# Form 20F

|[_] | Registration
Statement pursuant to section 12(b) or (g) of the Securities           Exchange Act of
1934
|--- | --------------------------------------------------------------------------------------------------------

or

|[X] | Annual
Report pursuant to section 13 or 15(d) of the Securities Exchange Act of
               1934 For the fiscal year ended December 31, 2004
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or

|[_] | Transition
Report pursuant to section 13 or 15(d) of the Securities Exchange Act                of
1934 For the transition period from to
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

Commission File Number:
001-12033

NYMOX PHARMACEUTICAL
CORPORATION(Exact name of registrant as specified in its charter)

Canada  (Jurisdiction
of incorporation or organization)

9900 Cavendish Blvd.,
Suite 306St. Laurent, Quebec, Canada, H4M 2V2  (Address of principal executive offices)

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

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|None                | Not Applicable                           

Securities registered or to be registered
pursuant to section 12(g) of the Act

Common Stock

Securities registered or to be
registered pursuant to section 15(d) of the Act

None

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.

25,504,062 shares as of
December 31, 2004

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 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 [  ]
|------- | -------

Indicate by check mark which
financial statement item the registrant has elected to follow.

|Item 17 [X] | Item 18  [  ]
|----------- | -------------

1

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In this annual report, the term
Nymox refers to both Nymox Pharmaceutical Corporation and its subsidiaries,
Nymox Corporation and Serex Inc., and, where applicable, a predecessor private
corporation, DMS Pharmaceuticals Inc. Unless otherwise indicated all dollar amounts
are in United States Dollars.

# CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

You should be aware that this report
contains forward-looking statements about, among other things, the anticipated operations,
product development, financial condition and operating results of Nymox, proposed clinical
trials and proposed transactions, including collaboration agreements.

By forward-looking statements, we
mean any statements that are not statements of historical fact, including (but not limited
to) statements preceded by or that include the words, believes,
expects, anticipates, hopes, targets or
similar expressions.

In connection with the safe
harbor provisions in the Private Securities Litigation Reform Act of 1995, we are
including this cautionary statement to identify some of the important factors that could
cause Nymoxs actual results or plans to differ materially from those projected in
forward-looking statements made by, or on behalf of, Nymox. These factors, many of which
are beyond the control of Nymox, include Nymoxs ability to:

| |  | identify
and capitalize on possible collaboration, strategic partnering or divestiture
opportunities,
| | - | -----------------------------------------------------------------------------------------------------

| |  | obtain
suitable financing to support its operations and clinical trials,
| | - | ------------------------------------------------------------------------

| |  | manage
its growth and the commercialization of its products,
| | - | ------------------------------------------------------------

| |  | achieve
operating efficiencies as it progresses from a development-stage to a later-stage
biotechnology company,
| | - | ----------------------------------------------------------------------------------------------------------------

| |  | successfully
compete in its markets,
| | - | ------------------------------------

| |  | realize
the results it anticipates from the clinical trials of its products,
| | - | ----------------------------------------------------------------------------

| |  | succeed
 in finding  and  retaining  joint  venture  and  collaboration  partners  to assist it
in the  successful  marketing,                   distribution and commercialization of
its products,
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | achieve
regulatory clearances for its products,
| | - | -----------------------------------------------

| |  | obtain
on commercially reasonable terms adequate product liability insurance for its
commercialized products,
| | - | -------------------------------------------------------------------------------------------------------------

| |  | adequately
 protect its  proprietary  information  and  technology  from  competitors  and avoid
 infringement  of proprietary                   information and technology of its
competitors,
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | assure
that its products,  if  successfully  developed and  commercialized  following
 regulatory  approval,  are not rendered                   obsolete by products or
technologies of competitors and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | not
encounter problems with third parties, including key personnel, upon whom it is dependent.
| | - | ----------------------------------------------------------------------------------------------

Although Nymox believes that the
forward-looking statements contained in this annual report are reasonable, it cannot
ensure that its expectations will be met. These statements involve risks and
uncertainties. Actual results may differ materially from those expressed or implied in
these statements. Factors that could cause such differences include, but are not limited
to, those discussed under Risk Factors.

2

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# PART I

# ITEM 1. IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not Applicable

# ITEM 2. OFFER STATISTICS
AND EXPECTED TIMETABLE

Not Applicable

# ITEM 3. KEY INFORMATION

# Selected Financial Data

The following table sets forth
selected consolidated financial data for Nymox for the periods indicated, derived from
financial statements prepared in accordance with generally accepted accounting principles
(GAAP). We prepare our basic financial statements in accordance with Canadian
GAAP and include, as a note to the statements, a reconciliation of material differences to
United States GAAP. The financial statements have been audited by KPMG LLP, Montreal,
Canada as at and for the years ended December 31, 2000, 2001, 2002, 2003 and 2004. The
data set forth below should be read in conjunction with the Companys consolidated
financial statements and notes thereto.

NYMOX PHARMACEUTICAL
CORPORATION Selected Consolidated
Financial Data(In U.S. dollars (1))

|                               
|-------------------------------
|CANADIAN GAAP                  
|Current Assets                 
|Property & Equipment           
|Patents & Intellectual Property
|Total Assets                   
|Total Liabilities              
|Share Capital                  
|Shareholder's Equity           
|Total Revenues                 
|Sales                          
|Research & Development         
|Expenditures(2)                
|Net Loss                       
|Loss per Share (basic &        
|diluted)                       
|Weighted Avg. No. of Common    
|Shares                         
|U.S. GAAP(3)                   
|Net Loss                       
|Loss per Share                 
|Shareholder's Equity           

|(1) | Effective
January 1, 2000, the Corporation adopted the United States dollar as                its
measurement currency as a result of the increasing proportion of operating,
               financing and investing transactions in the Canadian operations that are
               denominated in U.S. dollars. Reference is made to note 2(g) of the
consolidated                financial statements.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

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| | (2) | We
earn investment tax credits by making qualifying research and development
               expenditures. These amounts shown are net of investment tax credits.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Reference
is made to Note 12 of Nymoxs audited financial statements as at                and
for the year ended December 31, 2004 for a reconciliation of differences
               between Canadian and U.S. GAAP.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Risk Factors

The following risk factors apply to
Nymox and our industry.

# It is Uncertain When, if
Ever, We Will Make a Profit

We first began operations in 1995 and
are only in the early stages of commercial marketing of our diagnostic products,
AlzheimAlert, NicAlert and TobacAlert. We have never made a profit. We
incurred a net loss of $4.0 million in 2000, $3.0 million in 2001, $3.4 million in 2002,
$4.3 million in 2003, and $3.7 million in 2004. As of December 31, 2004, Nymoxs
accumulated deficit was $36.0 million.

We cannot say when, if ever, Nymox
will become profitable. Profitability will depend on our uncertain ability to generate
revenues from the sale of our products and the licensing of our technology that will
offset the significant expenditures required for us to advance our research, protect and
extend our intellectual property and develop, manufacture, license, market, distribute and
sell our technology and products successfully. Similar types of expenditures in the past
have helped produce the net losses reported above.

# We May Not Be Able to
Raise Enough Capital to Develop and Market Our Products

Nymox has funded its operations
primarily by selling shares of its common stock. Since late 1998, a small portion of the
funds came from sales. However, sales have not been, and may not be in the foreseeable
future, sufficient to meet our anticipated financial requirements.

We will continue to need to raise
substantial amounts of capital for our business activities including our research and
development programs, the conduct of clinical trials needed to obtain regulatory approvals
and the marketing and sales of our products. We anticipate being able to fund our current
total annual budgeted expenditures of approximately $4 million per year over the next
year through our current cash position and additional financing, including draw downs
through our common stock private purchase agreement with Lorros-Greyse Investments, Inc.
Clinical trials will substantially increase cash requirements. We anticipate being able to
meet these requirements as they arise. We plan to raise capital either through a new round
of financing and/or through partnering with a major pharmaceutical company. Additional
financing may not be available when needed, or, if available, may not be available on
acceptable terms. If adequate funds on acceptable terms are not available, we may have to
curtail or eliminate expenditures for research and development, testing, clinical trials,
promotion and marketing for some or all of our products.

# We Face Challenges in
Developing, Manufacturing and Improving Our Products

Our success depends on our ability to
develop or acquire rights to new products or to improve our existing products. We are
still developing many of our products and have not yet brought them to market. We cannot
assure you that we will be able to develop or acquire rights to such products and to
market them successfully.

4

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Developing a treatment for
Alzheimers disease is particularly challenging. Many pharmaceutical companies,
institutions and researchers are working on many different approaches and treatments.
There is no consensus among researchers about the cause of this fatal illness and no
guarantee that our drug development programs in this area are targeting significant
factors in its cause, progression or symptoms. It is difficult to design drug candidates
that can cross from the bloodstream into the brain, where the damage from Alzheimers
disease is occurring. Clinical trials to establish efficacy for drugs that slow down the
progression of Alzheimers disease over a period of months or years often require
that a large number of subjects be tracked over many months or years, making them very
expensive to conduct. The potentially long period from discovery and patenting through
development and regulatory approval to the market can significantly reduce the patent life
of an Alzheimers disease treatment. Any marketed treatment in this area may well
eventually face competition from me-too drugs developed by other
pharmaceutical companies based on our research. We will be under constant competitive
pressure to improve our products and to develop new treatments in order to protect our
position in the field.

Developing and improving our
diagnostic products is also challenging. The science and technology of the detection and
measurement of very small amounts of biochemicals in bodily fluids and tissue is evolving
rapidly. We may need to make significant expenditures in research and development costs
and licensing fees in order to take advantage of new technologies. If any major changes to
our testing technologies used in our AlzheimAlert and NicAlert and
TobacAlert tests are made, further validation studies will be required. Developing
new diagnostic products is more challenging, requiring identification and validation of
the biochemical marker being detected by the new product in the clinical context and the
development and validation of the product designed to detect the marker.

We anticipate outsourcing at least
some of the manufacturing required for new products we may develop in order to control
start-up and operating costs and to take advantage of the existing manufacturing
capabilities and capacity in the large contract manufacturing sectors in the
pharmaceutical and diagnostic industries. There are risks associated with this strategy,
including difficulties in the transfer of manufacturing, the possibility of production
interruption due to causes beyond our control and the need to arrange alternative
suppliers. We currently out-source some of the manufacturing services required for our
NicAlert and TobacAlert products to a contract manufacturer. We do not
anticipate any significant risk of long-term interruption of manufacture due to this
arrangement. The services supplied are not unique or unduly complicated and other contract
manufacturers are available to provide similar services. The manufacture of therapeutics
is more challenging and capital-intensive and may require us to partner with a major
pharmaceutical company or other partner in order to manufacture a therapeutic for market.

# We Face Significant and
Growing Competition

The modern pharmaceutical and
biotechnology industries are intensely competitive, particularly in the field of
Alzheimers disease where there is a large unmet need for an effective treatment.
Currently there are five drugs with similar mechanisms of action approved for sale in the
United States (Aricept®, Cognex®, Exelon®, Reminyl® and Namenda).
These drugs offer some relatively short-term symptomatic relief, but do not treat the
underlying causes of the illness. Over the past decade, there has been an intense research
effort both in the non-profit sectors such as universities, government agencies and
research institutes and in the pharmaceutical and biotechnology industry to develop new
treatments for Alzheimers disease. Treatment candidates under development include:

| |  | vaccines
for Alzheimer's disease;
| | - | ---------------------------------

| |  | enzyme-blocking
therapies intended to block the production of the protein found in the senile plaques
characteristic of Alzheimers disease. A number of pharmaceutical and biotechnology
companies including Amgen, Elan and Bristol-Myers Squibb are working on such therapies.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | drugs
aimed at reducing, blocking or clearing the aggregation or accumulation of the protein
found in senile plaques. A number of pharmaceutical and biotechnology companies including
Neurochem, Praecis Pharmaceuticals and Prana Biotechnology are working on such therapies.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

5

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| |  | memory
enhancing compounds from Cortex Pharmaceuticals, Memory Pharmaceuticals, Helicon
Therapeutics and Sention, among others.
| | - | -------------------------------------------------------------------------------------------------------------------------------

| |  | drugs
aimed at inhibiting an enzyme that breaks down an important neurotransmitter involved in
memory and cognition. A number of pharmaceutical and biotechnology companies including
Axonyx are working on such therapies.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | implantation
of a shunt (COGNIShunt) developed by its maker, Eunoe Inc., and designed to drain
cerebrospinal fluid from the patients skull into his or her abdominal cavity.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There is also ongoing research into
possible methods of preventing Alzheimers disease such as taking certain
cholesterol-lowering drugs called statins, estrogen replacement therapies, anti-oxidants
such as vitamin E and ginkgo biloba or anti-inflammatory drugs such as ibuprofen
(e.g., Advil or Motrin). The successful development of a treatment or method of
preventing Alzheimers disease could significantly impact on our ability to develop
or market a competing treatment for Alzheimers disease.

