U.S.
      SECURITIES AND EXCHANGE COMMISSION


Washington,
      D.C. 20549









**FORM
      40-F**









(Check
      One)




o
            Registration
              statement pursuant to Section 12 of the Securities Exchange Act of
              1934orx
            Annual report pursuant to Section 13(a)
              or
              15(d) of the Securities Exchange Act of
              1934




For
      the fiscal year ended June 30, 2006




Commission
      file number 1-32186




**YM
      BIOSCIENCES INC.**





(Exact
      name of registrant as specified in its charter)




**Nova
                Scotia, Canada**
              (Province
                or other jurisdiction of incorporation or organization)
            **2836**
              (Primary
                Standard Industrial
              Classification
                Code Number (if applicable))
            **Not
                applicable**
              (I.R.S.
                Employer
              Identification
                Number (if Applicable))





**Suite
      400, Building 11, 5045 Orbitor Drive, Mississauga, Ontario, Canada L4W
      4Y4**


**(905)
      629-9761**





(Address
      and Telephone Number of Registrant’s Principal Executive Offices)




**DL
      Services Inc., 1420 Fifth Avenue, Suite 3400, Seattle, Washington
      98101**


**(206)
      903-5448**





(Name,
      Address (Including Zip Code) and Telephone Number


(Including
      Area Code) of Agent For Service in the United States)




Securities
      registered or to be registered pursuant to Section 12(b) of the
      Act.




**Title
                of each class**
              Common
                Shares
            **Name
                of each exchange on which registered**
              American
                Stock Exchange




Securities
      registered or to be registered pursuant to Section 12(g) of the Act.
      None




Securities
      for which there is a reporting obligation pursuant to Section 15(d) of the
      Act.
      None




For
      annual reports, indicate by check mark the information filed with this
      Form:




x
                Annual
                Information Form
            x
                Audited Annual
                Financial Statements




Indicate
      the number of outstanding shares of each of the issuer’s classes of capital or
      common stock as of the close of the period covered by the annual report:
      55,781,523




Indicate
      by check mark whether the registrant by filing the information contained in
      this
      Form is also thereby furnishing the information to the Commission pursuant
      to
      Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).
      If “Yes” is marked, indicate the file number assigned to the registrant in
      connection with such rule.




Yes
      o   No x




Indicate
      by check mark whether the registrant: (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
      (or for such shorter period that the registrant was required to file such
      reports); and (2) has been subject to such filing requirements for the past
      90
      days.




Yes x   No
      o

















**FORM
        40-F**
  **Principal
        Documents**
  The
        following documents, filed as Exhibits 99.1 through 99.3 hereto, are hereby
        incorporated by reference into this Annual Report on Form 40-F:
  (a)
              Annual
                  Information Form for the fiscal year ended June 30,
                  2006;
  (b)
              Management’s
                  Discussion and Analysis of Financial Condition and Results of Operations
                  for the fiscal year ended June 30, 2006;
                  and  (c)
              Consolidated Financial Statements for the fiscal
                year
                ended June 30, 2006 *(Note
                16 to the Consolidated Financial Statements relates to United States
                Accounting Principles and Reporting (U.S.
                GAAP)).*





40-F1





**ADDITIONAL
          DISCLOSURE**
  **Certifications
          and Disclosure Regarding Controls and Procedures.**
  (a)
                Certifications.
                    See Exhibits 99.4 and 99.5 to this Annual Report on Form
                    40-F.
  (b)
                Disclosure
                    Controls and Procedures.
                    As of the end of the registrant’s fiscal year ended June 30, 2006, an
                    evaluation of the effectiveness of the registrant’s “disclosure controls
                    and procedures” (as such term is defined in Rules 13a-15(e) and 15d-15(e)
                    of the Securities Exchange Act of 1934, as amended (the “Exchange Act”))
                    was carried out by the registrant’s principal executive officer and
                    principal financial officer. Based upon that evaluation, the
                    registrant’s
                    principal executive officer and principal financial officer have
                    concluded
                    that as of the end of that fiscal year, the registrant’s disclosure
                    controls and procedures are effective to ensure that information
                    required
                    to be disclosed by the registrant in reports that it files or
                    submits
                    under the Exchange Act is (i) recorded, processed, summarized
                    and reported
                    within the time periods specified in Securities and Exchange
                    Commission
                    rules and forms and (ii) accumulated and communicated to the
                    registrant’s
                    management, including its principal executive officer and principal
                    financial officer, to allow timely decisions regarding required
                    disclosure.
 
