of its products, when
and if it has any, over current therapies;
 
    
    obtain intellectual property protection and protect the exclusivity for its product
candidates and products, when and if it has any; and
 
    
    acquire other product candidates to expand its pipeline.
  22




---



##### Table of Contents



Trademarks
  ®
  
 Employees
    
 Company Information
 th
  
 Available Information
   23




---



##### Table of Contents



ITEM 1A. RISK FACTORS
 Risks Related to Our Business
 Investing in our common shares involves a high degree of risk. You should consider carefully the
risks and uncertainties described below, together with all of the other information contained in this Form
10-K, before deciding to invest in our common shares. If any of the following risks materialize,
our business, financial condition, results of operation and future prospects will likely be
materially and adversely affected. In that event, the market price of our common shares could
decline and you could lose all or part of your investment.
 If we fail to obtain additional capital through licensing of our product candidates or through
financing, we may be unable to complete or continue the development and commercialization of
OGX-011 and our other product candidates, or continue our research and development programs.
  
    
    continue and complete the clinical development of OGX-011, including
initiation of our planned Phase 3 registration trials, and development
of our other product candidates;
    
    develop, license or acquire additional product candidates;
    
    launch and commercialize any product candidates for which we receive
regulatory approval; and
    
    continue our research and development programs.
    The recent volatility in the financial markets could adversely affect us or our partners or
suppliers.
   24




---



##### Table of Contents



We have a limited operating history, have incurred losses since inception and anticipate that we
will continue to incur losses for the foreseeable future. We have never had any products available
for commercial sale and we may never achieve or sustain profitability.
  We are highly dependent on the success of our lead product candidate, OGX-011, and we cannot give
any assurance that OGX-011 or any of our other product candidates will receive regulatory approval.
  Clinical trials may not demonstrate a clinical benefit of our product candidates.
    25




---



##### Table of Contents



Our clinical trials may be suspended or terminated at any time, including by the FDA, other
regulatory authorities, the Institutional Review Board (IRB) overseeing the clinical trial at
issue, any of our clinical trial sites with respect to that site, or by us. Any failure or
significant delay in completing clinical trials for our product candidates could materially harm
our financial results and the commercial prospects for our product candidates.
  
    
    delay or failure to obtain required future additional funding through
private or public offerings of our equity securities, debt financings,
or executing a licensing, partnership or collaboration agreement with
a third party for any of our product candidates;
    
    limited number of, and competition for, suitable patients with the
particular types of cancer required for enrollment in our clinical
trials;
    
    limited number of, and competition for, suitable sites to conduct our clinical trials;
    
    introduction of new product candidates to the market in therapeutic
areas similar to those which we are developing our product candidates.
    
    concurrent evaluation of new investigational product candidates in
therapeutic areas similar to those which we are developing our product
candidates.
    
    delay or failure to obtain the FDAs or non-U.S. regulatory agencies
approval or agreement to commence a clinical trial, including our
phase 3 or registration clinical trials under a Special Protocol
Assessment;
    
    delay or failure to obtain sufficient supplies of the product candidate for its clinical trials;
    
    delay or failure to reach agreement on acceptable clinical trial
agreement terms or clinical trial protocols with prospective sites or
investigators; and
    
    delay or failure to obtain the approval of the IRB to conduct a
clinical trial at a prospective site.
  
    
    delay or failure to obtain required future additional funding through
private or public offerings of our equity securities, debt financings,
or executing a licensing, partnership or collaboration agreement with
a third party for any of our product candidates;
    
    slower than expected rates of patient recruitment and enrollment;
  26




---



##### Table of Contents




    
    failure of patients to complete the clinical trial;
    
    unforeseen safety issues;
    
    lack of efficacy evidenced during clinical trials;
    
    termination of its clinical trials by one or more clinical trial sites;
    
    inability or unwillingness of patients or medical investigators to
follow its clinical trial protocols;
    
    inability to monitor patients adequately during or after treatment; and
    
    introduction of competitive products that may impede its ability to
retain patients in its clinical trials.
  Our product candidates may cause undesirable and potentially serious side effects during clinical
trials that could delay or prevent their regulatory approval or commercialization.
 3
    27




---



##### Table of Contents




    
    regulatory authorities may withdraw their approval of the product;
    
    we may be required to recall the product, change the way the product
is administered, conduct additional clinical trials or change the
labeling of the product;
    
    a product may become less competitive and product sales may decrease; or
    
    our reputation may suffer.
   We may not be able to negotiate the exit or sublease of excess office and laboratory space
currently leased in Bothell, Washington, on terms acceptable to us or at all.
  If our competitors develop and market products that are more effective, safer or less expensive
than our future product candidates, our clinical trials and commercial opportunities will be
negatively impacted.
   28




---



##### Table of Contents



If new therapies become broadly used, we may need to conduct clinical trials of our product
candidates in combination with these new therapies to demonstrate safety and efficacy of the
combination. Additional trials will delay the development of our product candidates and increase
our costs. The failure of certain of our product candidates to work in combination with these new
therapies would have an adverse effect on our business.
   If we were to be successfully sued related to our products or operations, we could face substantial
liabilities that may exceed our resources.
  If we fail to acquire and develop products or product candidates at all or on commercially
reasonable terms, we may be unable to grow our business.
   29




---



##### Table of Contents



If we fail to attract and retain key management and scientific personnel, we may be unable to
successfully develop or commercialize our product candidates.
     30




---



##### Table of Contents



We may encounter difficulties in managing our expected growth and in expanding our operations
successfully.
   We need to further develop our financial and reporting processes, procedures and controls to
support our anticipated growth.
  We may be adversely impacted if our controls over external financial reporting fail or are
circumvented.
   31




---



##### Table of Contents



We rely, in part, on third parties to conduct clinical trials for our product candidates and plan
to rely on third parties to conduct future clinical trials. If these third parties do not
successfully carry out their contractual duties or meet expected deadlines, we may be unable to
obtain regulatory approval for or commercialize our current and future product candidates.
  We rely on third parties to manufacture and supply our product candidates.
      32




---



##### Table of Contents



If we are unable to develop our sales and marketing and distribution capability on our own or
through collaborations with marketing partners, we will not be successful in commercializing our
product candidates. We currently do not have a marketing staff nor a sales or distribution
organization.
  Risks Related to Our Intellectual Property
 Our proprietary rights may not adequately protect our technologies and product candidates.
   
    
    we or our licensors were the first to make the inventions covered by
each of our issued patents and pending patent applications;
    
    we or our licensors were the first to file patent applications for these inventions;
  33




---



##### Table of Contents




    
    others will not independently develop similar or alternative
technologies or duplicate any of our technologies;
    
    any of our or our licensors pending patent applications will result in issued patents;
    
    any of our or our licensors patents will be valid or enforceable;
    
    any patents issued to us or our licensors and collaboration partners
will provide us with any competitive advantages, or will not be
challenged by third parties;
    
    we will develop additional proprietary technologies that are patentable; or
    
    the patents of others will not have an adverse effect on our business.
    34




---



##### Table of Contents



We may not be able to protect our intellectual property rights throughout the world.
   The intellectual property protection for our product candidates is dependent on third parties.
    35




---



##### Table of Contents



The patent protection for our product candidates or products may expire before we are able to
maximize their commercial value which may subject us to increased competition and reduce or
eliminate our opportunity to generate product revenue.
   We may incur substantial costs as a result of litigation or other proceedings relating to patent
and other intellectual property rights and we may be unable to protect our rights to, or use of,
our technology.
    
    
    patent infringement and other intellectual property claims, which
would be costly and time consuming to defend, whether or not the
claims have merit, and which could delay the regulatory approval
process and divert managements attention from our business;
    
    substantial damages for past infringement, which we may have to pay if
a court determines that our product candidates or technologies
infringe a competitors patent or other proprietary rights;
    
    a court prohibiting us from selling or licensing our technologies or
future drugs unless the third party licenses its patents or other
proprietary rights to us on commercially reasonable terms, which it is
not required to do; and
    
    if a license is available from a third party, we may have to pay
substantial royalties or lump sum payments or grant cross licenses to
our patents or other proprietary rights to obtain that license.
  36




---



##### Table of Contents



If we breach any of the agreements under which we license rights to our product candidates or
technology from third parties, we could lose license rights that are important to our business.
Certain of our license agreements may not provide an adequate remedy for their breach by the
licensor.
   37




---



##### Table of Contents



We may be subject to damages resulting from claims that we, or our employees or consultants, have
wrongfully used or disclosed alleged trade secrets of third parties.
  Risks Related to our Common Stock and Other Securities
 If we raise additional financing, the terms of such transactions may cause dilution to existing
shareholders or contain terms that are not favorable to us.
  The price for our common stock is volatile.
    An increase in the market price of our common shares, which is uncertain and unpredictable, may be
your sole source of gain from an investment in our common shares. An investment in our common
shares may not be appropriate for investors who require dividend income.
   38




---



##### Table of Contents



Anti-takeover provisions in our shareholder rights plan, our constating documents and under
Delaware law could make a third party acquisition of the Company difficult.
  Risks Related to Our Industry
 The regulatory approval process is expensive, time consuming and uncertain and may prevent us from
obtaining approvals for the commercialization of some or all of our product candidates.
  
    
    restrictions on the products, manufacturers or manufacturing process;
 
    
    warning letters;
 
    
    civil and criminal penalties;
 
    
    injunctions;
 
    
    suspension or withdrawal of regulatory approvals;
 
    
    product seizures, detentions or import bans;
 
    
    voluntary or mandatory product recalls and publicity requirements;
 
    
    total or partial suspension of production;
 
    
    imposition of restrictions on operations, including costly new manufacturing
requirements; and
 
    
    refusal to approve pending NDAs or supplements to approved NDAs.
  39




---



##### Table of Contents




    
    a drug candidate may not be deemed safe or effective;
 
    
    the FDA may not find the data from pre-clinical studies and clinical trials sufficient;
 
    
    the FDA might not approve our third-party manufacturers processes or facilities;
 
    
    the FDA may change its approval policies or adopt new regulations; or
 
    
    third party products may enter the market and change approval requirements.
 Even if we obtain regulatory approvals for our product candidates, the terms of approvals and
ongoing regulation of our product candidates may limit how we manufacture and market our product
candidates, which could materially impair our ability to generate revenue.
  