Our treatments under development for
enlarged prostate (benign prostatic hyperplasia or BPH) face significant competition from
existing products. There are seven drugs approved for treatment of BPH: finasteride
(Proscar®), dutasteride (Avodart®), terazozin (Hytrin®), doxazozin
(Cardura®), tamsulosin (Flomax®), prazosin (Minipres®) and alfusozin
(Uroxatral®). There are a number of thermal treatments on the market designed to
shrink the enlarged prostate by heating its tissue with a device inserted through the
urethra (the tube leading from the bladder through the penis through which men urinate) or
through the abdomen. The devices on the market use microwave energy (Prostatron®,
Targis Therapy® or TherMatrx®), low level radiowaves (TUNA System®), lasers
(Indigo LaserOptic Treatment System® or Laserscope GreenLight PVP), direct heat,
energy or hot water to heat or burn away prostate tissue. A variety of surgical procedures
exist to surgically reduce or remove the prostate or to widen the urethra. These include
procedures to cut away prostate tissue such as TURP (transurethral resection of the
prostate) and using a resectoscope with an electrical loop inserted through the penis to
cut the prostate tissue. A small device used to widen the constricted urethra called a
prostatic stent can also be inserted.

The diagnostic testing industry is
also highly competitive. In the area of Alzheimers disease, Athena Diagnostics, Inc.
markets diagnostic tests for different biochemical indicators found in blood and spinal
fluid and for genetic predispositions for the illness. Other companies are attempting to
develop and market other diagnostic products in this area. The introduction of other
diagnostics products for Alzheimers disease or tobacco product use that are cheaper,
easier to perform, more accurate or otherwise more attractive to the physicians, health
care payers or other potential customers would have a significant impact on the sales of
our AlzheimAlert, NicAlert or TobacAlert products.

# We May Not Be Able to
Successfully Market Our Products

To increase our marketing,
distribution and sales capabilities both in the United States and around the world, we
will need to enter into licensing arrangements, contract sales agreements and co-marketing
deals. We cannot assure you that we will be able to enter into agreements with other
companies on terms acceptable to us, that any licensing arrangement will generate any
revenue for the company or that the costs of engaging and retaining the services of a
contract sales organization will not exceed the revenues generated.

# Our Products and
Services May Not Receive Necessary Regulatory Approvals

Our diagnostic products,
AlzheimAlert, NicAlert and TobacAlert, and our products in development,
are subject to a wide range of government regulation governing laboratory standards,
product safety and efficacy. The actual regulatory schemes in place vary from country to
country and regulatory compliance can take several years and involve substantial
expenditures.

6

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We cannot be sure that we can obtain
necessary regulatory approvals on a timely basis, if at all, for our products in
development and all of the following could have a material adverse effect on our business:

| |  | failure
to obtain or significant delays in obtaining requisite approvals;
| | - | -------------------------------------------------------------------------

| |  | loss
of or changes to previously obtained approvals; and
| | - | --------------------------------------------------------

| |  | failure
to comply with existing or future regulatory requirements.
| | - | ------------------------------------------------------------------

We currently market
AlzheimAlert as a clinical reference laboratory service provided by our
government-inspected clinical reference laboratory in New Jersey. Physicians send us urine
samples from their patients to our laboratory where the AlzheimAlert test is
performed and the results reported back to the physicians. A clinical laboratory test like
AlzheimAlert does not require approval from the United States Food and Drug
Administration (FDA). Our laboratory is regulated by the Centers for
Medicare & Medicaid Services (CMS) under the Clinical Laboratory Improvement
Amendments and is subject to inspection and certification. In addition, individual states
like New York and Florida have their own requirements for reference laboratories like ours
that offer diagnostic services. In addition, the FDA has its own regulations governing in
vitro diagnostic products, including some of the reagents used in clinical reference
laboratories. Any changes in CMS or state law requirements or in the FDA regulations could
have a detrimental impact on our ability to offer or market any reference laboratory
services and/or on our ability to obtain reimbursement from the Medicare and Medicaid
programs and providers.

We have developed a diagnostic kit
based on AlzheimAlert for sale to third parties. We will require prior approval from
the FDA before we can market, distribute or sell this product in the United States. In
February 2004, we filed a premarket approval application (PMA) with the FDA for the
AlzheimAlert kit version following the completion of clinical testing. In July 2004,
we received a letter from the FDA raising issues of clinical study methodology and stating
that the PMA was not approvable in its current form. We subsequently met with the FDA and
submitted further data and analyses in October and December 2004 and March and April 2005.
The FDA has informed us that our PMA will be going forward to a presentation before a
panel of the Medical Devices Advisory Committee with the date for the panel meeting to be
confirmed in due course. Advisory panels provide the FDA with recommendations about the
safety and effectiveness of medical devices. The FDA will not make a decision about our
application until after the panel meeting. The FDA considers the panels
recommendations but is not bound by them when making its final decision about whether to
approve our PMA. We cannot predict with any certainty when or if such approval will be
forthcoming and it is possible that the FDA may require more clinical testing or further
documentation before approval. If approved, the diagnostic kit would then be subject to
postmarketing record and reporting obligations and manufacturing requirements.

Similar requirements exist in many
other countries. Obtaining these approvals and complying with the subsequent regulatory
requirements can be both time-consuming and expensive. In November 2004, Nymox
satisfactorily completed the testing and registration required by European regulatory,
environmental and quality standards in order to obtain a CE Mark for the
AlzheimAlert kit. The CE Mark makes the AlzheimAlert kit eligible for sale in
the European Union and will allow European clinical and hospital laboratories to perform
the AlzheimAlert test in their own facilities in Europe.

We currently sell NicAlert and
TobacAlert as tests for tobacco product use and exposure and for research use. In
October, 2002, we received 510(k) clearance from the U.S. Food and Drug Administration for
our NicAlert product for medical uses.

7

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In the United States, our drugs in
development will require final FDA approval before their sale or distribution. Such
approval comes only at the end of a lengthy, expensive and often arduous process. We have
not submitted any drugs for final FDA approval. In 2003, we successfully completed the
first two Phase 1 and Phase 1-2 U.S. clinical trials for NX-1207, our investigational new
drug treatment for benign prostatic hyperplasia (BPH). We are commencing a pivotal Phase 2
clinical trial. We cannot predict with any certainty the outcome of this trial, what
further steps may be required in order to apply for final FDA approval for this drug or
whether the FDA will ultimately grant us such approval. Similar requirements exist in many
other countries.

# Protecting Our Patents
and Proprietary Information is Costly and Difficult

We believe that patent and trade
secret protection is important to our business, and that our success will depend, in part,
on our ability to obtain strong patents, to maintain trade secret protection and to
operate without infringing the proprietary rights of others.

Obtaining and maintaining our patent
position is costly. We pay for the filing, prosecution and fees of over 200 patents
and patent applications in countries around the world, including the United States,
Europe, Japan, Canada, Australia, New Zealand and South Korea. In the United States alone,
Nymox has fifteen patents issued or allowed and fourteen patent applications pending
relating to its technology. Its subsidiary, Serex, Inc. has ten patents issued and
allowed. Through licensing agreements with the Massachusetts General Hospital, Nymox
separately licensed global patent rights relating to neural thread proteins and to novel
cancer markers that have potential application both for the treatment and diagnosis of
specific cancers. These licensed patent rights include five issued United States patents
and numerous patents and patent applications in other countries around the world.

We believe that we have strong patent
protection for the products we sell and for our product development programs and are in
the process of extending that patent protection to cover more countries or new discoveries
or products. We cannot assure you that additional patents covering new products or
improvements will be issued or that any new or existing patents will be of commercial
benefit or be valid and enforceable if challenged.

We are not currently involved in
patent litigation. In the pharmaceutical and biotechnology industry patent disputes are
frequent and can preclude the commercialization of products. Patent litigation is costly
and the outcome often difficult to predict. It can expose us to significant liabilities to
third parties and may require us to obtain third-party licenses at a material cost or
cease using the technology or product in dispute.

# We Face Changing Market
Conditions

The healthcare industry is in
transition with a number of changes that affect the market for therapeutic and diagnostic
test products. The U.S. Federal and various state governments have under
consideration a number of proposals that may have the effect of directly or indirectly
limiting drug prices in the U.S. markets. Such changes may adversely affect the
prices we may charge for any therapeutic drug we develop. Funding changes and budgetary
considerations can lead major health care payers and providers to make changes in
reimbursement policies for our AlzheimAlert product. These changes can seriously
impact the potential for growth for the market for AlzheimAlert, either favorably
when the decision is to offer broad coverage for our test at a reasonable price or
negatively when the decision is to deny coverage altogether. Changes in the healthcare
delivery system have resulted in major consolidation among reference laboratories and in
the formation of multi-hospital alliances, reducing the number of institutional customers
for therapeutic and diagnostic test products. There can be no assurance that Nymox will be
able to enter into and/or sustain contractual or other marketing or distribution
arrangements on a satisfactory commercial basis with these institutional customers.

8

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# Health Care Plans May
Not Cover or Adequately Pay for our Products and Services

Throughout the developed world, both
public and private health care plans are under considerable financial and political
pressure to contain their costs. The two principal methods of restricting expenditures on
drugs and diagnostic products and services are to deny coverage or, if coverage is
granted, to limit reimbursement. For single-payer government health care systems, a
decision to deny coverage or to severely restrict reimbursement for one of our products
can have an adverse effect on our business and revenues.

In the United States, where, to a
significant degree, the patient population for our products is elderly, Medicare and
Medicaid are sources of reimbursement. In general, any restriction on reimbursement,
coverage or eligibility under either program could adversely affect reimbursement to Nymox
for products and services provided to beneficiaries of the Medicare and/or Medicaid
programs. Many elderly people are covered by a variety of private health care
organizations either operating private health care plans or Medicare or Medicaid programs
subject to government regulation. These organizations are also under considerable
financial constraints and we may not be able to secure coverage or adequate reimbursement
from these organizations. Without coverage, we will have to look to the patients
themselves who may be unwilling or unable to pay for the product; in turn, doctors may be
reluctant to order or prescribe our products in the absence of coverage of the product for
the patient.

# The Issuance of New
Shares May Dilute Nymoxs Stock

The issuance of further shares and
the eligibility of issued shares for sale will dilute our common stock and may lower its
share price. There were 26,078,628 common shares of Nymox issued and outstanding as of
June 22, 2005. All of these shares are eligible for sale under Rule 144 or are otherwise
freely tradable. In addition, 1,811,500 share options are outstanding, of which 1,771,500
are currently vested and 19,713 shares are subject to issuance upon exercise of warrants.
Expiry dates for Nymox options range from 8 months to 8 years (see note 7(e) to our
consolidated financial statements). These options have been granted to employees,
officers, directors and consultants of the company. Moreover, Nymox may use its shares as
currency in acquisitions.