 It
          should be noted that while the registrant’s principal executive officer and
          principal financial officer believe that the registrant’s disclosure controls
          and procedures provide a reasonable level of assurance that they are effective,
          they do not expect that the registrant’s disclosure controls and procedures or
          internal control over financial reporting will prevent all errors and fraud.
          A
          control system, no matter how well conceived or operated, can provide only
          reasonable, not absolute, assurance that the objectives of the control
          system
          are met.
 
 (c)
                Changes
                    in Internal Control Over Financial Reporting.
                    During the fiscal year ended June 30, 2006, there were no changes
                    in the
                    registrant’s internal control over financial reporting that have
                    materially affected, or are reasonably likely to materially affect,
                    the
                    registrant’s internal control over financial reporting.
 
 **Notices
          Pursuant to Regulation BTR.**
 
 None.
 
 **Audit
          Committee Financial Expert.**
 
 The
          registrant’s board of directors has determined that Tryon Williams, a member of
          the registrant’s audit committee, qualifies as an “audit committee financial
          expert” (as such term is defined in Form 40-F). Mr. Williams is independent
          within the meaning of Section 10A(m)(3) of the Exchange Act.
 
  
  **Code
          of Ethics** .
 
 On
          October 19, 2004, the registrant adopted a “code of ethics” (as that term is
          defined in Form 40-F) that applies to its principal executive officer,
          principal
          financial officer, principal accounting officer or controller, and persons
          performing similar functions (the “Ethics Code”). The Ethics Code was filed as
          Exhibit 99.9 to the registrant’s Annual Report on Form 40-F for the fiscal year
          ended June 30, 2004. In addition, the registrant undertakes to provide
          to any
          person, without charge, upon request, a copy of the Ethics Code. Requests
          for
          such copies should be directed, either orally or in writing, to Secretary,
          Suite
          400, Building 11, 5045 Orbitor Drive, Mississauga, Ontario, Canada, L4W
          4Y4,
          phone number (905)629-9761.
  Since
          the adoption of the Ethics Code, there have not been any amendments to
          the
          Ethics Code or waivers, including implicit waivers, from any provision
          of the
          Ethics Code.
  **Principal
          Accountant Fees and Services.**
 During
            the years ended June 30, 2005 and 2006, we were billed the following
            fees by our
            external auditors, KPMG LLP:
 **Fees
                    Billed****Service**
                
                
                **2006**
                
                
                **2005**Audit
                    Fees
                
                $
                420,000
                
                $
                435,000Audit
                    Related Fees
                
                
                Nil
                
                
                NilTax
                    Fees
                
                $
                50,600
                
                $
                25,000All
                    Other Fees
                
                
                Nil
                
                
                Nil**Total
                    Fees Billed**
                
                **$**
                **470,600**
                
                **$**
                **460,000**
 
 Audit
          fees consist of fees for the audit of the registrant's annual financial
          statements or services that are normally provided in connection with statutory
          and regulatory filings or engagements.
  Tax
          fees consist of fees for tax compliance services and tax advisory
          services.  None
            of
            the services provided by KPMG during the years ended June 30, 2005 and
            2006 were
            provided pursuant to a de minimis exemption from the SEC's pre-approval
            rules.
  **Pre-Approval
          Policies and Procedures.**
  The
          audit committee of the registrant’s board of directors has adopted a policy
          regarding the provision of services by the registrant’s external auditors,
          currently KPMG LLP. This policy requires audit committee pre-approval of
          all
          permitted audit, audit-related and non-audit services.
  Under
          the policy, all permitted services to be provided by KPMG LLP must be
          pre-approved by the audit committee or a designated member of the audit
          committee. Any pre-approval granted by a designated member must be reported
          to
          the audit committee at its next scheduled meeting. The pre-approval of
          services
          may be given at any time up to one year before commencement of the specified
          service.
   