    
    restrictions on the products, manufacturers or manufacturing process;
    
    warning letters;
    
    civil or criminal penalties or fines;
    
    injunctions;
    
    product seizures, detentions or import bans;
    
    voluntary or mandatory product recalls and publicity requirements;
  40




---



##### Table of Contents




    
    suspension or withdrawal of regulatory approvals;
    
    total or partial suspension of production;
    
    imposition of restrictions on operations, including costly new
manufacturing requirements; and
    
    refusal to approve pending NDAs or supplements to approved NDAs.
  Even if we receive regulatory approval to market our product candidates, the market may not be
receptive to our products.
  
    
    timing of market introduction of competitive products;
 
    
    safety and efficacy of our products;
 
    
    prevalence and severity of any side effects;
 
    
    potential advantages or disadvantages over alternative treatments;
 
    
    strength of marketing and distribution support;
 
    
    price of our products, both in absolute terms and relative to alternative treatments;
and
 
    
    availability of coverage and reimbursement from government and other third-party
payors.
  There is a high risk that our drug development activities will not result in commercial products.
   41




---



##### Table of Contents



If government and third-party payors fail to provide coverage and adequate reimbursement rates for
our product candidates, our revenues and potential for profitability will be reduced.
    Failure to obtain regulatory approval outside the United States would prevent us from marketing our
product candidates abroad.
   42




---



##### Table of Contents



We are at risk of securities class action litigation.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
    
 ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
   43




---



##### Table of Contents



PART II
 
 ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
   OncoGenex Pharmaceuticals, Inc
    
    HIGH (1)
    
    
    LOW (1)YEAR ENDED DECEMBER 31, 2008:First quarter
    
    
    10.26
    
    
    
    6.12Second quarter
    
    
    9.00
    
    
    
    4.50Third quarter
    
    
    8.22
    
    
    
    3.02Fourth quarter
    
    
    9.38
    
    
    
    2.00YEAR ENDED DECEMBER 31, 2007:First quarter
    
    
    111.96
    
    
    
    81.90Second quarter
    
    
    112.50
    
    
    
    90.36Third quarter
    
    
    97.74
    
    
    
    10.62Fourth quarter
    
    
    12.60
    
    
    
    7.20
 (1)
    
    All amounts reported herein are presented on a post-one-for-eighteen reverse stock
split basis.  Stock Performance Graph
   44




---



##### Table of Contents



The stock price performance included in this graph is not necessarily indicative of future stock
price performance.
 
 12/03
    
    
    12/04
    
    
    12/05
    
    
    12/06
    
    
    12/07
    
    
    8/20/08(1)
    
    
    12/08OncoGenex Pharmaceuticals, Inc.
    
    
    100.00
    
    
    
    69.49
    
    
    
    99.02
    
    
    
    120.28
    
    
    
    8.56
    
    
    
    5.51
    
    
    
    3.28NASDAQ Composite
    
    
    100.00
    
    
    
    110.08
    
    
    
    112.88
    
    
    
    126.51
    
    
    
    138.13
    
    
    
    119.85
    
    
    
    80.47NASDAQ Pharmaceutical
    
    
    100.00
    
    
    
    110.22
    
    
    
    111.87
    
    
    
    114.89
    
    
    
    106.37
    
    
    
    120.80
    
    
    
    97.32
 (1)
    
    August 20, 2008 represents the day before the date of the completion of the Arrangement.  45




---



##### Table of Contents



ITEM 6. SELECTED FINANCIAL DATA
   December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands except share and per share amounts)Statements of Operations Data:Operating expenses
    
    $
    11,112
    
    
    $
    7,675
    
    
    $
    11,302
    
    
    $
    4,666
    
    
    $
    3,708Net loss
    
    $
    4,204
    
    
    $
    8,536
    
    
    $
    11,594
    
    
    $
    4,929
    
    
    $
    4,011Redeemable convertible preferred share
accretion
    
    $
    1,973
    
    
    $
    2,944
    
    
    $
    2,604
    
    
    $
    1,843
    
    
    $
    1,248Loss attributable to common shareholders
    
    $
    6,177
    
    
    $
    11,480
    
    
    $
    14,198
    
    
    $
    6,772
    
    
    $
    5,259Basic and diluted loss per common share
    
    $
    (3.38
    )
    
    $
    (96.63
    )
    
    $
    (119.51
    )
    
    $
    (58.71
    )
    
    $
    (49.53
    )Shares used in calculation of net loss per shareBasic
    
    
    1,829,276
    
    
    
    118,801
    
    
    
    118,801
    
    
    
    115,350
    
    
    
    106,179Diluted
    
    
    1,829,276
    
    
    
    118,801
    
    
    
    118,801
    
    
    
    115,350
    
    
    
    106,179
 December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands)Balance Sheet Data:Cash, cash equivalents
and marketable
securities
    
    $
    12,419
    
    
    $
    5,131
    
    
    $
    8,012
    
    
    $
    13,785
    
    
    $
    7,915Total assets
    
    $
    14,790
    
    
    $
    7,350
    
    
    $
    9,395
    
    
    $
    19,750
    
    
    $
    11,397Current liabilities
    
    $
    2,884
    
    
    $
    8,200
    
    
    $
    2,532
    
    
    $
    1,752
    
    
    $
    2,595Series preferred shares
    
    $
    
    
    
    $
    37,373
    
    
    $
    34,429
    
    
    $
    31,825
    
    
    $
    16,531Common shares
    
    $
    56,076
    
    
    $
    399
    
    
    $
    399
    
    
    $
    399
    
    
    $
    378Deficit accumulated
during the development
stage
    
    $
    (48,009
    )
    
    $
    (41,832
    )
    
    $
    (30,352
    )
    
    $
    (16,154
    )
    
    $
    (9,382
    )Stockholders equity
    
    
    10,707
    
    
    
    (38,223
    )
    
    
    (27,566
    )
    
    
    (13,827
    )
    
    
    (7,729
    )
  46




---



##### Table of Contents



ITEM 7.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
 Forward-Looking Statements
  
    
    our anticipated future capital requirements and the terms of any capital financing
agreements;
 
    
    progress and preliminary and future results of clinical trials;
 
    
    anticipated regulatory filings, requirements and future clinical trials;
 
    
    timing and amount of future contractual payments, product revenue and operating
expenses; and
 
    
    market acceptance of our products and the estimated potential size of these markets.
  
    
    future capital requirements and uncertainty of obtaining additional funding through
corporate partnerships, debt or equity financings;
 
    
    uncertainties regarding the Companys future operating results, and the risk that the
Companys products will not obtain the requisite regulatory approvals to commercialize
its products or that the future sales of the Companys products may be less
than expected;
 
    
    the potential inability to integrate and realize benefits from strategic
opportunities, including mergers and acquisitions;
 
    
    the impact of current, pending or future legislation, regulations and legal actions in
the United States, Canada and elsewhere affecting the pharmaceutical and healthcare
industries;
 
    
    currency fluctuation in the Companys primary markets;
 
    
    the timing, expense and uncertainty associated with the development and regulatory
approval process for products;
  47




---



##### Table of Contents




    
    uncertainties regarding the safety and effectiveness of the Companys products and
technologies;
 
    
    the reliance on third parties who license intellectual property rights to the Company
to comply with the terms of such agreements and to enforce, prosecute and defend such
intellectual property rights;
 
    
    the potential inability to successfully protect and enforce our intellectual property
rights;
 
    
    the risk that results of research and preclinical studies may not be indicative of
results in humans;
 
    
    the risk that results in humans may not be indicative of results in future studies;
 
    
    volatility in the value of our common stock;
 
    
    the Companys dependence on key employees;
 
    
    the potential for product liability issues and related litigation;
 
    
    the potential for claims arising from the use of hazardous materials in our business;
 
    
    fluctuations in our operating results;
 
    
    our ability to build out our product candidate pipeline through product in-licensing
or acquisition activities;
 
    
    proper management of our operations will be critical to the success of the Company;
 
    
    history of operating losses and uncertainty of future financial results;
 
    
    dependence on the development and commercialization of products;
 
    
    acceptance of our products by the medical community;
 
    
    uncertainty relating to the timing and results of clinical trials;
 
    
    general competitive conditions within the drug development and pharmaceutical
industry; and
 
    
    general economic conditions.
    48




---



##### Table of Contents



MD&A Overview
  
    
    an overview of our business;
 
    
    results of operations and why those results are different from the prior year; and
 
    
    capital resources we currently have and possible sources of additional funding for
future capital requirements.
  Arrangement Agreement
     Sonus common stock
    
    $
    10,385Fair value of options and warrants assumed
    
    
    71Transaction costs of OncoGenex
    
    
    807Total purchase price
    
    $
    11,263
  49




---



##### Table of Contents



Cash
    
    $
    5,464Marketable securities
    
    
    14,808Accounts receivable
    
    
    6Interest receivable
    
    
    273Other current assets
    
    
    175Furniture and equipment
    
    
    1,186Other long term assets
    
    
    497Intangible assets
    
    
    280Accounts payable
    
    
    (35
    )Accrued expenses excluding severance payable
    
    
    (652
    )Severance payable to employees as part of restructuring
    
    
    (1,322
    )Severance payable to senior executives
    
    
    (1,440
    )Excess facility loss
    
    
    (2,083
    )Negative goodwill
    
    
    (5,894
    )Total purchase price
    
    $
    11,263
   Negative goodwill
    
    $
    (5,894
    )Furniture and equipment
    
    
    1,186Intangible assets
    
    
    280Excess negative goodwill
    
    $
    (4,428
    )
 Pro Forma Results of Operations
  For the year ended
    
    
    For the year endedDecember 31,
    
    
    December 31,(in thousands except share and per share amounts)
    