# We Face Potential Losses
Due to Foreign Currency Exchange Risks

Nymox incurs certain expenses,
principally relating to salaries and operating expenses at its Canadian head office, in
Canadian dollars. All other expenses are derived in U.S. dollars. As a result, we are
exposed to the risk of losses due to fluctuations in the exchange rates between the
U.S. dollar and the Canadian dollar. We protect ourselves against this risk by
maintaining cash balances in both currencies. We do not currently engage in hedging
activities. We cannot say with any assurance that the Company will not suffer losses as a
result of unfavorable fluctuations in the exchange rates between the United States dollar
and Canadian dollar.

# We Have Never Paid a
Dividend and are Unlikely to do so in the Foreseeable Future

Nymox has never paid any dividends
and does not expect to do so in the foreseeable future. We expect to retain any earnings
or positive cash flow in order to finance and develop Nymoxs business.

# ITEM 4. INFORMATION ON
THE COMPANY

# History of the Company

Nymox was incorporated under the
Canada Business Corporations Act in May, 1995 to acquire all of the common shares of DMS
Pharmaceutical Inc., a private company which had been carrying on research and development
since 1989 on diagnostics and drugs for brain disorders and diseases of the aged with an
emphasis on Alzheimers disease. Nymox has two subsidiaries: one wholly owned
subsidiary named Nymox Corporation and the other a majority owned subsidiary named Serex,
Inc., purchased in March, 2000. Both subsidiaries are based in the same building in
Hasbrouck Heights, New Jersey. Nymox Corporation operates our certified clinical reference
laboratory where our AlzheimAlert test is performed, and conducts some research and
development, while Serex conducts research and development, and some of the manufacturing
for NicAlert and TobacAlert.

9

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Nymoxs principal executive
offices are located at:

| | Nymox
Pharmaceutical Corporation                         9900 Cavendish Boulevard, Suite 306
                        St. Laurent, Quebec, Canada, H4M 2V2                         Phone: (800)
936-9669                         Fax: (514) 332-2227
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Nymoxs registered agent in the
United States is:

| | CT
Corporation System                         208 South Lasalle St.                         Chicago, IL
60604
| | -------------------------------------------------------------------------------------------------------------

Nymoxs two subsidiaries are
located at:

| | Nymox
Corporation                         777 Terrace Avenue                         Hasbrouck Heights, NJ,
USA 07604
| | ---------------------------------------------------------------------------------------------------------------------

| | Serex,
Inc.                         777 Terrace Avenue                         Hasbrouck Heights, NJ, USA
07604
| | ---------------------------------------------------------------------------------------------------------------

We specialize in the research and
development of therapeutics and diagnostics for the aging population with an emphasis on
Alzheimers disease. Alzheimers disease is a progressive, terminal brain
disease of the elderly marked by an irreversible decline in mental abilities, including
memory and comprehension, and often accompanied by changes in behavior and personality. It
currently afflicts an estimated 4.5 million people in the United States and at least
fifteen million people worldwide. As the baby-boomer generation continues to age, these
figures are expected to rise sharply. Our subsidiary, Serex, Inc., specializes in the
development of diagnostic products for a wide range of indications based on its
proprietary patented diagnostic platforms and technologies.

# Acquisition of a
Majority Interest in Serex, Inc.

On March 2, 2000, we closed our
acquisition of a controlling interest in Serex, Inc., a privately held diagnostic company
based in New Jersey. We have subsequently acquired more shares of the common stock of
Serex, Inc. from other shareholders and now own approximately 99% of its common stock.

Serexs NicAlert and
TobacAlert strips can reliably detect one of the metabolic products of nicotine in
human urine, in order to determine whether a person, such as a teenager or insurance
applicant, is using or has been exposed to a tobacco product. NicAlert and
TobacAlert are currently being distributed by Nymox, CVS/pharmacy®,
Drugstore.com and Jant Pharmacal Corporation.

10

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Serex developed and patented its
particle valence technology, a unique, highly sensitive, new method to detect very small
amounts of biochemical indicators in body fluids such as blood, urine and saliva. This
technology can be adapted to detect a wide range of biochemical indicators for diseases,
conditions and drug use.

Serex also assisted in the
development of our AlzheimAlert test.

# Diagnostic Products for
Alzheimers Disease

Alzheimers disease is the most
common cause of dementia in persons 65 years of age and older and is the fourth leading
cause of death among the elderly. Despite the need for an accurate clinical test, the
definitive diagnosis of the disease is possible only after the death of the patient by
expert, pathologic examination of brain tissue.

The Surgeon Generals Report on
Mental Health, released on December 13, 1999, identified the importance and the need for
the early detection and diagnosis of Alzheimers disease. The report described the
current approach to Alzheimers disease diagnosis, clinical examination and the
exclusion of other common causes of its symptoms, as time- and labor-intensive, costly and
largely dependent on the expertise of the examiner. As a result, the illness is currently
underrecognized, especially in primary care settings, where most older patients seek care.
The report joined other experts writing in the field in recognizing the need for a better,
more reliable method for diagnosing the disease in living patients and in particular, the
need of a simple, accurate and convenient test that could detect a biochemical change
early in patients with Alzheimers disease. We believe our AlzheimAlert product
provides such a test.

The AlzheimAlert
Test; An Aid to the Diagnosis of Alzheimers Disease

We market a proprietary diagnostic
test for Alzheimers disease, known as the AlzheimAlert test, through our
government-inspected clinical reference laboratory in New Jersey. AlzheimAlert is an
improved version of our AD7C test, which has been on the market since 1997. It is a
urine test, where the patient provides a first-morning urine sample for testing. The
patients doctor then forwards the sample to our laboratory where our technical staff
performs the test. We then report the results to the doctor.

Our AlzheimAlert test is the
latest generation of our NTP testing technology. It measures the level of a brain protein
called neural thread protein (NTP) which is elevated early in Alzheimers disease as
reported both in the scientific literature and at scientific conferences. Researchers at
the Massachusetts General Hospital and Brown University led by Doctors Suzanne de la Monte
and Jack Wands first found large amounts of the protein in the brain tissue of patients
known to have died with Alzheimers disease. Subsequent research led to the
characterization of NTP and the gene that produces it. Nymox succeeded in developing a
highly sensitive test to detect the presence of NTP in the spinal fluid and, most
recently, in the urine of patients with Alzheimers disease. Recent studies (J.
Neuropathol Exp Neurol (2001; 60: 195-207) Journal Alzheimers Disease(2004; 231-242)) have provided further evidence that increased production of NTP leads
to a marked increase in nerve cell death and have shown that the cells subjected to NTP
died in a programmed fashion similar to the way the nerve cells in the brains of patients
with Alzheimers disease die. One of the characteristic signs of Alzheimers
disease is widespread brain cell loss.

Nymox believes that its
AlzheimAlert test can assist a physician faced with the task of diagnosing whether a
patient has Alzheimers disease. In company funded trials of its NTP testing
technology to date, involving over 500 clinical samples, the test results were positive
for over 80% of the patients with verified Alzheimer disease and negative in over 89% of
subjects without the disease (known as a low false positive rate). The low rate of
positive results for patients without the disease is important for doctors investigating
patients with subtle or marginal symptoms of mental, emotional, cognitive, or behavioral
changes. If the doctor can rule out Alzheimers with more assurance, a great deal of
patient and family anguish and anxiety will be avoided. A low test score will help the
doctor to be more certain that Alzheimers disease is not the cause of the
patients symptoms and to target the other, often reversible causes of the
patients symptoms, such as depression.

11

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Many studies published in scientific
publications or presented at scientific conferences over the past decade have confirmed
the accuracy of NTP as a biochemical marker for Alzheimers disease. Recent
publications in the peer-reviewed literature include, for example, the Journal of
Clinical Investigation (1997; 100: 3093-3104); Journal of Contemporary
Neurology (1998; art. 4a); Journal of Clinical Laboratory Analysis (1998; 12:
285-288) and (1998; 12: 223-226); Alzheimers Reports (1999; 2: 327-332),
(2000; 3: 177-184), (2001; 4: 61-65) and (2002; 5: 1-6); Neurology (2000; 54:
1498-1504) and (2000; 55: 1068); Journal of Alzheimers Disease (2001; 3:
345-353) and (2004; 6(3): 231-42); Cellular and Molecular Life Sciences (2001; 58:
844-849) and (2003; 60: 2679-91); Neurology and Clinical Neurophysiology (2002; 1:
2-7); Journal of Neuropathology and Experimental Neurology (2001; 60: 195-207) and
(1996; 55: 1038-1050), and Frontiers in Bioscience (2002; 7: d989-96). Reports
about this Nymox technology have also been featured in prestigious trade and lay
publications such as Clinica (Sept.25, 2000), Genetic Engineering News
(Oct.1, 2000), Clinical Laboratory News (Sept., 1999 and Oct., 2000), Modern
Maturity (Dec., 2000), ADVANCE for Administrators of the Laboratory (June,
2001), ASRT Scanner (August, 2001), RN magazine (August, 2001), Clinical
Geriatrics (Nov., 2000), LabMedica International (June, 1998), and Clinical
Laboratory International (October, 1998).

There can be no assurance that
further studies will repeat the same level of success experienced to date.

The early diagnosis of
Alzheimers disease is important to physicians, patients and their families and
enables them to make informed and early social, legal and medical decisions about
treatment and care. Early diagnosis of Alzheimers disease has become increasingly
important with new improvements in drug treatment and care. Even a modest delay in
institutionalization can mean substantial social and financial savings. Conversely, any
testing procedure that could rule out Alzheimers disease would eliminate the
tremendous uncertainty and anxiety patients and their families otherwise face and would
allow physicians to focus on the other, often reversible, causes of cognitive changes.

Early diagnosis as facilitated by the
AlzheimAlert test represents a potentially large cost-savings in the form of a
reduced number of office visits, lab tests, scans and other procedures required by the
traditional methods of diagnosis.

The AlzheimAlert test is an aid
to diagnosis, to be considered together with patient history, physical examination and
other relevant medical data. The test does not replace a physicians diagnosis.

AlzheimAlert offers a more
technically advanced means to detect elevated levels of NTP in urine. It is a completely
new assay in the competitive affinity format and has significant advantages of easy
adaptability to systems and equipment present in all modern clinical laboratories.

We have developed a diagnostic kit
version of the AlzheimAlert test, which would permit the testing of patient samples
in a general purpose medical laboratory. The sale of such a kit is subject to any
necessary regulatory approvals. In November 2004, we met the necessary European standards
to permit the sale of the kit in the European Union. In February 2004, we filed a
premarket approval (PMA) application with the FDA but have not yet received a final
decision about whether the kit will be approved for sale in the United States. We expect
that approval of a diagnostic kit version of AlzheimAlert kit will increase the
availability and acceptance of our test while lowering its cost to the patient or health
care payor.

12

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Other Biochemical
Indicators of Alzheimers Disease

We hold exclusive patent rights to
several other biochemical indicators for Alzheimers disease, including the brain
protein, 35i9, which we believe is also associated with Alzheimers disease. We
intend to use our extensive scientific, medical and commercial experience and know-how in
the field of Alzheimers disease in order to develop new diagnostic tests, methods
and treatments for the disease from these and other indicators.

# Development of
Therapeutic Products for Alzheimers Disease

At present, there is no cure for
Alzheimers disease. There are five drugs approved by the FDA, tacrine (brand-name
Cognex®), donepezil HCI (brand-name Aricept®), rivastigmine (brand-name
Exelon®), galantamine hydrobromide (brand name Reminyl®) and memantine (brand name
Namenda) for the treatment of Alzheimers disease. However, at most these drugs
offer symptomatic relief for the loss of mental function associated with the disease and
possibly help to delay the illness- progression. There is no consensus as to the cause of
Alzheimers disease or even whether it is one disease or many.

There is an urgent need for an
effective treatment for the illness, caused in part by the rising health care,
institutional and social costs for the treatment and care of Alzheimers disease
sufferers. The Surgeon Generals Report on Mental Health released on December 13,
1999, put the direct health care costs for the illness in the United States at almost $18
billion for 1996. In April 2002, the National Institute on Aging reported that the cost of
care to family, caregivers and society in general was estimated to exceed $100 billion per
year.