  Of
          the fees reported under “Principal Accountant Fees and Services” above, none of
          the fees billed by KPMG LLP were approved by the audit committee of the
          board of
          directors of the registrant pursuant to the de minimis exception provided
          by
          Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
  **Off-Balance
          Sheet Arrangements.**
  The
          registrant has certain arrangements with its subsidiaries that have an
          effect or
          may have a future effect on the registrant’s financial condition, revenues or
          expenses, results of operations, liquidity, capital expenditures or capital
          resources in that there is no assurance that funds advanced to its subsidiaries
          will be reimbursed. The arrangements are described in notes 2, 9, and 17
          of the
          Consolidated Financial Statements filed as part of this Annual Report on
          Form
          40-F. The registrant makes provision for any advances to the joint ventures
          that
          do not eliminate on consolidation such that the registrant has recorded
          100% of
          the results of operations and cash flows of these entities.
  **Tabular
          Disclosure of Contractual Obligations.**
  Contractual
                    Obligations
                
                Total
                
                Less
                    Than 1 Year
                
                1-3
                    Years
                
                3-5
                    Years
                
                Mores
                    Than 5 YearsOperating
                    Leases (January, 31 2011)
                
                $
                1,283,592
                
                $
                500,057
                
                $
                496,160
                
                $
                235,125
                
                $
                52,250
 
 **Identification
          of the Audit Committee.**
  The
          registrant has a separately-designated standing audit committee established
          in
          accordance with section 3(a)(58)(A) of the Exchange Act. The members of
          the
          audit committee are: Thomas I. A. Allen, Dr. Henry Friesen and Tryon M.
          Williams.
   
  **UNDERTAKING
          AND CONSENT TO SERVICE OF PROCESS**
  **A.** **Undertaking.**
  The
          registrant undertakes to make available, in person or by telephone,
          representatives to respond to inquiries made by the Securities and Exchange
          Commission (the “Commission”) staff, and to furnish promptly, when requested to
          do so by the Commission staff, information relating to: the securities
          registered pursuant to Form 40-F; the securities in relation to which the
          obligation to file an annual report on Form 40-F arises; or transactions
          in said
          securities.
  **B.**
                **Consent
                    to Service of Process.**
  The
          Company has filed a Form F-X, as amended, in connection with the class
          of
          securities in relation to which the obligation to file this report
          arises.
  Any
          change to the name or
          address of the agent for service of process of the registrant shall be
          communicated promptly to the Securities and Exchange Commission by an amendment
          to the Form F-X referencing the file number of the relevant registration
          statement.
 **SIGNATURES**
  Pursuant
        to the requirements of the Exchange Act, the registrant certifies that it
        meets
        all of the requirements for filing on Form 40-F and has duly caused this
        annual
        report to be signed on its behalf by the undersigned, thereunto duly authorized,
        on September 21, 2006.
  **YM
                BioSciences Inc.**/s/
                Leonard
                VernonLeonard VernonVice President, Finance
                and
                Administration
      
  
 **EXHIBIT
        INDEX**
 
 Exhibit
              
              Description99.1
              
              Annual
                  Information Form for the fiscal year ended June 30,
                  200699.2
              
              Management’s
                  Discussion and Analysis of Financial Condition and Results of Operations
                  for the fiscal year ended June 30, 200699.3
              
              Consolidated
                  Financial Statements for the fiscal year ended June 30,
                  200699.4
              
              Certification
                  of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14
                  of the
                  Securities Exchange Act of 193499.5
              
              Certification
                  of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14
                  of the
                  Securities Exchange Act of 193499.6
              
              Section
                  1350 Certification of Chief Executive Officer99.7
              
              Section
                  1350 Certification of Chief Financial Officer99.8
              
              Consent
                  of KPMG LLP