    2008
    
    
    2007Revenue
    
    $
    
    
    
    $
    20,131Net loss applicable to common
shareholders
    
    $
    (28,102
    )
    
    $
    (19,977
    )Net loss per share  basic and diluted
    
    $
    (15.36
    )
    
    $
    (168.16
    )Weighted average shares
    
    
    1,829,276
    
    
    
    118,801
  50




---



##### Table of Contents



Overview of the Company
       51




---



##### Table of Contents



Revenues
  Research and Development Expenses
      General and Administrative Expenses
  Restructuring Activities
 , Recognition of Liabilities in Connection with a Purchase
Business Combination
 , Recognition of Liabilities in Connection with a Purchase
Business Combination
  52




---



##### Table of Contents



, Recognition of Liabilities in Connection with a Purchase Business
Combination
 Results of Operations
  Years Ended December 31, 2008 and December 31, 2007
      53




---



##### Table of Contents



Years Ended December 31, 2007 and December 31, 2006
     Liquidity and Capital Resources
   Cash Flows
 Cash Used in Operations
     54




---



##### Table of Contents



Cash Provided by Financing Activities
  Cash Used/Provided by Investing Activities
   Operating Capital and Capital Expenditure Requirements
  
    
    completion of its ongoing phase 2 clinical trials of OGX-011;
 
    
    completion of its phase 1 clinical trial evaluating OGX-427 as a monotherapy in
patients with solid tumors;
 
    
    reaching an agreement with the FDA via the Special Protocol Assessment process (SPA)
on the design of a second phase 3 registration trial evaluating durable pain palliation
for OGX-011 in combination with docetaxel as second-line chemotherapy in patients with
CRPC;
 
    
    initiation of an investigator-sponsored phase 1 clinical trial evaluating OGX-427
treatment in patient with bladder cancer; and
 
    
    working capital, capital expenditures and general corporate purposes.
   
    
    our ability to obtain additional funding through executing a partnership or
collaboration agreement with a third party that has sufficient resources to fund the
development of our product candidates or the licensing or sale of certain of our product
candidates, or through private or public offerings of our equity securities or debt
financings;
 
    
    timing and costs of clinical trials, preclinical development and regulatory approvals;
 
    
    timing and cost of drug discovery and research and development;
 
    
    entering into new collaborative or product license agreements for products in our
pipeline; and
 
    
    costs related to obtaining, defending and enforcing patents.
  55




---



##### Table of Contents



Contractual Obligations
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsBothell office operating
lease (1)
    
    $
    20,179,000
    
    
    $
    2,437,000
    
    
    $
    4,050,000
    
    
    $
    4,297,000
    
    
    $
    9,395,000Vancouver office operating
lease (2)
    
    $
    111,000
    
    
    $
    111,000
    
    
    
    
    
    
    
    
    
    
    
    Bayer license maintenance
fees (3)
    
    $
    750,000
    
    
    $
    100,000
    
    
    $
    275,000
    
    
    $
    375,000
    
    
    
    UBC license maintenance
fees (4)
    
    $
    32,500
    
    
    $
    6,500
    
    
    $
    13,000
    
    
    $
    13,000
    
    
    
    Isis purchase obligation (5)
    
    $
    1,356,000
    
    
    $
    1,356,000
    
    
    
    
    
    
    
    
    
    
    
    Leased equipment
    
    $
    47,000
    
    
    $
    45,000
    
    
    $
    2,000
    
    
    
    
    
    
    
    Total
    
    $
    22,475,500
    
    
    $
    4,055,500
    
    
    $
    4,340,000
    
    
    $
    4,685,000
    
    
    $
    9,395,000
 (1)
    
    This operating lease, which commenced in 2007, is for a term of ten years and
contains a provision for two additional five-year renewals.(2)
    
    This operating lease expires in 2009 and contains a provision for one five-year
renewal.(3)
    
    Under the terms of our agreement with Bayer, OncoGenex will make annual payments to
Bayer on June 27 of each year (Anniversary Payments), with an initial payment of $100,000 in
2009. The payments will increase annually by $25,000 until the initiation of the first phase 3
clinical trial related relating to CSP-9222, at which point the Anniversary Payments reset to
$100,000 and increase by $25,000, until such time as the Company achieves either the first NDA
filing in the United States or the European Union related to CSP-9222. For the purposes of this
table we assume no reset in pricing resulting from initiation of phase 3 trials. OncoGenex has the
option to terminate this contract upon 60 days written notice to Bayer.(4)
    
    The Company is obligated to pay an annual license maintenance fee of CAD $8,000 to
UBC, which has been translated based on the December 31, 2008 exchange rate of US$1.00 =
CAD$1.224, and rounded to the nearest $100.(5)
    
    Amount represents OncoGenex purchase obligation with respect to the purchase from
Isis of, and the payment obligation for, OGX-011 Active Pharmaceutical Ingredient. Off-Balance Sheet Arrangements
   56




---



##### Table of Contents



Inflation
  Contingencies and Commitments
      Material Changes in Financial Condition
 (in thousands)
    
    December 31, 2008
    
    
    December 31, 2008Total Assets
    
    $
    14,790
    
    
    $
    7,350Total Liabilities
    
    $
    4,083
    
    
    $
    45,573Total Equity
    
    $
    10,707
    
    
    $
    (38,223
    )
   57




---



##### Table of Contents



Critical Accounting Policies and Estimates
 Significant Accounting Policies
     Recent accounting pronouncements
     58




---



##### Table of Contents



(FSP 142-3).
    59




---



##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Interest Rate Risk
  Foreign Currency Exchange Risk
   60




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 INDEX TO FINANCIAL STATEMENTS:Report of Independent Registered Public Accounting Firm
    
    
    62Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    63Consolidated Statements of Loss for the years ended December 31, 2008, 2007, and 2006
    
    
    64Consolidated Statements of Stockholders Equity for the years ended December 31, 2008, 2007, and 2006
    
    
    65Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006
    
    
    66Notes to Consolidated Financial Statements
    
    
    67
  61




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 OncoGenex Pharmaceuticals, Inc.
    Vancouver, Canada,
    
    ERNST & YOUNG LLPFebruary 25, 2009
  62




---



##### Table of Contents



OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Balance Sheets
 (a development stage enterprise)
 (In thousands of U.S. dollars)
 December 31,
    
    
    December 31,2008
    
    
    2007$
    
    
    $Note 1ASSETSCurrentCash and cash equivalents
    
    
    7,618
    
    
    
    4,626Short-term investments [note 5]
    
    
    4,801
    
    
    
    505Amounts receivable
    
    
    153
    
    
    
    77Investment tax credit recoverable
    
    
    1,090
    
    
    
    1,736Prepaid expenses
    
    
    587
    
    
    
    295Total current assets
    
    
    14,249
    
    
    
    7,239Property and equipment, net [note 6]
    
    
    44
    
    
    
    99Other assets
    
    
    497
    
    
    
    12Total assets
    
    
    14,790
    
    
    
    7,350LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIENCY)CurrentAccounts payable and accrued liabilities
    
    
    2,252
    
    
    
    1,048Convertible debentures [note 10]
    
    
    
    
    
    
    4,665Current portion of long-term obligations [note 7]
    
    
    632
    
    
    
    Total current liabilities
    
    
    2,884
    
    
    
    5,713Taxes payable
    
    
    
    
    
    
    2,487Long-term obligation, less current portion [note 7]
    
    
    1,199
    
    
    
    Total liabilities
    
    
    4,083
    
    
    
    8,200Commitments and contingencies [note 14]Class A redeemable convertible preferred shares:no par value; unlimited number authorized; nil shares issued and
outstanding at December 31, 2008 and 848,805 at December 31, 2007
(aggregate retraction amount of nil at December 31, 2008, and $5,720
at December 31, 2007) [note 11]
    
    
    
    
    
    
    4,329Class B redeemable convertible preferred shares:no par value; unlimited number authorized; nil shares issued and
outstanding at December 31, 2008, and 8,945,448 at December 31, 2007
(aggregate retraction amount of nil at December 31, 2008, and
$33,432 at December 31, 2007) [note 11]
    
    
    
    
    
    
    33,044Shareholders equity (deficiency):Common shares:no par value; unlimited number authorized; 118,801 shares issued and
outstanding at December 31, 2007 [note 12]
    
    
    
    
    
    
    399Common shares:$0.001 par value 11,019,930 shares authorized and 5,544,114 issued and
outstanding at December 31, 2008
    
    
    6
    
    
    
    Additional paid-in capital
    
    
    56,070
    
    
    
    567Deficit accumulated during the development stage
    
    
    (48,009
    )
    
    
    (41,832
    )Accumulated other comprehensive income
    
    
    2,640
    
    
    
    2,643Total shareholders equity (deficiency)
    
    
    10,707
    
    
    
    (38,223
    )Total liabilities and shareholders equity (deficiency)
    
    
    14,790
    
    
    
    7,350
  63




---



##### Table of Contents



OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Statements of Loss
 (In thousands of U.S. dollars, except share and per share amounts)
 Period from26-May-00(inception) toYears ended December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2008$
    
    
    $
    
    
    $
    
    
    $EXPENSESResearch and development
    
    
    7,819
    
    
    
    4,135
    
    
    
    7,974
    
    
    
    28,608General and administrative
    
    
    3,293
    
    
    
    3,540
    
    
    
    3,328
    
    
    
    13,422Total expenses
    
    
    11,112
    
    
    
    7,675
    
    
    
    11,302
    
    
    
    42,030OTHER INCOME (EXPENSE)Interest income
    
    
    210
    
    
    
    177
    
    
    
    454
    
    
    
    1,412Other
    
    
    211
    
    
    
    (325
    )
    
    
    (71
    )
    
    
    (583
    )Total other income (expense)
    
    
    421
    
    
    
    (148
    )
    
    
    383
    
    
    
    829Loss for the period before taxes and
extraordinary gain
    
    
    (10,691
    )
    
    
    (7,823
    )
    
    
    (10,919
    )
    
    
    (41,201
    )Income tax expense (recovery) [note 9]
    