These costs are expected to rise
sharply as the baby boom generation ages and more people become at risk for the disease.
According to the National Institute on Agings Progress Report on Alzheimers
Disease, 2003, by 2050, researchers estimate that 13.2 million Americans will have
Alzheimers disease if current population trends continue and no preventive
treatments become available. The age group of Americans over the age of 85 is one of the
fastest growing segments of the population. As people live longer, they become more at
risk of developing Alzheimers disease.

Nymoxs research into drug
treatments for Alzheimers disease is aimed at compounds that could arrest the
progression of the disease and therefore are targeted for long term use.

Drugs Targeting Spherons

We are a leader in research and
development into drugs for the treatment of Alzheimers disease that target spherons.
Nymox researchers believe that spherons are a cause of senile plaques, the characteristic
lesion found abundantly in the brains of patients with Alzheimers disease and
believed by many researchers to play a pivotal role in the fatal illness. Spherons are
tiny balls of densely packed protein found in brain cells scattered throughout the brains
of all humans from age one. Nymox researchers have found that as humans age the spherons
grow up to a hundred times larger until they become too large for the cells that hold
them. Once released from the cells, the researchers believe that the spherons burst,
creating senile plaques, contributing to the cellular damage and biochemical changes
pivotal to the symptoms and signs of Alzheimers disease.

The substantial evidence linking
spherons to senile plaques and Alzheimers disease has been published in journals
such as the Journal of Alzheimers Disease, Drug News &
Perspectives and Alzheimer Reports. There are 20 important criteria of validity
which have been set forth correlating the disappearance of spherons in old age with the
appearance of senile plaques and implicating spherons as a major cause in Alzheimers
disease. In 2000, Nymox researchers published important findings in Alzheimer
Reports (2000; 3: 177-184) confirming that spherons contain key proteins that are also
known to be in senile plaques and showing that, like senile plaques, spherons contain
unusually old proteins in terms of the human bodys metabolism, with an average age
of 20 to 40 years. In 2003, Nymox announced the discovery that spherons contain toxic
molecules termed spherotoxins which its researchers believe contribute significantly to
the cell death and symptoms characteristic of Alzheimers disease.

13

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Nymox researchers believe that
stopping or inhibiting the transformation of spherons into senile plaques will help stop
or slow the progress of this illness. However, there is no consensus among researchers
about the causes or possible treatments of Alzheimers disease and not all
researchers share this belief that spherons are a causative factor in Alzheimers
disease or are a target for the development of treatments for the disease.

Based on the research findings
discussed above and the spheron-based approach to the treatment of the disease, we have
developed novel, proprietary drug screening methods based on spherons and used them to
discover, develop and test drug candidates to inhibit the formation of Alzheimer plaques
from spherons. These candidates have the potential to slow or stop the progression of the
disease.

We have two distinct new drug
candidates, NXD-3109 and NXD-1191, neither of which demonstrate significant toxicity and
both of which had positive animal testing results. These candidates are at the stage of
pre-clinical testing.

Such drug candidates will require
regulatory approval in order to begin clinical studies for humans, but there is no
guarantee that any of these drug candidates will ever be approved for marketing as a
treatment for Alzheimers disease. Drug candidates that look promising in early
studies in the laboratory or with animals often prove on further testing to be unsafe,
ineffective or impractical to use with human patients. The cost of bringing a drug
candidate through the necessary clinical trial and regulatory approvals is very high and
may require us to seek substantial financing through various sources including the issuing
of more stock, the borrowing of funds secured by financial instruments such as bonds or
agreements with major pharmaceutical companies. We risk not being able to secure such
funding in the necessary amounts or on sufficiently favorable terms.

Nymox holds global patent rights
covering both methods for using spherons as targets for developing drugs and for the
actual drug candidates discovered.

Neural Thread Protein
Based Drugs

Nymox developed a unique drug
screening system, based on the research that led to its AlzheimAlert test, to
identify other potential drug candidates for the treatment of Alzheimers disease.
There is a substantial body of evidence showing that NTP may play a key role in
Alzheimers disease. The published studies include Journal of the Neurological
Sciences (1996; 138: 26-35), Journal of Neuropathology and Experimental
Neurology (1996; 55: 1038-50), Journal of Clinical Investigation (1997; 100:
3093-3104), Alzheimers Reports (1999; 2: 327-332), Journal of
Alzheimers Disease(2001; 3: 345-353) and (2005; 7(1): 45-61), and Cellular
and Molecular Life Sciences(2001; 58: 844-849) and (2003; 60:2679-91). A recent study
published in the Journal of Neuropathology and Experimental Neurology (2001; 60:
195-207) reported on how a team of researchers at Brown University led by Dr. Suzanne
de la Monte and Dr. Jack Wands implanted the gene that produces NTP in nerve cells
derived from humans. They then caused the cells to turn on the implanted NTP gene and to
begin to produce NTP in elevated quantities. This caused a marked increase in nerve cell
death. Sophisticated analysis showed that the cells died in a programmed fashion similar
to the way the nerve cells in brains of patients with Alzheimers disease die.
Extensive loss of brain cells and accompanying brain shrinkage is a key part of the
Alzheimers disease process.

14

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Nymox screened compounds for their
ability to impede this process of premature cell death and thus potentially help slow or
halt the loss of brain cells in the Alzheimers disease brain. This screening process
identified promising drug candidates. The Company has targeted the candidate, NXD-9062,
for human trials. NXD-9062 has shown significant progress in key preclinical studies but
successful completion of pre-clinical studies is necessary before it can move into formal
regulatory studies.

Nymox licensed this technology in
1997 from Harvard University and the Massachusetts General Hospital as part of a sponsored
research and licensing agreement. Under the terms of this agreement, Nymox sponsored the
research of the principal investigators, Dr. Suzanne de la Monte and Dr. Jack
Wands, into the use of neural thread protein, its antibodies or genes for diagnostic or
therapeutic purposes. Nymox also paid the patent costs for the patent applications filed
arising out of this research. In return, Nymox received an exclusive worldwide license of
the patents to sell products and to use processes encompassed by them. Nymox is to pay the
Massachusetts General Hospital a 4% royalty of the net sales price of any product
developed and sold under the license. Nymox currently pays this royalty on its sales of
its AlzheimAlert product. The license and the obligation to pay patent costs and
royalties continues for the life of the patents, which run until November, 2014 at the
earliest. The Massachusetts General Hospital has the right to terminate the license in any
country where, after the first commercial sale of the product in the country, there is a
continuous two year period in which no product is sold in such country. There are four
issued U.S. patents and five outstanding U.S. patent applications under license
and a correspondingly larger number of patents and patent applications in Europe, Japan,
Canada, Australia, New Zealand and South Korea. The sponsored research portion of this
agreement terminated in March, 1999, when Dr. de la Monte and Dr. Wands moved to
Brown University.

Nymox entered into a similar
sponsored research and licensing agreement with Brown University and the Rhode Island
Hospital when Dr. de la Monte and Dr. Wands transferred there in March 1999 and
now carry out their research into neural thread protein. Under the terms of this
agreement, which became effective March 1, 1999 and was renewed from January 2002 to
March 2005, Nymox sponsored the research of the principal investigators, Dr. Suzanne
de la Monte and Dr. Jack Wands, into the uses of neural thread proteins, their
antibodies or genes for diagnostic, therapeutic and research purposes. Nymox also paid the
patent costs for any patent applications filed arising out of this research. In return,
Nymox received an exclusive worldwide license of any such patents to sell products and to
use processes encompassed by them. The Rhode Island Hospital has the right to terminate
the license in any country where, after the first commercial sale of the product in the
country, there is a continuous two year period in which no product is sold in such
country. Nymox is to pay the Rhode Island Hospital a 4% royalty of the net sales price of
any product developed and sold under the license. The sponsorship agreement has expired;
however, Nymox retains the exclusive license to patent rights on certain NTP-based
technology. This license includes a license to an issued U.S. patent and to a pending
patent application.

The Use of Statin Drugs
for the Treatment or Prevention of Alzheimers Disease

In October 2002, we were issued a
United States patent for the use of statin drugs to treat, prevent or reduce the risk of
the onset of Alzheimers disease. Statins are a class of commonly prescribed
cholesterol lowering drugs that have a well-established safety record and are widely
available. A number of published studies showed a link between statin use and lower
incidence of Alzheimers disease; see, for example, Neurology (2005;
64:1531-8); Archives of Neurology (2005; 62:753-7); International Journal of
Geriatric Psychiatry (2004; 19:327-32); Neuroepidemiology (2004; 23:94-8);
Neuron (2004; 41:7-10); Archives of Neurology (2000; 57:1439-1443);
Lancet (2000; 356:1627-1631); Archives of Neurology (2002; 59:223-227);
Journals of Gerontology: Biological Sciences and Medical Sciences (2002;
57:M414-M418); and Journal of the American Geriatrics Society (2002;50:1852-1856).
Other studies, however, did not find evidence of such a link and research in this area is
ongoing. No statin drug has been approved for use in the treatment or prevention of
Alzheimers disease.

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# New Antibacterial Agents
Against Infections and Food Contamination

We are developing new antibacterial
agents for the treatment of urinary tract and other bacterial infections in humans which
have proved highly resistant to conventional antibiotic treatments and for the treatment
of E. coli O157:H7 bacterial contamination in hamburger meat and other food and
drink products.

Nymox has developed four new
antibacterial agents:

| |  | NXB-4221
for the treatment of difficult chronic and persistent urinary tract infections;
| | - | ----------------------------------------------------------------------------------------

| |  | NXB-5886
for the treatment of streptococcal infection; and
| | - | ----------------------------------------------------------

| |  | NXT-1021
for the treatment of staphylococcal infection; and
| | - | -----------------------------------------------------------

| |  | NXC-4720
for the treatment of E. coli contamination of meat and other food and drink products
| | - | ---------------------------------------------------------------------------------------------

In the last ten years there has been
a growing recognition of the increasing problem of antibiotic-resistant infections and the
need for truly novel antibacterial drugs. See, for example, the European Commission report
dated May 28, 1999, Opinion of the Scientific Steering Committee on Antimicrobial
Resistance and the report from the Interagency Task Force on Antimicrobial
Resistance, co-chaired by the Centers for Disease Control and Prevention, the U.S. Food
and Drug Administration and the National Institutes of Health, entitled A Public Health
Action Plan to Combat Antimicrobial Resistance, released on January 19, 2001.

Urinary tract infections in women
caused by bacteria such as E. coli are a common and significant infection often
resistant to conventional antibiotic treatment. Some varieties of streptococcus and
staphylococcus bacteria, a common source of infection in humans, have acquired a broad
immunity to antibiotic treatments. Infections from these antibiotic resistant bacteria are
difficult to treat and can be life threatening.

Nymoxs three antibacterial
agents for the treatment of infectious disease have all shown the ability to kill their
bacterial targets in culture with no signs of toxicity. Further pre-clinical testing and
development is required before we can apply for regulatory approval to begin initial
testing in humans.

E. coli contamination
of food and drink is a serious public health problem           worldwide and a major
concern for meat processors in particular. E. coli          bacteria occur
normally and usually harmlessly in the gastrointestinal tracts of           humans, cows
and other animals. However, one mutant variety of the E. coli           bacteria, E.
coli O157:H7, can cause life-threatening illness and has           been implicated in
cases of severe diarrhea, intestinal bleeding and kidney           failure, leading, in
some cases, to death in children and the elderly. E.           coli contamination
in hamburger meat and other food products and in drinking           water affects about
70,000 people in the United States a year.

There is a well-recognized need in
the beef industry to address the problem of E. coli contamination in meat
processing and in livestock. E. coli contamination has triggered massive recalls of
ground beef in the U.S.. Cattle are a natural reservoir for the deadly strain of E.
coli. Water contamination from cattle operations have led to public health tragedies.

Nymox developed a potent new
antibacterial agent, NXC-4720. Tests of NXC-4720 show it to be highly effective against
all known substrains of E. coli O157:H7, the bacteria implicated in these severe
cases of food and drink contamination. Tests of NXC-4720 show that it destroys E.
coli O157 strains, including H7, efficiently, rapidly and at a very low dose. In 1999,
we began further laboratory trials for this agent as a treatment for food and drink
contamination and entered into agreements with various collaborators, including, most
recently, the Public Health Agency of Canada. Further pre-clinical testing and development
is required before we can apply for regulatory approval for use of this agent on the
processing of food and drink for human consumption.

16

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Nymox has patent rights to these and
other antibacterial agents.

# Development of
Therapeutic Products for Enlarged Prostate

We are developing treatments for
enlarged prostate (benign prostatic hyperplasia or BPH), using novel compounds. In 2003,
we successfully completed the first two Phase 1 and Phase 1-2 U.S. clinical trials for one
treatment candidate, NX-1207, and are commencing a pivotal Phase 2 clinical trial. We
cannot predict with any certainty the outcome of this trial, what further steps may be
required in order to apply for final FDA approval for this drug or whether the FDA will
ultimately grant us such approval.

More than half of men in their
sixties and as many as 90% of men in their seventies and eighties have some symptoms of
BPH. Symptoms include more frequent urination (especially at night), difficulty urinating,
incomplete emptying of the bladder and sometimes complete inability to urinate. More
serious cases may require surgical intervention to reduce the size of the prostate. There
is a need for a simple, effective treatment for BPH, particularly in cases where existing
drug treatments have proven to be ineffective and where more intrusive procedures such as
surgery may be inadvisable or bring unacceptable risks.

# The NicAlert Test
for Tobacco Product Use and the TobacAlert Test for Second-Hand Smoke Exposure

We also market NicAlert and
TobacAlert inexpensive, simple-to-use test strips that use urine to determine
whether a person is using tobacco products (NicAlert) or been recently exposed to
second-hand smoke (TobacAlert). Both NicAlert and TobacAlert detect
levels of cotinine, a by-product of the bodys breakdown of nicotine and generally
regarded as the best indicator of tobacco exposure for smokers and nonsmokers.

Smoking and other tobacco product use
is a serious public health problem. Smoking kills. According to the Centers for Disease
Control and Prevention, cigarette smoking is responsible for more than 430,000 deaths per
year in the United States alone. Smoking can cause cancer of the lung, mouth, bladder,
larynx and esophagus among others, heart disease and stroke and chronic lung disease.
Every year, exposure to second-hand smoke (environmental tobacco smoke or ETS) causes an
estimated 3,000 nonsmoking Americans to die of lung cancer and up to 300,000 American
infants and small children to suffer from lower respiratory tract infections.

NicAlert and TobacAlert
employ Serex, Inc.s patented technology and offer a quick, accurate means to test
on-site whether a person, such as a teenager, student athlete or insurance applicant, is
using a tobacco product or been exposed to second-hand smoke. TobacAlert is
available at approximately 5,400 CVS/pharmacy® stores across the U.S. as well as
online at www.cvs.com and at www.drugstore.com. In October 2002,
NicAlert received clearance from the FDA for sale for medical use in the United
States. Both NicAlert and TobacAlert are also being marketed in Europe, Asia
and Canada.

Manufacturing Arrangements

Our NicAlert and
TobacAlert products and AlzheimAlert kits are currently partly manufactured
through out-sourcing arrangements with contract manufacturers. To date, we have not
experienced any significant interruptions in the manufacture of these products and the
cost of the manufacturing services has not been volatile. The manufacturing services
supplied by our current contract manufacturer are not unique or unduly complicated and
other contract manufacturers are available to provide similar services in the event that
our current contract manufacturer fails to meet our needs.

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# Property, Plant And
Equipment

Nymox and Serex laboratory facilities
in Hasbrouck Heights, New Jersey comprise 4,799 square feet of leased space. That lease
agreement expires August 31, 2010. Nymox office and research facilities in St. Laurent,
Quebec, Canada comprise 6,923 square feet of leased space. The lease agreement expires on
August 31, 2010. Nymox Pharmaceutical Corp. and its two US subsidiaries Nymox Corp. and
Serex, Inc. own a full complement of equipment used in all aspects of their research and
development work and the Nymox reference laboratory. Nymox believes that its facilities
are adequate for its current needs and that additional space, if required, would be
available on commercially reasonable terms.

# Governmental Regulation

Our AlzheimAlert test which we
provide as a service through our clinical reference laboratory in New Jersey is subject to
extensive government regulation in the United States. Our clinical reference laboratory
and its performance of the AlzheimAlert must be certified by the Centers for
Medicare & Medicaid Services (CMS) under the Clinical Laboratory Improvement
Amendments (CLIA), which establishes quality standards for the laboratory tests being
performed to ensure the accuracy, reliability and timeliness of patient test results. In
addition, some individual states such as New York, Florida and New Jersey have their own
requirements for the inspection and certification of reference laboratories which offer
diagnostic services for patients within the state. Finally, the FDA has its own
regulations governing in vitro diagnostic products, including analyte-specific
reagents used in clinical reference laboratories. Any changes in our current certification
status, CMS or state law requirements or in the FDA regulations could have an impact on
our future ability to offer or market any reference laboratory services and/or on our
ability to obtain reimbursement from the Medicare and Medicaid programs and providers.

We intend to sell a diagnostic kit
version of the AlzheimAlert test that we developed. We will need to obtain FDA
approval before we can market or sell such a diagnostic kit version outside of the
clinical reference laboratory setting in the United States. Such approval for this type of
commercial development is necessary for all in vitro diagnostic kits.

In February 2004, we filed a
premarket approval application (PMA) with the FDA for the AlzheimAlert kit version
following the completion of clinical testing. In July 2004, we received a letter from the
FDA raising issues of clinical study methodology and stating that the PMA was not
approvable in its current form. We subsequently met with the FDA and submitted further
data and analyses in October and December 2004 and March and April 2005. The FDA has
informed us that our PMA will be going forward to a presentation before a panel of the
Medical Devices Advisory Committee with the date for the panel meeting to be confirmed in
due course. Advisory panels provide the FDA recommendations about the safety and
effectiveness of medical devices. The FDA will not make a decision about our application
until after the panel meeting. The FDA considers the panels recommendations but is
not bound by them when making its final decision about whether to approve our PMA. We
cannot predict with any certainty when or if such approval will be forthcoming and it is
possible that the FDA may require more clinical testing or further documentation before
approval. If approved, the diagnostic kit would then be subject to postmarketing record
and reporting obligations and manufacturing requirements.

Similar requirements exist in many
other countries. In November 2004, Nymox satisfactorily completed the testing and
registration required by European regulatory, environmental and quality standards in order
to obtain a CE Mark for the AlzheimAlert kit. The CE Mark makes the
AlzheimAlert kit eligible for sale in the European Union and will allow European
clinical and hospital laboratories to perform the AlzheimAlert test in their own
facilities in Europe.

18

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The regulatory process leading to
such approval can be time-consuming and expensive and can result in an outright denial or
a very limited approval only. Our product will be subject to premarketing and
postmarketing requirements applicable to such devices, including those governing:

| |  | clinical
testing;
| | - | -----------------

| |  | design
control procedures;
| | - | --------------------------

| |  | prior
FDA approval of a 510(k) application, where the FDA has determined that our diagnostic
device is substantial equivalent to a marketed device, or a premarket approval
application, where the FDA has been satisfied with clinical studies demonstrating the
safety and efficacy of our device;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | postmarketing
record and reporting obligations; and
| | - | ---------------------------------------------------

| |  | good
manufacturing practices.
| | - | -----------------------------

The requirements for a premarket
approval application are analogous to those for the approval of a new drug and include
four categories of information: indications for use, device description and manufacturing
methods, alternative practices and procedures for the diagnosis of the disease and
clinical and nonclinical studies. The requirements for a 510(k) application are generally
less onerous but still include indications for use, safety and effectiveness data as well
as manufacturing and quality assurance data and information. There can be no assurance
that the AlzheimAlert test or any other medical device that we may develop in the
future will obtain the necessary approvals within a specified time framework, if ever. In
addition, the FDA may impose certain postmarketing requirements that may significantly
increase the regulatory costs associated with our product. The FDA has recourse to a wide
range of administrative sanctions and civil and criminal penalties in order to enforce the
applicable laws, rules and regulations.

Our therapeutic products under
development by Nymox would also have to receive regulatory approval. This is a costly,
lengthy and risky process. In the United States, in order for a product to be marketed, it
must go through four distinct development and evaluation stages:

| | Product
Evaluation
| | ------------------

We must conduct preliminary studies
of potential drug candidates using various screening methods to evaluate them for further
testing, development and marketing.

| | Optimization
of Product Formulation
| | -----------------------------------

The activities in this stage of
development involve consultations between us and investigators and scientific personnel.
Preliminary selection of screening candidates to become product candidates for further
development and further evaluation of drug efficacy is based on a panel of research based
biochemical measurements. Extensive formulation work and in vitro testing are conducted
for each of various selected screening candidates and/or product candidates.

| | Clinical
Screening and Evaluation
| | ---------------------------------

During this phase of development,
portions of which may overlap with product evaluation and optimization of product
formulation, initial clinical screening of product candidates is undertaken and full scale
clinical trials commence. The FDA must approve any clinical testing on healthy subjects
(Phase 1) and on patients (Phase 2 and 3).

19

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| | Final
Product Development
| | -------------------------

The activities to be undertaken in
final product development include performing final clinical evaluations, conducting
large-scale experiments to confirm the reproducibility of clinical responses, making
clinical lots for any additional extensive clinical testing that may be required,
performing any further safety studies required by the FDA, carrying out process
development work to allow pilot scale production of the product, completing production
demonstration runs for each potential product, filing new drug applications, product
license applications, investigational device exemptions (and any necessary supplements or
amendments) and undergoing comprehensive regulatory approval programs and processes.

We cannot assure you that we will
successfully complete the development and commercialization of any therapeutic products.

In the United States, obtaining the
necessary FDA approval for any drug is a lengthy, expensive and often arduous process. We
cannot predict with any certainty the amount of time the FDA will take to approve one of
our drugs or even whether any such approval will be forthcoming. Similar requirements
exist in many other countries.

In the United States, the FDA
approval procedure is a two-step process. We must file an investigational new drug (IND)
application for each product with the FDA before beginning the initial (Phase I) clinical
testing of the new drug in healthy subjects. If the FDA has not commented on or questioned
the application within 30 days of its filing, initial clinical studies may begin. If,
however, the FDA has comments or questions, the questions must be answered to the
satisfaction of the FDA before initial clinical testing can begin. In some instances, this
process could result in substantial delay and expense. Phase I studies are intended to
demonstrate the functional characteristics and safety of a product.

After Phase I testing, we must
conduct extensive clinical trials with patients in order to establish the efficacy and
safety of our drug. Once we complete the required clinical testing, we expect to have to
file a new drug application for FDA approval in order to market most, if not all, of our
new drugs. The application is complicated and detailed and must include the results of
extensive clinical and other testing, the cost of which is substantial. The FDA conducts
an extensive and often lengthy review of such applications. The agency is required to
review applications within 180 days of their filing, but, during the review, frequently
requests that additional information be submitted. This starts the 180-day regulatory
review period anew when the requested additional information is submitted and, as a
result, can significantly extend the review period. Until the FDA actually approves the
new drug application, there can be no assurance that the agency will consider the
information requested and submitted to justify approval. The packaging and labeling of
products are also subject to FDA regulation. Accordingly, it is impossible to anticipate
when the FDA will approve a new drug application.

For NX-1207, our investigational new
drug treatment for benign prostatic hyperplasia (BPH), we successfully filed an IND
application and, in 2003, completed the first two Phase 1 and Phase 1-2 U.S. clinical
trials. We are commencing a pivotal Phase 2 clinical trial. We cannot predict with any
certainty the outcome of this trial, what further steps may be required in order to apply
for final FDA approval for this drug or whether the FDA will ultimately grant us such
approval.