    
    (2,059
    )
    
    
    713
    
    
    
    675
    
    
    
    107Loss before extraordinary gain
    
    
    (8,632
    )
    
    
    (8,536
    )
    
    
    (11,594
    )
    
    
    (41,308
    )Extraordinary gain [note 4]
    
    
    4,428
    
    
    
    
    
    
    
    
    
    
    
    4,428Net loss
    
    
    (4,204
    )
    
    
    (8,536
    )
    
    
    (11,594
    )
    
    
    (36,880
    )Redeemable convertible preferred share
accretion
    
    
    1,973
    
    
    
    2,944
    
    
    
    2,604
    
    
    
    11,129Loss attributable to common
shareholders
    
    
    (6,177
    )
    
    
    (11,480
    )
    
    
    (14,198
    )
    
    
    (48,009
    )Basic and diluted loss per common share
[note 12[h]]
    
    
    (3.38
    )
    
    
    (96.63
    )
    
    
    (119.51
    )Weighted average number of common
shares [note 12[h]]
    
    
    1,829,276
    
    
    
    118,801
    
    
    
    118,801
   64




---



##### Table of Contents



OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Statements of Stockholders Equity
 (In thousands of U.S. dollars, except share amounts)
 DeficitAccumulated
    
    
    
    
    
    
    AccumulatedOther
    
    
    Other
    
    
    During the
    
    
    TotalCommon
    
    
    
    
    
    
    Comprehensive
    
    
    Comprehensive
    
    
    Development
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Income (Loss)
    
    
    Income (Loss)
    
    
    Stage
    
    
    Deficiency(in thousands of U.S. dollars, except share amounts)Balance, December 31, 2005
    
    
    118,801
    
    
    
    521
    
    
    
    1,806
    
    
    
    
    
    
    
    (16,154
    )
    
    
    (13,827
    )Stock-based compensation expense
    
    
    
    
    
    
    182
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    182Cumulative translation adjustment from application of
US dollar reporting
    
    
    
    
    
    
    
    
    
    
    316
    
    
    
    316
    
    
    
    
    
    
    
    316Reclassification of unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Unrealized loss on marketable securities
    
    
    
    
    
    
    
    
    
    
    (2
    )
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Redeemable convertible preferred share accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,604
    )
    
    
    (2,604
    )Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,594
    )
    
    
    (11,594
    )
    
    
    (11,594
    )Comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,317
    )Balance, December 31, 2006
    
    
    118,801
    
    
    
    703
    
    
    
    2,083
    
    
    
    
    
    
    
    (30,352
    )
    
    
    (27,566
    )Stock-based compensation expense
    
    
    
    
    
    
    263
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    263Cumulative translation adjustment from application of
US dollar reporting
    
    
    
    
    
    
    
    
    
    
    557
    
    
    
    557
    
    
    
    
    
    
    
    557Reclassification of unrealized loss on marketable securities
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    2
    
    
    
    
    
    
    
    2Unrealized gain on marketable securities
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    1Redeemable convertible preferred share accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,944
    )
    
    
    (2,944
    )Loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,536
    )
    
    
    (8,536
    )
    
    
    (8,536
    )Comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,976
    )Balance, December 31, 2007
    
    
    118,801
    
    
    
    966
    
    
    
    2,643
    
    
    
    
    
    
    
    (41,832
    )
    
    
    (38,223
    )Stock-based compensation expense
    
    
    
    
    
    
    174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    174Shares held by Sonus shareholders
    
    
    2,059,898
    
    
    
    10,456
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,456Shares issued in exchange for convertible debentures
    
    
    1,036,586
    
    
    
    5,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,012Shares issued in exchange for preferred shares
    
    
    905,131
    
    
    
    39,345
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39,345Escrow shares released on achievement of milestones
    
    
    1,388,875Stock option exercises
    
    
    34,601
    
    
    
    122
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    122Issuance of common stock under employee benefit plans
    
    
    222
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Cumulative translation adjustment from application of
US dollar reporting
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Redeemable convertible preferred share accretion
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,973
    )
    
    
    (1,973
    )Loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,204
    )
    
    
    (4,204
    )
    
    
    (4,204
    )Comprehensive loss for the period
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,207
    )Balance, December 31, 2008
    
    
    5,544,114
    
    
    
    56,076
    
    
    
    2,640
    
    
    
    
    
    
    
    (48,009
    )
    
    
    10,707
  65




---



##### Table of Contents



OncoGenex Pharmaceuticals, Inc.
 
 Consolidated Statements of Cash Flows
 (In thousands of U.S. dollars)
 Period from26-May-00(inception) toYears ended December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006
    
    
    2008$
    
    
    $
    
    
    $
    
    
    $OPERATING ACTIVITIESIncome (loss) for the period
    
    
    (4,204
    )
    
    
    (8,536
    )
    
    
    (11,594
    )
    
    
    (36,880
    )Add items not involving cashExtraordinary gain
    
    
    (4,428
    )
    
    
    
    
    
    
    
    
    
    
    (4,428
    )Depreciation and amortization
    
    
    89
    
    
    
    83
    
    
    
    94
    
    
    
    427Stock-based collaboration expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,758Stock-based compensation [note 12[c]]
    
    
    174
    
    
    
    263
    
    
    
    182
    
    
    
    735Accrued interest on convertible debenture [note 10]
    
    
    313
    
    
    
    193
    
    
    
    
    
    
    
    505Changes in non-cash working capital items
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amounts receivable
    
    
    204
    
    
    
    181
    
    
    
    126
    
    
    
    127Investment tax credit recoverable
    
    
    646
    
    
    
    (993
    )
    
    
    (184
    )
    
    
    (1,089
    )Prepaid expenses
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    (295
    )Other assets
    
    
    (117
    )
    
    
    (1
    )
    
    
    
    
    
    
    (129
    )Accounts payable and accrued liabilities
    
    
    (2,244
    )
    
    
    (2
    )
    
    
    129
    
    
    
    (1,198
    )Lease obligation
    
    
    (253
    )
    
    
    
    
    
    
    
    
    
    
    (253
    )Taxes payable on preferred shares
    
    
    (2,487
    )
    
    
    1,001
    
    
    
    651
    
    
    
    Cash used in operating activities
    
    
    (12,307
    )
    
    
    (7,879
    )
    
    
    (10,596
    )
    
    
    (40,720
    )FINANCING ACTIVITIESCash paid on fractional shares eliminated on reverse share split
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (3
    )Proceeds from issuance of common stock under stock option and
employee purchase plans
    
    
    124
    
    
    
    
    
    
    
    
    
    
    
    124Issuance of preferred shares, net of share issue costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26,719Issuance of common shares, net of share issue costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    146Issuance of convertible debentures net of issue costs
    
    
    
    
    
    
    4,442
    
    
    
    
    
    
    
    4,442Cash provided by financing activities
    
    
    121
    
    
    
    4,442
    
    
    
    
    
    
    
    31,428INVESTING ACTIVITIESPurchase of investments
    
    
    (4,843
    )
    
    
    (6,763
    )
    
    
    (18,093
    )
    
    
    (89,020
    )Proceeds from sale of investments
    
    
    15,276
    
    
    
    13,058
    
    
    
    29,286
    
    
    
    101,584Purchase of property and equipment
    
    
    (3
    )
    
    
    (17
    )
    
    
    (38
    )
    
    
    (391
    )Cash received on reverse takeover of Sonus
    
    
    5,464
    
    
    
    
    
    
    
    
    
    
    
    5,464Transaction fees on reverse takeover of Sonus
    
    
    (807
    )
    
    
    
    
    
    
    
    
    
    
    (807
    )Cash provided by investing activities
    
    
    15,087
    
    
    
    6,278
    
    
    
    11,155
    
    
    
    16,830Effect of exchange rate changes on cash
    
    
    90
    
    
    
    (68
    )
    
    
    12
    
    
    
    (80
    )Increase in cash and cash equivalents during the period
    
    
    2,992
    
    
    
    2,773
    
    
    
    571
    
    
    
    7,618Cash and cash equivalents, beginning of the period
    
    
    4,626
    
    
    
    1,853
    
    
    
    1,282
    
    
    
    Cash and cash equivalents, end of the period
    
    
    7,618
    
    
    
    4,626
    
    
    
    1,853
    
    
    
    7,618
   66




---



##### Table of Contents



OncoGenex Pharmaceuticals, Inc.
 
 Notes to Consolidated Financial Statements
 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION
   Basis of Presentation
  Liquidity
    67




---



##### Table of Contents



2. ACCOUNTING POLICIES
 Significant Accounting Policies
 Use of Estimates
  Cash and Cash Equivalents
  Short-Term Investments
  Property and Equipment
  Computer equipment
    
    3 yearsComputer software
    
    3 yearsFurniture and fixtures
    
    5 yearsLeasehold improvements
    
    Over the term of the lease
 Reporting Currency and Foreign Currency Translation
   Income Taxes
   68




---



##### Table of Contents



Scientific Research and Development Tax Credits
  Research and Development Costs
   Stock-Based Compensation
  Segment Information
 About Segments of an Enterprise
and Related Information
 Comprehensive Income (Loss)
  Income (Loss) per Common Share
   69




---



##### Table of Contents



Recently Adopted Accounting Policies
      70




---



##### Table of Contents



Recent Accounting Pronouncements
        71




---



##### Table of Contents



3. FINANCIAL INSTRUMENTS AND RISK
     72




---



##### Table of Contents



4. REVERSE TAKEOVER
     Sonus common stock
    
    $
    10,385Fair value of options and warrants assumed
    
    
    71Transaction costs of OncoGenex
    
    
    807Total purchase price
    
    $
    11,263
  Cash
    
    $
    5,464Marketable securities
    
    
    14,808Accounts receivable
    
    
    6Interest receivable
    
    
    273Other current assets
    
    
    175Furniture and equipment
    
    
    1,186Other long term assets
    
    
    497Intangible assets
    
    
    280Accounts payable
    
    
    (35
    )Accrued expenses excluding severance payable
    
    
    (652
    )Severance payable to employees as part of restructuring
    
    
    (1,322
    )Severance payable to senior executives
    
    
    (1,440
    )Excess facility loss
    
    
    (2,083
    )Negative goodwill
    
    
    (5,894
    )Total purchase price
    
    $
    11,263
  73




---



##### Table of Contents



Negative goodwill
    
    $
    (5,894
    )Furniture and equipment
    
    
    1,186Intangible assets
    
    
    280Excess negative goodwill
    
    $
    (4,428
    )
 Pro Forma Results of Operations
  For the year ended
    
    
    For the year endedDecember 31,
    
    
    December 31,(in thousands except shareholder and  per share amounts)
    