We must also obtain approval for our
drugs or diagnostic devices from the comparable regulatory authority in other countries
before we can begin marketing our product in that country. The approval procedure varies
from country to country and can involve additional testing. The time required may differ
from that required for FDA approval. Although there are some procedures for unified
filings for certain European countries, in general each country has its own procedures and
requirements, many of which are time-consuming and expensive. Thus, there can be
substantial delays in obtaining required approvals from both the FDA and foreign
regulatory authorities after the relevant applications are filed.

20

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After such approvals are obtained,
further delays may be encountered before the products become commercially available. If,
subsequent to approval, new information becomes available concerning the safety or
effectiveness of any approved product, the regulatory authority may require the labeling
for the affected product to be revised or the product to be withdrawn. Our manufacturing
of any approved drug must conform with the FDAs good manufacturing practice
regulations which govern the production of pharmaceutical products and be subject to
inspections and compliance orders.

Government regulation also affects
our ability to receive an appropriate level of reimbursement for our products. Throughout
the developed world, both public and private health care plans are under considerable
financial and political pressure to contain their costs. The two principal methods of
restricting expenditures on drugs and diagnostic products and services are to deny
coverage or, if coverage is granted, to limit reimbursement. For single-payer government
health care systems, a decision to deny coverage or to severely restrict reimbursement for
one of our products can have an adverse effect on our business and revenues.

In the United States, where, to a
significant degree, the patient population for our products is elderly, Medicare and
Medicaid are sources of reimbursement. In general, any restriction on reimbursement,
coverage or eligibility under either program could adversely affect reimbursement to Nymox
for products and services provided to beneficiaries of the Medicare and/or Medicaid
programs. Many elderly people are covered by a variety of private health care
organizations either operating private health care plans or Medicare or Medicaid programs
subject to government regulation. These organizations are also under considerable
financial constraints and we may not be able to secure coverage or adequate reimbursement
from these organizations. Without coverage, we will have to look to the patients
themselves who may be unwilling or unable to pay for the product; in turn, doctors may be
reluctant to order or prescribe our products in the absence of coverage of the product for
the patient.

In response to rising health care
costs, the U.S. Congress implemented sweeping changes to the U.S. Medicare and Medicaid
systems in the Balanced Budget Act of 1997 and is currently considering a number of other
proposals that could significantly impact on the level of funding for Medicare and
Medicaid programs. Under the new Part C: Medicare + Choice programs, beneficiaries can now
opt for a variety of health delivery models, including coordinated care plans, HMOs,
preferred provider organizations and provider sponsored organizations, private
fee-for-service plans and medical savings account plans. In addition, states now have the
option to require Medicaid recipients to enroll with managed health care plans without
first obtaining a waiver, making it substantially easier for the states to meet their
Medicaid obligations through private managed care organizations. All these health care
delivery systems, including the original Medicare and Medicaid systems, are subject to
funding formulas and spending caps and may compensate for these restrictions by limiting
coverage, eligibility and/or payments. The long-term impact of these legislative changes
in terms of their efficiency, effectiveness and financial viability in delivering health
care services to an aging population is uncertain at present. Any legislative or
regulatory actions to reduce or contain federal spending under either the Medicare or
Medicaid programs could adversely affect our ability to participate in either program as a
provider or supplier of services or products and the amount of reimbursement under these
programs potentially available to us.

Our AlzheimAlert test, and any
of the new diagnostic and therapeutic products and services that we may develop, will be
subject to coverage determinations by health care providers and payers. Federal and state
regulations and law and internal coverage policies of health care organizations affect our
ability to obtain payments for our products and services. The Medicare program will not
pay for any expenses incurred for items or services that are not reasonable and necessary
for the diagnosis or treatment of illness or injury or to improve the functioning of a
malformed body member. Historically, CMS interpreted this provision in order to exclude
from Medicare coverage those medical and health care services that are not demonstrated to
be safe and effective by acceptable clinical evidence. CMS recently revised both its
national coverage policies and procedures in general and specifically its coverage of
diagnostic laboratory tests and constituted a Medicare Coverage Advisory Committee to
provide advice on the effectiveness and appropriateness of medical items and services that
are eligible for coverage under Medicare. It is unknown how these changes will affect our
ability to obtain Medicare coverage for its products and services. However, an adverse
national coverage decision with respect to one of our products or services will make it
impossible to receive reimbursement from Medicare for that product and more difficult to
convince private health care organizations to provide coverage for it. Even if we receive
a favorable coverage decision for one of our products or services, there is no guarantee
that the level of reimbursement for it will be close to our retail price for it or
commensurate with the costs of developing and marketing it.

21

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# Patents And Proprietary
Information

We believe that patent and trade
secret protection is important to our business, and that our success will depend, in part,
on our ability to obtain strong patents, to maintain trade secret protection and to
operate without infringing the proprietary rights of others.

The commercial success of products
incorporating our technologies may depend, in part, upon our ability to obtain strong
patent protection. We cannot assure you that additional patents covering new products or
improvements will be issued or that any new or existing patents will be of commercial
benefit or be valid and enforceable if challenged.

We pursue a policy of seeking patent
protection for valuable patentable subject matter of our proprietary technology and
require all employees, consultants and other persons who may have access to its
proprietary technology to sign confidentiality agreements.

Nymox has fifteen U.S. patents issued
or allowed and fourteen U.S. patent applications pending and a corresponding larger number
of patents and patent applications worldwide relating to the inventions and discoveries in
those patents and patent applications. Nymox has issued patents in the main European
markets, including Great Britain, Germany, France, Italy, The Netherlands, Sweden and
Spain among others and in other countries such as Japan, Canada and Australia. These
patents and patent applications cover much of our current product development and
technologies, including new drug candidates, proprietary screening technologies for
finding drugs, promising diagnostic markers, new diagnostic assay methods, methods of
treating meat and other food products; and anti-infective agents. The earliest expiry date
for its patents is in March, 2007; the next is in February, 2009 and the rest range from
2010 through 2017.

Nymoxs subsidiary, Serex, has
ten patents issued or allowed and four patent applications pending in the United States
and a corresponding larger number of patents and patent applications worldwide. These
patents and patent applications cover such areas as Serexs proprietary diagnostic
technologies and methodologies. The expiry dates for its patents range from 2012 to 2017.

Nymox also has exclusive rights to
six issued or allowed U.S. patents and seven pending U.S. patent applications as well as a
corresponding larger number of patents and patent applications worldwide through research
and license agreements. The earliest of these patents expires in 2014.

Many companies have patents covering
various drugs, methods and discoveries in the fields of diagnostics and therapeutics for
Alzheimers disease and related conditions and of new anti-infective agents. We
believe that the patents issued to date will not preclude Nymox from developing and
marketing our products; however, it is impossible to predict the extent to which licenses
from third parties will be necessary. If Nymox were to need licenses from third parties
there can be no assurance that we could obtain such licenses on commercially reasonable
terms, if at all.

22

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In the fields of diagnostic methods
and diagnostic tests for common human diseases and conditions, where Serex has many of its
patents, there are many patents issued covering many areas of diagnostic methods, tests
and technologies. We believe that these patents issued to date to other companies will not
preclude Serex from developing and marketing its products but you should be aware that it
is often difficult to determine the nature, breadth and validity of competing patent
claims in these fields, that there has been significant litigation in some of these areas
(not involving Serex) and that, if and when Serexs products become more commercially
successful, Serexs products or patents may become the subject matter of litigation.
If Serex were to need licenses from third parties there can be no assurance that it could
obtain such license on commercially reasonable terms, if at all.

Neither Nymox nor Serex are currently
involved in litigation over patent and other intellectual property rights but significant
litigation over these matters in the pharmaceutical and biotechnology industry is not
uncommon. The validity and extent of patent rights can be very difficult to determine and
involve complex legal, factual and scientific questions. Important legal issues about
patent protection in the field of biotechnology have not been resolved. Patent litigation
is costly and time-consuming and can consume substantial resources. An adverse decision
can preclude the marketing of a product, expose us to significant liabilities or require
us to obtain third party licenses, which may not be available at commercially reasonable
prices.

We also rely upon trade secrets,
know-how, and continuing technological advancement to develop and maintain our competitive
position. We control the disclosure and use of our know-how and confidential information
through agreements with the parties involved. In addition, we have confidentiality
agreements with our key employees, consultants, officers and directors. There can be no
assurance, however, that all confidentiality agreements will be honored, that others will
not independently develop equivalent technology, that disputes will not arise as to the
ownership of intellectual property, or that disclosure of our trade secrets will not
occur. Furthermore, there can be no assurance that others have not obtained or will not
obtain patent protection that will exclude us from using our trade secrets and
confidential information. To the extent that consultants or research collaborators use
intellectual property owned by others in their work with us, disputes may also arise as to
the rights to related or resulting know-how or inventions.

# Competition

Rapidly evolving technology and
intense competition are the hallmarks of modern pharmaceutical and biotechnology
industries. Our competitors include:

| |  | major
pharmaceutical, diagnostic, chemical and biotechnology companies, many of which have
financial, technical and marketing resources significantly greater than ours;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | biotechnology
companies, either alone or in collaborations with large, established pharmaceutical
companies to support research, development and commercialization of products that may be
competitive with ours; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | academic
institutions, government agencies and other public and private research organizations
which are conducting research into Alzheimers disease and which increasingly are
patenting, licensing and commercializing their products either on their own or through
joint ventures.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

23

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In the field of Alzheimers
disease diagnosis, our AlzheimAlert test faces growing competition which could
detrimentally impact on our ability to successfully market and sell our diagnostic test.
Our competitors include:

| |  | Athena
Diagnostics, Inc. which is currently marketing three tests claimed to aid in the
diagnosis of Alzheimers disease: a genetic test for the rare cases of familial,
early-onset Alzheimers disease; a genetic test for a relatively common mutation of
a gene said to increase the likelihood of a person with at least one of the genes
contracting the disease; and a test for two proteins in the spinal fluid of patients.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Syn
X Pharma which developed a blood test for a common human enzyme said to be elevated in
Alzheimers disease. Syn X recently announced plans to market the test following the
decision by Ortho-MacNeil Diagnostics to terminate its license to the test.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There are also a number of other
proposed biochemical signs of the disease that could potentially be developed into a
commercial diagnostic test as well as various scanning and imaging technologies which
compete for a portion of the diagnostic market for Alzheimers disease. In June 2004,
the Centers for Medicare and Medicaid Services (CMS) approved limited coverage of a
Positronic Emission Tomography (PET) imaging procedure for helping to more precisely
distinguish Alzheimers disease from a rarer type of dementia when clinical
evaluation has been inconclusive. In October 2004, the National Institute of Aging in
conjunction with other Federal agencies, private companies and organizations launched the
Alzheimers Disease Neuroimaging Initiative, a $60 million initiative to test whether
various scanning and imaging technologies, biochemical markers, and clinical and
neuropsychological testing can be combined to help diagnose early Alzheimers
disease. A number of companies, including GE, are actively working to develop imaging
technologies for the diagnosis of Alzheimers disease.

Our NicAlert and
TobacAlert products face competition from clinical laboratories such as Lab One,
LabCorp, and Quest Diagnostics which provide off-site lab testing for cotinine, the
by-product of the bodys breakdown of nicotine measured by NicAlert and
TobacAlert, and from assay suppliers, including immunoassay developers such as
Orasure Techologies Inc. and Cozart Bioscience Ltd, and diagnostic system manufacturers
such as Roche Diagnostics, Abbott and Diagnostic Products Corporation. NicAlert and
TobacAlert also face competition from distributors who supply simple yes-no smoking
status tests such as SmokeCheck, NicQuick, and QuickScreen, from NicCheck I, an
FDA-cleared smoking status test being marketed by Mossman & Associates Ltd, and, in
the United Kingdom, from SmokeScreen, a chemical color-based tobacco test being marketed
by Mermaid Diagnostics, Ltd..