    2008
    
    
    2007Revenue
    
    $
    
    
    
    $
    20,131Net loss applicable to common
shareholders
    
    $
    (28,102
    )
    
    $
    (19,977
    )Net loss per share  basic and diluted
    
    $
    (15.36
    )
    
    $
    (168.16
    )Weighted average shares
    
    
    1,829,276
    
    
    
    118,801
 5. FAIR VALUE MEASUREMENTS
   74




---



##### Table of Contents




    
    Level 1  Quoted prices in active markets for identical securities;
 
    
    Level 2  Other significant observable inputs that are observable through corroboration
with market data (including quoted prices in active markets for similar securities);
 
    
    Level 3  Significant unobservable inputs that reflect managements best estimate of
what market participants would use in pricing the asset or liability.
  Financial Instruments
 U.S. Government and Agency Securities
 U.S. Government Securities
 U.S. Agency Securities
 Corporate and Other Debt
 Corporate Bonds
  (in thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    2008Corporate debt securities
    
    $
    
    
    
    $
    3,792
    
    
    
    
    
    
    
    3,792US agency securities
    
    
    
    
    
    
    1,009
    
    
    
    
    
    
    
    1,009Asset-backed securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    4,801
    
    
    
    
    
    
    
    4,801
 75




---



##### Table of Contents



Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(in thousands)
    
    Cost
    
    
    Gain
    
    
    Loss
    
    
    Value2008Corporate debt
securities
    
    $
    3,797
    
    
    $
    2
    
    
    $
    (7
    )
    
    $
    3,792US agency securities
    
    
    1,007
    
    
    
    2
    
    
    
    
    
    
    
    1,009$
    4,804
    
    
    $
    4
    
    
    $
    (7
    )
    
    $
    4,8012007Corporate debt
securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    US agency securities
    
    
    504
    
    
    
    1
    
    
    
    
    
    
    
    505$
    504
    
    
    $
    1
    
    
    $
    
    
    
    $
    505
  6. PROPERTY AND EQUIPMENT
 Accumulated
    
    
    Net Book(in thousands)
    
    Cost
    
    
    Amortization
    
    
    Value$
    
    
    $
    
    
    $December 31 2008Computer equipment
    
    
    166
    
    
    
    152
    
    
    
    14Computer software
    
    
    102
    
    
    
    96
    
    
    
    6Furniture and fixtures
    
    
    94
    
    
    
    70
    
    
    
    23Leasehold improvements
    
    
    38
    
    
    
    38
    
    
    
    400
    
    
    
    356
    
    
    
    44December 31 2007Computer equipment
    
    
    204
    
    
    
    173
    
    
    
    31Computer software
    
    
    133
    
    
    
    117
    
    
    
    16Furniture and fixtures
    
    
    115
    
    
    
    66
    
    
    
    49Leasehold improvements
    
    
    52
    
    
    
    49
    
    
    
    3504
    
    
    
    405
    
    
    
    99
 7. SEVERANCE CHARGES AND OTHER RESTRUCTURING ACTIVITIES
 , Recognition of Liabilities in Connection with a Purchase
Business Combination
 , Recognition of Liabilities in Connection with a Purchase
Business Combination
  76




---



##### Table of Contents



, Recognition of Liabilities in Connection with a Purchase Business Combination
 Amortization
    
    
    RemainingLiability at
    
    
    Payments
    
    
    of excess lease
    
    
    Liability at(in thousands)
    
    August 21, 2008
    
    
    made
    
    
    facility
    
    
    December 31, 2008Executive severance
    
    
    1,439
    
    
    
    1,439
    
    
    
    
    
    
    
    Employee severance
    
    
    1,323
    
    
    
    1,186
    
    
    
    
    
    
    
    137Excess lease facility
    
    
    2,084
    
    
    
    
    
    
    
    362
    
    
    
    1,722
 8. OTHER ASSETS
  9. INCOME TAX
  (in thousands)
    
    2008
    
    
    2007
    
    
    2006Income taxes at statutory rates
    
    
    (3,635
    )
    
    
    (2,669
    )
    
    
    (3,726
    )Expenses (income) not deducted (included) for tax purposes
    
    
    3,991
    
    
    
    389
    
    
    
    169Effect of tax rate changes on deferred tax assets and liabilities
    
    
    974
    
    
    
    1,721
    
    
    
    857Reduction in benefit of operating losses
    
    
    339
    
    
    
    
    
    
    
    Foreign exchange effect on valuation allowance
    
    
    2,244
    
    
    
    (1,643
    )
    
    
    97Investment tax credits
    
    
    (180
    )
    
    
    
    
    
    
    Research and development tax credits
    
    
    
    
    
    
    (96
    )
    
    
    (68
    )Change in valuation allowance
    
    
    1,643
    
    
    
    2,685
    
    
    
    3,261Reversal of pre transaction income
    
    
    (5,310
    )
    
    
    
    
    
    
    Part VI.I tax
    
    
    (2,125
    )
    
    
    676
    
    
    
    667Part VI.I tax deduction
    
    
    
    
    
    
    (519
    )
    
    
    (512
    )Other
    
    
    
    
    
    
    169
    
    
    
    (70
    )Income tax expense
    
    
    (2,059
    )
    
    
    713
    
    
    
    675
   77




---



##### Table of Contents



Non-capitaland NetInvestment
    
    
    OperatingTax Credits
    
    
    Losses$
    
    
    $(In thousands)2009
    
    
    
    
    
    
    2,2652010
    
    
    
    
    
    
    5,6522011
    
    
    2
    
    
    
    472012
    
    
    2
    
    
    
    442013
    
    
    1
    
    
    
    3,4222014
    
    
    
    
    
    
    2,8552015
    
    
    199
    
    
    
    2016
    
    
    
    
    
    
    2017
    
    
    
    
    
    
    2018
    
    
    
    
    
    
    10,5242019
    
    
    
    
    
    
    372020
    
    
    
    
    
    
    2,8142021
    
    
    
    
    
    
    2202022
    
    
    
    
    
    
    11,8672023
    
    
    
    
    
    
    10,7572024
    
    
    
    
    
    
    16,6172025
    
    
    
    
    
    
    7,8302026
    
    
    57
    
    
    
    31,2922027
    
    
    
    
    
    
    26,7802028
    
    
    7
    
    
    
    16,898268
    
    
    
    149,921
   78




---



##### Table of Contents



(in thousands)
    
    2008
    
    
    2007$
    
    
    $Deferred tax assets:Tax basis in excess of book
value of assets
    
    
    692
    
    
    
    1,026Non-capital loss carryforwards
    
    
    48,923
    
    
    
    4,547Research and development
deductions and credits
    
    
    3,777
    
    
    
    1,669Part VI.1 tax deduction
    
    
    
    
    
    
    1,511Share issue costs
    
    
    144
    
    
    
    (5
    )Stock options
    
    
    1,560
    
    
    
    Capital loss carryforward
    
    
    268
    
    
    
    72Deferred rent
    
    
    494
    
    
    
    Total deferred tax assets
    
    
    55,858
    
    
    
    10,982Valuation allowance
    
    
    (55,858
    )
    
    
    (10,982
    )
    (in thousands)
    
    $Balance as of December 31, 2007
    
    
    614Additions based on the reverse takeover of Sonus
    
    
    1,355Additions based on tax positions related to the current year
    
    
    342Deductions based on tax positions related to the current year
    
    
    (355
    )Balance as of December 31, 2008
    
    
    1,956
   79




---



##### Table of Contents



Tax
    
    Years open toJurisdiction
    
    examinationCanada
    
    
    2002 to 2008US
    
    
    2002 to 2008
 10. CONVERTIBLE DEBENTURES
   11. REDEEMABLE CONVERTIBLE PREFERRED SHARES
 [a] Authorized
   [b] Issued and outstanding shares
    80




---



##### Table of Contents



12. COMMON STOCK
 [a] Authorized
  [b] Issued and outstanding shares
   Escrow shares
     81




---



##### Table of Contents



[c] Stock options
 OncoGenex Technologies Inc. Stock Option Plan
    Sonus Option Plans
   82




---



##### Table of Contents



SFAS 123R
  Share-Based Payment
  Years ended December 31,2008
    
    
    2007
    
    
    2006Risk-free interest rates
    
    
    1.71
    %
    
    
    4.63
    %
    
    
    4.09
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Expected life
    
    5.2 years
    
    
    5 years
    
    
    5 yearsExpected volatility
    
    
    77
    %
    
    
    100
    %
    
    
    100
    %
    83




---



##### Table of Contents



Years ended December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006$
    
    
    $
    
    
    $Research and development
    
    
    65
    
    
    
    93
    
    
    
    49General and administrative
    
    
    109
    
    
    
    170
    
    
    
    133Total share-based compensation
    
    
    174
    
    
    
    263
    
    
    
    182
   Numberof
    
    
    WeightedOptioned
    
    
    AverageCommon
    
    
    ExerciseShares
    
    
    Price#
    
    
    $Balance, December 31, 2005
    
    
    290,226
    
    
    
    3.94Option grants
    
    
    25,572
    
    
    
    4.11Option forfeited
    
    
    (5,879
    )
    
    
    3.89Balance, December 31, 2006
    
    
    309,919
    
    
    
    3.95Option grants
    
    
    15,984
    
    
    
    18.93Option forfeited
    
    
    (1,672
    )
    
    
    18.93Balance, December 31, 2007
    
    
    324,231
    
    
    
    4.61Additions from Sonus Option Plans
    
    
    98,249
    
    
    
    27.89Option grants
    
    
    397,150
    
    
    
    2.93Option exercises
    
    
    (34,601
    )
    
    
    3.57Option forfeited
    
    
    (61,886
    )
    
    
    28.08Balance, December 31, 2008
    
    
    723,143
    
    
    
    4.88
  84




---



##### Table of Contents



Weighted-
    
    
    
    
    
    
    
    
    
    
    Weighted-Options
    
    
    Average
    
    
    Options
    
    
    
    
    
    
    AverageOutstanding
    
    
    Remaining
    
    
    Exercisable
    
    
    Weighted-
    
    
    RemainingNumber of
    
    
    Contractual
    
    
    Number of
    
    
    Average
    
    
    ContractualShares
    
    
    Life
    
    
    Shares
    
    
    Exercise
    
    
    LifeExercise Prices
    
    Outstanding
    
    
    (in years)
    
    
    Outstanding
    
    
    Price
    
    
    (in years)2.69
    
    
    85,000
    
    
    
    6.8
    
    
    
    
    
    
    
    
    
    
    
    3.00
    
    
    312,150
    
    
    
    7.0
    
    
    
    
    
    
    
    
    
    
    
    3.89
    
    
    115,012
    
    
    
    1.8
    
    
    
    115,012
    
    
    
    3.89
    
    
    
    1.84.11
    
    
    154,697
    
    
    
    3.8
    
    
    
    149,226
    
    
    
    4.11
    
    
    
    3.86.60
    
    
    36,355
    
    
    
    7.3
    
    
    
    36,355
    
    
    
    6.6
    
    
    
    7.318.94
    
    
    12,169
    
    
    
    5.5
    
    
    
    9,992
    
    
    
    18.94
    
    
    
    5.565.25
    
    
    111
    
    
    
    0.2
    
    
    
    111
    
    
    
    0.2
    
    
    
    0.268.25
    
    
    555
    
    
    
    2.8
    
    
    
    555
    
    
    
    2.8
    
    
    
    2.8108.00
    
    
    7,094
    
    
    
    1.1
    
    
    
    7,094
    
    
    
    1.1
    
    
    
    1.1723,143
    
    
    
    6.64
    
    
    
    318,345
    
    
    
    3.18
    
    
    
    3.47
    [d] Stock Warrants
  [e] Sonus Employee Stock Purchase Plan
  [f] Shareholder Rights Plan
   85




---



##### Table of Contents



[g] 401(k) Plan
  [h] Loss per common share
  Years ended December 31,(in thousands except shares and per share amounts)
    
    2008
    
    
    2007
    
    
    2006NumeratorIncome (loss) attributable to common shareholders
as reported
    
    $
    (6,177
    )
    
    $
    (11,480
    )
    
    $
    (14,198
    )DenominatorWeighted average number of common shares outstanding
    
    
    1,829,276
    
    
    
    118,801
    
    
    
    118,801Basic and diluted income (loss) per common share
    
    $
    (3.38
    )
    
    $
    (96.63
    )
    
    $
    (119.51
    )Earnings per share associated with $4,428
extraordinary gain
    
    $
    2.42Basic and diluted income (loss) per common share excluding extraordinary gain
    
    $
    (5.80
    )
    
    $
    (96.63
    )
    
    $
    (119.51
    )
  13. RELATED PARTY TRANSACTIONS
    86




---



##### Table of Contents



14. COMMITMENTS AND CONTINGENCIES
 Isis Pharmaceuticals Inc. and University of British Columbia
     Bayer HealthCare LLC
   Lease Arrangements
   $(in thousands)2009
    
    
    111Total
    
    
    111
    87




---



##### Table of Contents



$(in thousands)2009
    
    
    1,9822010
    
    
    1,9972011
    
    
    2,0552012
    
    
    2,1172013
    
    
    2,180remainder
    
    
    9,396Total
    
    
    19,727
 Guarantees and Indemnifications
      88




---



##### Table of Contents



15. COMPREHENSIVE INCOME (LOSS)
 Year ended December 31,(in thousands)
    
    2008
    
    
    2007$
    
    
    $Loss for the period
    
    
    (4,204
    )
    
    
    (8,536
    )Unrealized gain (loss) on cash equivalents
and marketable securities
    
    
    
    
    
    
    3Unrealized gain (loss) on foreign exchange
    
    
    (3
    )
    
    
    557(4,207
    )
    
    
    (7,976
    )
 16. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 Quarter EndedDec. 31
    
    
    Sept. 30
    
    
    Jun. 30
    
    
    Mar. 31(in thousands, except per share amounts)2008Research and development
    
    $
    4,198
    
    
    $
    1,639
    
    
    $
    1,108
    
    
    $
    874General and administrative
    
    $
    1,050
    
    
    $
    1,024
    
    
    $
    646
    
    
    $
    573Total expenses
    
    $
    5,248
    
    
    $
    2,663
    
    
    $
    1,754
    
    
    $
    1,447Other income (expense)
    
    $
    334
    
    
    $
    297
    
    
    $
    (213
    )
    
    $
    4Tax expense (recovery)
    
    $
    41
    
    
    $
    (2,515
    )
    
    $
    201
    
    
    $
    214Redeemable preferred share accretion
    
    $
    
    
    
    $
    417
    
    
    $
    780
    
    
    $
    776Extraordinary gain
    
    $
    
    
    
    $
    4,428
    
    
    $
    
    
    
    $
    Net loss (income) attributable to
common shareholders (loss)
    
    $
    4,955
    
    
    $
    (4,160
    )
    
    $
    2,949
    
    
    $
    2,433Net income (loss) per share*:Basic and diluted
    
    $
    (0.99
    )
    
    $
    2.02
    
    
    $
    (24.81
    )
    
    $
    (20.48
    )2007Research and development
    
    $
    1,060
    
    
    $
    1,094
    
    
    $
    862
    
    
    $
    1,119General and administrative
    
    $
    831
    
    
    $
    609
    
    
    $
    738
    
    
    $
    1,362Total expenses
    
    $
    1,891
    
    
    $
    1,703
    
    
    $
    1,600
    
    
    $
    2,481Other income (expense)
    
    $
    (192
    )
    
    $
    (27
    )
    
    $
    (69
    )
    
    $
    140Tax expense (recovery)
    
    $
    140
    
    
    $
    200
    
    
    $
    200
    
    
    $
    173Redeemable preferred share accretion
    
    $
    788
    
    
    $
    735
    
    
    $
    741
    
    
    $
    680Net loss (income) attributable to
common shareholders (loss)
    
    $
    3,011
    
    
    $
    2,665
    
    
    $
    2,610
    
    
    $
    3,194Net income (loss) per share*:Basic and diluted
    
    $
    (25.34
    )
    
    $
    (22.43
    )
    
    $
    (21.97
    )
    
    $
    (26.89
    )
 *
    
    Quarterly EPS may not add to annual figure due to rounding.  89




---



##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
       Managements Report on Internal Control over Financial Reporting
    90




---



##### Table of Contents



ITEM 9B. OTHER INFORMATION
   91




---



##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
  (a)
    
    
    (b)
    
    
    (c)Weighted-average
    
    
    Number of securities remainingNumber of securities to be
    
    
    exercise price of
    
    
    available for future issuanceissued upon exercise of
    
    
    outstanding
    
    
    under equity compensation plansoutstanding options, warrants
    
    
    options, warrants
    
    
    (excluding securities reflected inPlan category
    
    and rights
    
    
    and rights
    
    
    column (a)Equity compensation
plans approved by
security holders
    
    
    692,010
    (1)
    
    $
    4.97
    (1)
    
    
    170,911
    (1)Equity compensation
plans not approved by
security
holders(2)
    
    
    26,778
    
    
    
    2.69
    
    
    
    0Total
    
    
    723,143
    
    
    $
    4.88
    
    
    
    170,911
 (1)
    
    As at December 31, 2008, the Company maintained the following equity compensation
plans, which were adopted by Sonus prior to the Arrangement: (a) the Incentive Stock
Option, Nonqualified Stock Option and Restricted Stock Purchase Plan  1991 (1991
Plan), (b) the 1999 Nonqualified Stock Incentive Plan (1999 Plan), (c) the 2000
Stock Incentive Plan (2000 Plan), and (d) the 2007 Performance Incentive Plan (2007
Plan) (collectively referred to as the Sonus Plans). In connection with the
Arrangement, the Company assumed the OncoGenex Technologies Amended and Restated Stock
Option Plan (the OncoGenex Technologies Plan) and all of the issued and outstanding
options thereunder (the Assumed Options) pursuant to an assumption, amending and
confirmation agreement dated August 21, 2008 between the Company and OncoGenex
Technologies. The total option pool assumed under the OncoGenex Technologies Plan was
414,973 common shares, of which 376,778 common shares are issuable pursuant to Assumed
Options exercisable as of December 31, 2008 having a weighted-average exercise price of
$4.25. As of December 31, 2008, 3,330 common shares remain available for grant under the
OncoGenex Technologies Plan.(2)
    
    Our 1999 Nonqualified Stock Incentive Plan (the 1999 Plan) is a broad-based plan
for which shareholder approval was not required or obtained. On February 11, 2009, the
1999 Plan terminated in accordance with its terms. All stock options outstanding as of
such time will
continue in effect in accordance with their respective terms. Stock options granted under
the 1999 Plan were generally granted with an exercise price equal to fair market value on
the date of grant.  92




---



##### Table of Contents



ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  
 PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
   Report of Independent Registered Public Accounting Firm
    
    
    62Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    63Consolidated Statements of Loss for the years ended December 31, 2008, 2007, and 2006
    
    
    64Consolidated Statements of Stockholders Equity for the years ended December 31, 2008, 2007, and 2006
    
    
    65Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006
    
    
    66Notes to Consolidated Financial Statements
    
    
    67
    93




---



##### Table of Contents



ExhibitNumber
    
    Description2.1
    (1)
    