We also face intense competition for
the development of an effective treatment for Alzheimers disease. The market
conditions for an Alzheimers disease drug strongly favor the entry of other
corporations into the area. The current market for therapeutic drugs for Alzheimers
disease is an estimated $2 billion. This market is expected to grow rapidly as new drugs
enter the market and as the baby boom generation becomes more at risk for developing
Alzheimers disease. As a result, most of the major pharmaceutical companies and many
biotechnology companies have ongoing research and development programs for drugs and
treatments for Alzheimers disease. Many of these companies have much greater
scientific, financial and marketing resources than we have and may succeed in developing
and introducing effective treatments for Alzheimers disease before we can. At
present, four drugs for Alzheimers disease are being widely marketed in the United
States, Aricept® by Pfizer, Exelon® by Novartis, Reminyl® by Janssen and
Namenda by Forest. These four drugs only treat some of the symptoms of
Alzheimers disease by enhancing memory and other mental functions and not the
underlying causes of the illness.

A similar competitive reality
prevails in the field of novel anti-infectives. Over the past ten years, there has been an
increasing awareness of the medical need and of emerging market opportunities for new
treatments for antibiotic resistant bacterial infections. Many of the major pharmaceutical
companies are developing anti-infective drugs that either modify their existing drugs or
involve new anti-bacterial properties. Many biotechnology companies are developing new
classes of anti-bacterial drugs. At least three major pharmaceutical companies have
vaccines against bacterial infections in development. To the extent that these companies
are able to develop drugs or vaccines that offer treatment for some or all of the
indications for our anti-infectives, the market for our products may be adversely
affected.

24

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Our treatments under development for
enlarged prostate (benign prostatic hyperplasia or BPH) face significant competition from
existing products. There are six drugs approved for treatment of BPH: finasteride
(Proscar®), terazozin (Hytrin®), doxazozin (Cardura®), tamsulosin
(Flomax®), prazosin (Minipres®) and alfusozin (Uroxatral®). There are a number
of thermal treatments on the market designed to shrink the enlarged prostate by heating
its tissue with a device inserted through the urethra (the tube leading from the bladder
through the penis through which men urinate) or through the abdomen. The devices on the
market use microwave energy (Prostatron®, Targis Therapy® or TherMatrx®), low
level radiowaves (TUNA System®), lasers (Indigo LaserOptic Treatment System® or
Laserscope GreenLight PVP), direct heat or hot water to heat or burn away prostate
tissue. A variety of surgical procedures exist to surgically reduce or remove the prostate
or to widen the urethra. These include procedures to cut away prostate tissue such as TURP
(transurethral resection of the prostate) and using a resectoscope with an electrical loop
inserted through the penis to cut the prostate tissue. A small device used to widen the
constricted urethra called a prostatic stent can also be inserted.

The problem of E. coli O157:H7
contamination of hamburger meat and other food products is also well-known and a number of
companies and researchers have been pursuing various potential solutions, including
irradiation with x-rays, better detection of contamination, electronic pasteurization,
vaccination and competitive exclusion of the pathogenic E. coli bacteria by
harmless bacteria. The development of alternative solutions to the problem of E. coli
infection may adversely affect the market for our treatment for E.coli O157:H7
infection in cattle and contamination of food products.

# Marketing

We currently market our
AlzheimAlert test as a clinical reference laboratory service primarily in the United
States. In November 2004, our AlzheimAlert test was certified with a CE Mark, making
the device eligible for sale in the European Union. Nymox has signed a distribution deal
in Italy for AlzheimAlert with Alifax S.p.A.. The Company has also signed a
distribution agreement for AlzheimAlert in the Czech Republic with KlinLab, Ltd.. We
are also marketing our TobacAlert test, which can determine a persons exposure
to second-hand smoke, in the United States through our own marketing arm and distributors,
including CVS/pharmacy® and Drugstore.com, as well as in Europe and Asia. We are also
marketing our NicAlert product which has received clearance from the FDA for medical
uses. We have not started to commercially market or distribute any of our other products
under development and most of them will require regulatory approval in each country before
being marketed there.

At present, we do most of our
marketing ourselves. To increase our marketing, distribution and sales capabilities both
in the United States and around the world, we will need to enter into licensing
arrangements, contract sales agreements and co-marketing deals. We cannot assure you that
we will be able to enter into agreements with other companies on terms acceptable to us,
that any licensing arrangement will generate any revenue for the company or that the costs
of engaging and retaining the services of a contract sales organization will not exceed
the revenues generated.

If successfully developed and
approved, we plan to market and sell our therapeutic and diagnostic products directly or
through co-promotion arrangements or other licensing arrangements with third parties. In
cases where we have sole or shared marketing rights, we plan to build a small, focused
sales force if and when such products approach marketing approval in some markets,
including Europe. Implementation of this strategy will depend on many factors, including
the market potential of any products we develop as well as on our financial resources. To
the extent we will enter into co-promotion or other licensing arrangements, any revenues
received by us will be dependent on the efforts of third parties.

25

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# ITEM 5. OPERATING AND
FINANCIAL REVIEW AND PROSPECTS

# General

We are a development stage
biopharmaceutical company that specializes in the research and development of therapeutics
and diagnostics for the aging population with an emphasis on Alzheimers disease.

We market the AlzheimAlert
test, which we provide in our clinical reference laboratory, that is an aid to the
diagnosis of Alzheimers disease. AlzheimAlert is an improved version of our
AD7C test, from which we began generating revenue from sales in 1997. The
AlzheimAlert test is also certified with a CE Mark, making the device eligible for
sale in the European Union.

We also market NicAlert and
TobacAlert, our two products, which determine a persons level of exposure to
tobacco products.

We have under development therapeutic
agents for the treatment of Alzheimers disease, for the treatment of enlarged
prostate (BPH) and of certain antibiotic-resistant infections as well as antibacterial
agents for E. coli contamination of food and drink products.

We also have the rights to a U.S.
patent for the use of statin drugs for the treatment or prevention of Alzheimers
Disease.

We have incurred operating losses
throughout our history. Management believes that such operating losses will continue for
the next few years. The costs relating to clinical trials for our potential therapeutic
products will increase expenditures and delay profitability, despite anticipated increases
in sales revenue in the coming years.

All figures are presented in U.S.
dollars, unless otherwise stated.

# Liquidity And Capital
Resources

We fund our operations and projects
primarily by selling shares of Nymoxs common stock. However, since 1997, a small
portion of our funding also comes from sales. This source of funding became more
significant in late 1998, following the launch of our urinary version of the AD7C
test. Since its incorporation in May, 1995, Nymox raised the capital necessary to fund its
on-going research and development work and its marketing and sales operations primarily
through private placements of its shares.

On December 1, 1997, our common
shares began trading on the Nasdaq Stock Market. Nymoxs common shares also traded on
the Montreal Exchange from December 18, 1995 to November 19,1999.

Private placements completed by Nymox
since December, 1995 are as follows:

| | December
1995, 1,578,635 common shares at a price of CAN$2.00 (US$1.38) per share for total
proceeds of CAN$3,157,270 (US$2,187,536);
|- | -------------------------------------------------------------------------------------------------------------------------------------

| | April
1996, 877,300 common shares at a price of CAN$6.00 (US$4.15) per share for total proceeds
of CAN$5,263,800  (US$3,647,059);
|- | ---------------------------------------------------------------------------------------------------------------------------------

26

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| | May
1997, 696,491 common shares at a price of CAN$6.50 (US$4.50) and warrants exercisable at
a price of CAN$8.50 (US$5.88) per share for total proceeds of CAN$4,527,191
(US$3,136,694). In 1998, all 696,491 of these warrants were exercised for additional
proceeds to Nymox of CAN$5,920,174 (US$4,101,832);
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | May
1998, 231,630 common shares at a price of CAN$8.50 (US$5.88) for total proceeds of
CAN$1,968,855 (US$1,364,134). A total of 110,000 warrants were issued as well,
exercisable at a price of CAN$8.50 (US$5.88) per share (50,000) and CAN$10.00 (US$6.93)
per share (60,000). These warrants have since expired;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | December
1998, 135,000 common shares and January 1999, 55,000 common shares at CAN$8.50 (US$5.88)
per share, for total proceeds of CAN$1,615,000 (US$1,118,963). A total of 95,000 warrants
were issued as well, exercisable at the price of CAN$10.00 (US$6.93) per share. These
warrants have since expired;
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | September
1999, 122,000 common shares at CAN$5.00 (US$3.46) per share, for total proceeds of
CAN$610,000 (US$422,642).
|- | ----------------------------------------------------------------------------------------------------------------------

| | March
2000, 821,637 common shares at an average price of $4.87 per share, for total proceeds of
$4,000,000. A total of 93,334 warrants were issued as well, exercisable at a price of
$9.375 per share (66,667) and $7.8125 per share (26,667). These warrants expired on March
6, 2004.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | March,
2001, 200,000 common shares at $2.06 per share, for total proceeds of $412,000. A total
of 100,000 warrants were issued as well, exercisable at a price of $2.06. These warrants
were exercised on February 17, 2003.
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | August
3, 2001, 80,000 common shares at $2.50 per share for total proceeds of $200,000.
|- | ---------------------------------------------------------------------------------------

| | August
22, 2001, 140,000 common shares at $3.75 per share for total proceeds of $525,000.
|- | -----------------------------------------------------------------------------------------

| | October
3, 2001, 110,000 common shares at $3.75 per share for total proceeds of $412,500.
|- | -----------------------------------------------------------------------------------------

| | November
14, 2001, 64,100 common shares at $3.90 per share for total proceeds of $250,000.
|- | ------------------------------------------------------------------------------------------

| | January
24, 2002, 74,074 common shares at $4.05 per share for total proceeds of $300,000.
|- | -----------------------------------------------------------------------------------------

| | March
18, 2002, 195,000 common shares at $4.20 per share for total proceeds of $819,000.
|- | ----------------------------------------------------------------------------------------

| | June
18, 2002, 90,000 common shares at $4.00 per share for total proceeds of $360,000.
|- | --------------------------------------------------------------------------------------

| | July
17, 2002, 86,000 common shares at $4.68 per share for total proceeds of $403,000.
|- | --------------------------------------------------------------------------------------

| | September
9, 2002, 91,000 common shares at $4.40 per share for total proceeds of $400,400.
|- | ------------------------------------------------------------------------------------------

| | November
27, 2002, 53,500 common shares at $3.75 per share for total proceeds of $200,625.
|- | ------------------------------------------------------------------------------------------

| | December
17, 2002, 125,000 common shares at $4.10 per share for total proceeds of $512,500.
|- | -------------------------------------------------------------------------------------------

| | February
17, 2003, 100,000 warrants were exercised at a price of $2.06 per share for total
proceeds of $206,000.
|- | ----------------------------------------------------------------------------------------------------------------

From March 2000 to January 2003, we
received a total of $1,327,273 for the following sales of our shares pursuant to a common
stock purchase agreement with an investment company.

| | August
16, 2000, 152,616 common shares at a volume weighted average price of $3.2924 per share;
|- | -----------------------------------------------------------------------------------------------

| | October
12, 2000, 137,889 common shares at a volume weighted average price of $3.6261 per share;
|- | ------------------------------------------------------------------------------------------------

| | February
7, 2001, 161,696 common shares at a volume weighted average price of $2.0240 per share;
|- | ------------------------------------------------------------------------------------------------

| | May
31, 2001, 56,108 common shares at a volume weighted average price of $1.9466 per share.
|- | -------------------------------------------------------------------------------------------

This common stock purchase agreement expired
in January 2003. As part of the agreement we issued to the investment company a stock
purchase warrant, which expired November 30, 2004, permitting it to purchase up to 200,000
shares of our common stock at an exercise price of $4.53 per share.

On January 27, 2003 we entered into a
Common Stock Private Purchase Agreement with an investment company, Lorros-Greyse
Investments, Ltd., for the future issuance and purchase of Nymoxs common shares. In
general, the agreement provided Nymox with a commitment from the investment company to
purchase up to $5 million of Nymoxs common shares over the twenty-four month period
beginning in January 2003. At any time during that period, we may give notice to the
investment company requiring it to purchase a specified dollar amount of our shares. The
amount specified in any one notice may be up to $500,000 but not less than $150,000. The
maximum amount can be higher if both parties agree. The number of shares Nymox will issue
to the investment company in return for that money will be equal to the amount specified
in the notice divided by 97% of the average market price of our common shares for the five
trading days preceding the giving of the notice.