    Arrangement Agreement between the Company and OncoGenex Technologies Inc. dated May 27,
20082.2
    (2)
    
    First Amendment to Arrangement Agreement between the Company and OncoGenex Technologies
Inc. dated August 11, 20082.3
    (2)
    
    Second Amendment to Arrangement Agreement between the Company and OncoGenex
Technologies Inc. dated August 15, 20083.1
    (3)
    
    Amended and Restated Certificate of Incorporation (As Amended Through October 17, 1995)3.2
    (4)
    
    Certificate of Amendment to Certificate of Incorporation filed on May 6, 19993.3
    (5)
    
    Certificate
of Correction filed on March 9, 2009 to Certificate of Amendment filed on
May 6, 19993.4
    
    
    Certificate of Amendment to Certificate of Incorporation filed on May 7, 20043.5
    (5)
    
    Certificate
of Correction filed on March 9, 2009 to Certificate of Amendment filed on
May 7, 20043.6
    (2)
    
    Certificate of Amendment to Certificate of Incorporation filed on August 20, 20083.7
    (6)
    
    Third Amended and Restated Bylaws of Oncogenex Pharmaceuticals, Inc.4.1
    (2)
    
    Specimen Certificate of Common Stock4.2
    (7)
    
    Amended and Restated Rights Agreement dated as of July 24, 2002 between the Company and
U.S. Stock Transfer Corporation4.3
    (8)
    
    First Amendment to Amended and Restated Rights Agreement dated as of October 17, 2005
between the Company and U.S. Stock Transfer Corporation4.4
    (9)
    
    Second Amendment to Amended and Restated Rights Agreement dated as of August 10, 2006
between the Company and U.S. Stock Transfer Corporation4.5
    (10)
    
    Third Amendment to Amended and Restated Rights Agreement dated May 27, 2008 between the
Company and Computershare Trust Company, N.A.4.6
    (1)
    
    Form of Escrow Agreement between the Company, Computershare Trust Company of Canada and
former shareholders and debentureholders of OncoGenex Technologies Inc.4.7
    (1)
    
    Form of OncoGenex Voting Agreement4.8
    (1)
    
    Form of Sonus Voting Agreement10.1
    (11)
    
    Sonus Pharmaceuticals, Inc. Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan  1991 (the 1991 Plan), as amended10.2
    (11)
    
    Form of Incentive Option Agreement (pertaining to the 1991 Plan)10.3
    (11)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1991
Plan10.4
    (12)
    
    Sonus Pharmaceuticals, Inc. 1999 Nonqualified Stock Incentive Plan (the 1999 Plan)10.5
    (12)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1999
Plan10.6
    (12)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 1999
Plan10.7
    (13)
    
    Sonus Pharmaceuticals, Inc. 2000 Stock Incentive Plan (the 2000 Plan)10.8
    (14)
    
    First Amendment to Sonus Pharmaceuticals, Inc. 2000 Plan10.9
    (13)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2000 Plan)
  94




---



##### Table of Contents



ExhibitNumber
    
    Description10.10
    (15)
    
    Sonus Pharmaceuticals, Inc. 2007 Performance Incentive Plan (the 2007 Plan)10.11
    (16)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2007 Plan)10.12
    (16)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 2007
Plan10.13
    (17)
    
    OncoGenex Technologies Inc. Amended and Restated Stock Option Plan10.14
    (18)
    
    Stock Option Assumption, Amending and Confirmation Agreement dated as of August 21,
2008 between the Company and OncoGenex Technologies Inc.10.15
    (19)
    
    Sonus Pharmaceuticals, Inc. 2006 Employee Stock Purchase Plan10.16
    (20)
    
    Sonus Pharmaceuticals, Inc. Compensation Policy10.17
    (20)
    
    Sonus Pharmaceuticals, Inc. Executive Compensation Program10.18
    (11)
    
    Form of Indemnification Agreement for Officers and Directors of the Company10.19
    (17)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and each of Scott
Cormack, Stephen Anderson and Cindy Jacobs10.20
    (17)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and Neil
Clendeninn10.21
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and
Michael Martino10.22
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the
Company and Michael Martino10.23
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and
Alan Fuhrman10.24
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the
Company and Alan Fuhrman10.25
    (17)
    
    Employment Agreement between OncoGenex Technologies Inc. and Scott Cormack dated as of
December 21, 2001, and Employment Amending Agreement dated as of August 10, 200510.26
    (22)
    
    Employment Agreement between OncoGenex Technologies Inc. and Stephen Anderson dated as
of January 9, 2006*10.27
    (2)
    
    Employment Amending Agreement dated June 28, 2007 between OncoGenex Technologies Inc.
and Stephen Anderson10.28
    (22)
    
    Employment Agreement between OncoGenex, Inc. and Cindy Jacobs dated as of September 12,
2005*10.29
    (23)
    
    Securities Purchase Agreement dated as of August 15, 2005 by and among the Company and
the investors named therein, together with their permitted transferees (Securities
Purchase Agreement)10.30
    (23)
    
    Form of Purchase Warrant related to the Securities Purchase Agreement10.31
    (24)
    
    Form of Purchase Warrant issued to Schering AG10.32
    (23)
    
    Registration Rights Agreement dated as of August 15, 2005 by and among the Company and
the investors named therein10.33
    (25)
    
    Lease by and between BMR-217th Place LLC and the Company dated as of
November 21, 200610.34
    (26)
    
    First Amendment to Lease by and between BMR-217th Place LLC and the Company
dated as of August 17, 2007
  95




---



##### Table of Contents



ExhibitNumber
    
    Description10.35
    (27)
    
    Second Amendment to Lease by and between BMR-217th Place LLC and the Company
dated as of January 28, 200810.36
    
    
    Amended and Restated License Agreement effective as of July 2, 2008 by and between
OncoGenex Technologies Inc. and Isis Pharmaceuticals, Inc. (OGX-011)*10.37
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British
Columbia effective as of November 1, 2001, and Amending Agreement dated as of August
30, 2006 (OGX-011)*10.38
    (2)
    
    Second Amending Agreement and Consent as of August 7, 2008 between The University of
British Columbia and OncoGenex Technologies Inc. (OGX-011)10.39
    (22)
    
    Collaboration and License Agreement between OncoGenex Technologies Inc. and Isis
Pharmaceuticals, Inc. effective as of January 5, 2005 (OGX-427)*10.40
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British
Columbia effective as of April 5, 2005, and Amending Agreement dated as of August 30,
2006 (OGX-427)*10.41
    (2)
    
    Second Amending Agreement as of August 7, 2008 between The University of British
Columbia and OncoGenex Technologies Inc. (OGX-427)16.1
    (28)
    
    Letter from Ernst & Young LLP, Independent Registered Public Accounting Firm, to the
Securities and Exchange Commission dated August 26, 2008, regarding change in
certifying Accountant21.1
    
    
    Subsidiaries of the Registrant23.1
    
    
    Consent of Ernst & Young LLP31.1
    
    
    Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
    
    Schedules and similar attachments to the Arrangement Agreement have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. Registrant will furnish supplementally a copy of any omitted
schedule or similar attachment to the SEC upon request.*
    
    Confidential portions of this exhibit have been omitted and filed separately with the
Commission pursuant to an application for Confidential Treatment under Rule 24b-2 promulgated
under the Securities Exchange Act of 1934, as amended.(1)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on July 3,
2008.(2)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2008.(3)
    
    Incorporated by reference to the Companys Registration Statement on Form S-1, Reg. No.
33-96112.(4)
    
    Incorporated by reference to Companys Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999.(5)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on March 10,
2009.(6)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on October 30,
2008.(7)
    
    Incorporated by reference to the Companys amended Form 8-A filed on July 25, 2002.(8)
    
    Incorporated by reference to the Companys amended Form 8-A filed on October 18, 2005.(9)
    
    Incorporated by reference to the Companys amended Form 8-A filed on August 14, 2006.(10)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on May 30, 2008.(11)
    
    Incorporated by reference to the Companys registration statement on Form S-1, Reg. No.
33-96112.(12)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 1999.(13)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended June 30, 2000.(14)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2006.(15)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on April 3,
2007.(16)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2007.(17)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1 filed on December 13, 2006.(18)
    
    Incorporated by reference to the Companys registration statement on Form S-8 filed on August
26, 2008.(19)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on March 24,
2006.(20)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on December 15,
2006.(21)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on January 17,
2008.(22)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1, Amendment No. 1, filed on January 29, 2007.(23)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on August 18,
2005.(24)
    
    Incorporated by reference to the Schedule 13D filed by Schering Berlin Venture Corporation on
October 31, 2005.(25)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2006.(26)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2007.(27)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 2008.(28)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on August 27,
2008.  96




---



##### Table of Contents



SIGNATURES
  ONCOGENEX PHARMACEUTICALS, INC.
(Registrant)Date:  March 11, 2009
    By:
    /s/ SCOTT CORMACKScott CormackChief Executive Officer and President
(principal executive officer)  By:
    
    /s/ SCOTT CORMACK
    
    Chief Executive Officer, President and
Director (principal executive officer)
    
    Date: March 11, 2009Scott CormackBy:
    
    /s/ STEPHEN ANDERSON
    
    Chief Financial Officer and Secretary
(principal financial officer and
principal accounting officer)
    
    Date: March 11, 2009Stephen AndersonBy:
    
    /s/ MICHAEL MARTINO
    
    Director
    
    Date: March 11, 2009Michael MartinoBy:
    
    /s/ MICHELLE BURRIS
    
    Director
    
    Date: March 11, 2009Michelle BurrisBy:
    
    /s/ DWIGHT WINSTEAD
    
    Director
    
    Date: March 11, 2009Dwight WinsteadBy:
    
    /s/ PAT BRADY
    
    Director
    
    Date: March 11, 2009Pat BradyBy:
    
    /s/ NEIL CLENDENINN
    
    Director
    
    Date: March 11, 2009Neil Clendeninn
  97




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description2.1
    (1)
    
    Arrangement Agreement between the Company and OncoGenex Technologies Inc. dated May 27,
20082.2
    (2)
    
    First Amendment to Arrangement Agreement between the Company and OncoGenex Technologies
Inc. dated August 11, 20082.3
    (2)
    
    Second Amendment to Arrangement Agreement between the Company and OncoGenex
Technologies Inc. dated August 15, 20083.1
    (3)
    
    Amended and Restated Certificate of Incorporation (As Amended Through October 17, 1995)3.2
    (4)
    
    Certificate of Amendment to Certificate of Incorporation filed on May 6, 19993.3
    (5)
    

Certificate
of Correction filed on March 9, 2009 to Certificate of Amendment filed on
May 6, 19993.4
    
    
    Certificate of Amendment to Certificate of Incorporation filed on May 7, 20043.5
    (5)
    
    Certificate
of Correction filed on March 9, 2009 to Certificate of Amendment filed on
May 7, 20043.6
    (2)
    
    Certificate of Amendment to Certificate of Incorporation filed on August 20, 20083.7
    (6)
    
    Third Amended and Restated Bylaws of Oncogenex Pharmaceuticals, Inc.4.1
    (2)
    
    Specimen Certificate of Common Stock4.2
    (7)
    
    Amended and Restated Rights Agreement dated as of July 24, 2002 between the Company and
U.S. Stock Transfer Corporation4.3
    (8)
    
    First Amendment to Amended and Restated Rights Agreement dated as of October 17, 2005
between the Company and U.S. Stock Transfer Corporation4.4
    (9)
    
    Second Amendment to Amended and Restated Rights Agreement dated as of August 10, 2006
between the Company and U.S. Stock Transfer Corporation4.5
    (10)
    
    Third Amendment to Amended and Restated Rights Agreement dated May 27, 2008 between the
Company and Computershare Trust Company, N.A.4.6
    (1)
    
    Form of Escrow Agreement between the Company, Computershare Trust Company of Canada and
former shareholders and debentureholders of OncoGenex Technologies Inc.4.7
    (1)
    
    Form of OncoGenex Voting Agreement4.8
    (1)
    
    Form of Sonus Voting Agreement10.1
    (11)
    
    Sonus Pharmaceuticals, Inc. Incentive Stock Option, Nonqualified Stock Option and
Restricted Stock Purchase Plan  1991 (the 1991 Plan), as amended10.2
    (11)
    
    Form of Incentive Option Agreement (pertaining to the 1991 Plan)10.3
    (11)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1991
Plan10.4
    (12)
    
    Sonus Pharmaceuticals, Inc. 1999 Nonqualified Stock Incentive Plan (the 1999 Plan)10.5
    (12)
    
    Form of Sonus Pharmaceuticals, Inc. Nonqualified Stock Option Agreement under the 1999
Plan10.6
    (12)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 1999
Plan10.7
    (13)
    
    Sonus Pharmaceuticals, Inc. 2000 Stock Incentive Plan (the 2000 Plan)10.8
    (14)
    
    First Amendment to Sonus Pharmaceuticals, Inc. 2000 Plan10.9
    (13)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2000 Plan)
  98




---



##### Table of Contents



ExhibitNumber
    
    Description10.10
    (15)
    
    Sonus Pharmaceuticals, Inc. 2007 Performance Incentive Plan (the 2007 Plan)10.11
    (16)
    
    Form of Sonus Pharmaceuticals, Inc. Stock Option Agreement (pertaining to the 2007 Plan)10.12
    (16)
    
    Form of Sonus Pharmaceuticals, Inc. Restricted Stock Purchase Agreement under the 2007
Plan10.13
    (17)
    
    OncoGenex Technologies Inc. Amended and Restated Stock Option Plan10.14
    (18)
    
    Stock Option Assumption, Amending and Confirmation Agreement dated as of August 21,
2008 between the Company and OncoGenex Technologies Inc.10.15
    (19)
    
    Sonus Pharmaceuticals, Inc. 2006 Employee Stock Purchase Plan10.16
    (20)
    
    Sonus Pharmaceuticals, Inc. Compensation Policy10.17
    (20)
    
    Sonus Pharmaceuticals, Inc. Executive Compensation Program10.18
    (11)
    
    Form of Indemnification Agreement for Officers and Directors of the Company10.19
    (17)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and each of Scott
Cormack, Stephen Anderson and Cindy Jacobs10.20
    (17)
    
    Form of Indemnification Agreement between OncoGenex Technologies Inc. and Neil
Clendeninn10.21
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and
Michael Martino10.22
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the
Company and Michael Martino10.23
    (21)
    
    Severance/Change in Control Agreement dated January 11, 2008 between the Company and
Alan Fuhrman10.24
    (2)
    
    Executive Termination Agreement and General Release dated August 21, 2008 between the
Company and Alan Fuhrman10.25
    (17)
    
    Employment Agreement between OncoGenex Technologies Inc. and Scott Cormack dated as of
December 21, 2001, and Employment Amending Agreement dated as of August 10, 200510.26
    (22)
    
    Employment Agreement between OncoGenex Technologies Inc. and Stephen Anderson dated as
of January 9, 2006*10.27
    (2)
    
    Employment Amending Agreement dated June 28, 2007 between OncoGenex Technologies Inc.
and Stephen Anderson10.28
    (22)
    
    Employment Agreement between OncoGenex, Inc. and Cindy Jacobs dated as of September 12,
2005*10.29
    (23)
    
    Securities Purchase Agreement dated as of August 15, 2005 by and among the Company and
the investors named therein, together with their permitted transferees (Securities
Purchase Agreement)10.30
    (23)
    
    Form of Purchase Warrant related to the Securities Purchase Agreement10.31
    (24)
    
    Form of Purchase Warrant issued to Schering AG10.32
    (23)
    
    Registration Rights Agreement dated as of August 15, 2005 by and among the Company and
the investors named therein10.33
    (25)
    
    Lease by and between BMR-217th Place LLC and the Company dated as of
November 21, 200610.34
    (26)
    
    First Amendment to Lease by and between BMR-217th Place LLC and the Company
dated as of August 17, 2007
  99




---



##### Table of Contents



ExhibitNumber
    
    Description10.35
    (27)
    
    Second Amendment to Lease by and between BMR-217th Place LLC and the Company
dated as of January 28, 200810.36
    
    
    Amended and Restated License Agreement effective as of July 2, 2008 by and between
OncoGenex Technologies Inc. and Isis Pharmaceuticals, Inc. (OGX-011)*10.37
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British
Columbia effective as of November 1, 2001, and Amending Agreement dated as of August
30, 2006 (OGX-011)*10.38
    (2)
    
    Second Amending Agreement and Consent as of August 7, 2008 between The University of
British Columbia and OncoGenex Technologies Inc. (OGX-011)10.39
    (22)
    
    Collaboration and License Agreement between OncoGenex Technologies Inc. and Isis
Pharmaceuticals, Inc. effective as of January 5, 2005 (OGX-427)*10.40
    (22)
    
    License Agreement between OncoGenex Technologies Inc. and the University of British
Columbia effective as of April 5, 2005, and Amending Agreement dated as of August 30,
2006 (OGX-427)*10.41
    (2)
    
    Second Amending Agreement as of August 7, 2008 between The University of British
Columbia and OncoGenex Technologies Inc. (OGX-427)16.1
    (28)
    
    Letter from Ernst & Young LLP, Independent Registered Public Accounting Firm, to the
Securities and Exchange Commission dated August 26, 2008, regarding change in
certifying Accountant21.1
    
    
    Subsidiaries of the Registrant23.1
    
    
    Consent of Ernst & Young LLP31.1
    
    
    Certification of President and Chief Executive Officer pursuant to Rule 13a-14(a) or
15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of
the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification of President and Chief Executive Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 
    
    Schedules and similar attachments to the Arrangement Agreement have been omitted pursuant to
Item 601(b)(2) of Regulation S-K. Registrant will furnish supplementally a copy of any omitted
schedule or similar attachment to the SEC upon request.*
    
    Confidential portions of this exhibit have been omitted and filed separately with the
Commission pursuant to an application for Confidential Treatment under Rule 24b-2 promulgated
under the Securities Exchange Act of 1934, as amended.(1)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on July 3,
2008.(2)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2008.(3)
    
    Incorporated by reference to the Companys Registration Statement on Form S-1, Reg. No.
33-96112.(4)
    
    Incorporated by reference to Companys Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999.(5)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on March 10,
2009.(6)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on October 30,
2008.(7)
    
    Incorporated by reference to the Companys amended Form 8-A filed on July 25, 2002.(8)
    
    Incorporated by reference to the Companys amended Form 8-A filed on October 18, 2005.(9)
    
    Incorporated by reference to the Companys amended Form 8-A filed on August 14, 2006.(10)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on May 30, 2008.(11)
    
    Incorporated by reference to the Companys registration statement on Form S-1, Reg. No.
33-96112.(12)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 1999.(13)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended June 30, 2000.(14)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2006.(15)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on April 3,
2007.(16)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended September 30, 2007.(17)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1 filed on December 13, 2006.(18)
    
    Incorporated by reference to the Companys registration statement on Form S-8 filed on August
26, 2008.(19)
    
    Incorporated by reference to the Companys proxy statement on Schedule 14A filed on March 24,
2006.(20)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on December 15,
2006.(21)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on January 17,
2008.(22)
    
    Incorporated by reference to the OncoGenex Technologies Inc. registration statement on Form
F-1, Amendment No. 1, filed on January 29, 2007.(23)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on August 18,
2005.(24)
    
    Incorporated by reference to the Schedule 13D filed by Schering Berlin Venture Corporation on
October 31, 2005.(25)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2006.(26)
    
    Incorporated by reference to the Companys annual report on Form 10-K for the year ended
December 31, 2007.(27)
    
    Incorporated by reference to the Companys quarterly report on Form 10-Q for the quarter
ended March 31, 2008.(28)
    
    Incorporated by reference to the Companys current report on Form 8-K filed on August 27,
2008.  100