27

---

Under this agreement dated January
27, 2003, we received a total of $2,360,000 for the following shares under this common
stock private purchase agreement:

| | January
30, 2003, 107,382 common shares at a price of $3.725 per share.
|- | -----------------------------------------------------------------------

| | March
3, 2003, 245,098 common shares at a price of $4.08 per share.
|- | -------------------------------------------------------------------

| | June
6, 2003, 167,224 common shares at a price of $2.99 per share.
|- | ------------------------------------------------------------------

| | July
8, 2003, 80,128 common shares at a price of $3.12 per share.
|- | -----------------------------------------------------------------

| | August
8, 2003, 77,778 common shares at a price of $2.70 per share.
|- | -------------------------------------------------------------------

On August 25, 2003, we signed a new
Common Stock Private Purchase Agreement, whereby the same investor was committed to
purchase up to $12 million of Nymoxs common shares over the twenty-four month period
beginning in August 2003, subject to the same terms and conditions as before.

Under this agreement dated August 25,
2003, we received a total of $4,350,000 for the following shares under this common stock
private purchase agreement:

| | September
30, 2003, 204,918 common shares at a price of $2.44 per share.
|- | ------------------------------------------------------------------------

| | October
21, 2003, 182,203 common shares at a price of $2.36 per share.
|- | ----------------------------------------------------------------------

| | December
8, 2003, 106,383 common shares at a price of $2.82 per share.
|- | ----------------------------------------------------------------------

| | December
22, 2003, 109,091 common shares at a price of $2.75 per share.
|- | -----------------------------------------------------------------------

| | January
14, 2004, 102,041 common shares at a price of $3.92 per share.
|- | ----------------------------------------------------------------------

| | February
27, 2004, 69,284 common shares at a price of $4.33 per share.
|- | ----------------------------------------------------------------------

| | March
10, 2004, 100,402 common shares at a price of $4.98 per share.
|- | --------------------------------------------------------------------

| | April
30, 2004, 92,807 common shares at a price of $4.31 per share.
|- | -------------------------------------------------------------------

| | June
22, 2004, 69,444 common shares at a price of $2.88 per share.
|- | ------------------------------------------------------------------

| | July
7, 2004, 140,056 common shares at a price of $3.57 per share.
|- | ------------------------------------------------------------------

| | August
3, 2004, 130,990 common shares at a price of $3.13 per share.
|- | --------------------------------------------------------------------

| | September
27, 2004, 52,885 common shares at a price of $2.08 per share.
|- | -----------------------------------------------------------------------

On October 6, 2004, we signed a new Common
Stock Private Purchase Agreement, whereby the same investor is committed to purchase up to
$13 million of Nymoxs common shares over the twenty-four month period beginning in
October 2004, subject to the same terms and conditions as before.

Under this agreement dated October 6,
2004, we have received to date a total of $2,340,000 for the following shares under this
common stock private purchase agreement:

| | October
25, 2004, 95,238 common shares at a price of $2.10 per share.
|- | ---------------------------------------------------------------------

| | December
14, 2004, 148,699 common shares at a price of $2.69 per share.
|- | -----------------------------------------------------------------------

| | December
22, 2004, 78,616 common shares at a price of $3.18 per share.
|- | ----------------------------------------------------------------------

| | February
7, 2005, 82,474 common shares at a price of $2.91 per share.
|- | ---------------------------------------------------------------------

| | February
22, 2005, 50,676 common shares at a price of $2.96 per share.
|- | ----------------------------------------------------------------------

| | March
17, 2005, 51,136 common shares at a price of $2.64 per share.
|- | -------------------------------------------------------------------

| | April
25, 2005, 127,119 common shares at a price of $2.36 per share.
|- | --------------------------------------------------------------------

| | May
24, 2005, 109,489 common shares at a price of $2.74 per share.
|- | ------------------------------------------------------------------

| | June
9, 2005, 95,339 common shares at a price of $2.36 per share.
|- | -----------------------------------------------------------------

| | June
17, 2005, 58,333 common shares at a price of $2.40 per share.
|- | ------------------------------------------------------------------

On June 20, 2005, Nymox had $10.7
million of financing available under the facility. We expect this stock purchase agreement
to provide sufficient financing to enable us to advance our research and product
development for the next two years.

28

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Also, the Company has received total
proceeds of $669,144 from the exercise of 256,900 options since 1995 as follows:

| | $355,536
for 158,900 shares at a per share price of $2.25.
|- | ----------------------------------------------------------

| | $258,858
for 83,000 shares at a per share price of $3.12.
|- | ---------------------------------------------------------

| | $16,000
for 5,000 shares at a per share price of $3.20.
|- | -------------------------------------------------------

| | $38,750
for 10,000 shares at a per share price of $3.875.
|- | ---------------------------------------------------------

Pursuant to the share purchase
agreement entered into to acquire a controlling interest of Serex, Inc., a total of
257,607 additional shares and 158,526 warrants were issued in exchange for the shares of
Serex. Since January 2004, 131,940 of these warrants have been exercised under a
cashless exercise, whereby the warrant holder receives a number of shares
equivalent in value to the net difference between the strike price on the warrant and the
average market price on the day before the date of the cashless exercise,
according to a formula contained in the warrant agreement. The net effect of these
cashless exercises has been the issuance of 22,061 shares of Nymox. Another
1,090 of these warrants were exercised resulting in the issuance of 1,090 shares of Nymox,
for proceeds of $4,033.

In total, Nymox has raised over $37.6
million, since its incorporation in May 1995.

We have no financial obligations of
significance other than long-term lease commitments for our premises in the United States
and Canada of $18,585 per month in 2005. Total commitments in 2005 and beyond are
summarized in note 8 to the consolidated financial statements.

A demand note payable by the Company
to a third party of $500,000, bearing interest at the prime rate plus 2% is due on or
before December 31, 2005. In addition, the Company issued a note payable in the amount of
$100,000, which was repaid on January 14, 2005.

# Results Of Operations

Overview

Since inception, the Company has
focused its activities on developing certain pharmaceutical technologies and obtaining
outside funding to support the continued development of its technologies. The Company has
incurred losses since inception of operations. Future profitability will depend on the
Companys ability to generate revenues from the sale of products and the licensing of
technology sufficient to offset the expenditures required to further the Companys
research and development program and ongoing operations. See Item 4 of this report for a
description of the projects in the Company pipeline.

Effective January 1, 2000, the
Company adopted the US dollar as its measurement currency. All amounts presented are in US
dollars.

In 2000, the Company acquired a
majority interest in Serex, Inc. for a consideration comprising common shares, warrants
and options.

# Critical Accounting
Policies

In December 2001, the Securities and Exchange
Commission (SEC) released Cautionary Advice Regarding Disclosure About
Critical Accounting Policies. According to the SEC release, accounting policies are
among the most critical if they are, in managements view, most important
to the portrayal of the companys financial condition and most demanding on their
calls for judgment.

29

---

Our accounting policies are described
in the notes to our annual audited consolidated financial statements. We consider the
following policies to be the most critical in understanding the judgments that are
involved in preparing our financial statements and the matters that could impact our
results of operations, financial condition and cash flows.

Revenue Recognition

The Company has generally derived its
revenue from product sales, research contracts, license fees and interest. Revenue from
product sales is recognized when the product or service has been delivered or obligations
as defined in the agreement are performed. Revenue from research contracts is recognized
at the time research activities are performed under the agreement. Revenue from license
fees, royalties and milestone payments is recognized upon the fulfillment of all
obligations under the terms of the related agreement. These agreements may include upfront
payments to be received by the Company. Upfront payments are recognized as revenue on a
systematic basis over the period that the related services or obligations as defined in
the agreement are performed. Interest is recognized on an accrual basis. Deferred revenue
presented in the balance sheet represents amounts billed to and received from customers in
advance of revenue recognition.

The Company currently markets
AlzheimAlert as a service provided by our CLIA certified reference laboratory in New
Jersey. Physicians send urine samples taken from their patients to our laboratory where
the AlzheimAlert test is performed. The results are then reported back to the
physicians. We recognize the revenues when the test has been performed. The Company
sometimes enters into bulk sales of its diagnostic services to customers under which it
has a future obligation to perform related testing services at its laboratory. Although
the Company receives non-refundable upfront payments under these agreements, revenue is
recognized in the period that the Company fulfils its obligation or over the term of the
arrangement. For research contracts and licensing revenues, the Company usually enters
into an agreement specifying the terms and obligations of the parties. Revenues from these
sources are only recognized when there are no longer any obligations to be performed by
the Company under the terms of the agreement.

Valuation of Capital
Assets

The Company reviews the unamortized
balance of property and equipment, intellectual property rights and patents on an annual
basis and recognizes any impairment in carrying value when it is identified. Factors we
consider important, which could trigger an impairment review include:

| | Significant
changes in the manner of our use of the acquired assets or the strategy for our overall
business; and
|- | -----------------------------------------------------------------------------------------------------------------

| | Significant
negative industry or economic trends.
|- | -------------------------------------------------

Valuation of Future
Income Tax Assets

Management judgment is required in
determining the valuation allowance recorded against net future tax assets. We have
recorded a valuation allowance of $11.1 million as of December 31, 2004, due to
uncertainties related to our ability to utilize some of our future tax assets, primarily
consisting of net operating losses carried forward and other unclaimed deductions, before
they expire. In assessing the realizability of future tax assets, management considers
whether it is more likely than not that some portion or all of the future tax assets will
not be realized. The ultimate realization of future tax assets is dependent upon the
generation of future taxable income and tax planning strategies. The generation of future
taxable income is dependent on the successful commercialization of its products and
technologies.

30

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# Results of Operations
2004

|Selected Annual Information      | 2004 | 2003 | 2002
|-------------------------------- | ---- | ---- | ----
|Total Revenues                   |      |      | $   
|Net Loss                         |      |      | $   
|Loss per share (basic & diluted) |      |      | $   
|Total Assets                     |      |      | $   

|Quarterly Results 2004           | Q1 | Q2 | Q3 | Q4      
|-------------------------------- | -- | -- | -- | --------
|Total Revenues                   |    |    | $  | 58,255  
|Net Loss                         |    |    | $  | (963,782
|Loss per share (basic & diluted) |    |    | $  | (0.04   

|Quarterly Results 2003           | Q1 | Q2 | Q3 | Q4      
|-------------------------------- | -- | -- | -- | --------
|Total Revenues                   |    |    | $  | 34,027  
|Net Loss                         |    |    | $  | (928,490
|Loss per share (basic & diluted) |    |    | $  | (0.04   

# YEAR ENDED DECEMBER 31,
2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

Results of Operations

Net losses were $944,272, or $0.04
per share, for the quarter and $3,745,625, or $0.15 per share, for the year ended December
31, 2004, compared to $1,455,746, or $0.06 per share, and $4,354,288, or $0.18 per share,
respectively, for the corresponding periods in 2003. The weighted, diluted, average number
of common shares outstanding for the year ended December 31, 2004 were 25,103,252 compared
to 23,771,858 for the same period in 2003.

Revenues

Revenues from sales amounted to
$78,369 for the quarter and $321,895 for the year ended December 31, 2004, compared with
$31,991 for the quarter and $199,217 for the year ended December 31, 2003. A steady rise
in the number of new clients ordering the NicAlert / TobacAlert product
account for the increase in sales. The Company anticipates that revenues will increase if
and when product candidates pass regulatory milestones and are launched on the market.

Research and Development

Research and development expenditures
were $1,861,239 for the year ended December 31, 2004, compared with $2,510,051 for the
year ended December 31, 2003. In 2004, research tax credits amounted to $9,358 compared to
$33,019 in 2003. Corporate activities in 2004 were more focused on clinical trials and
submissions to regulatory agencies, which explain the decrease in R&D expenditures and
tax credits. The Company anticipates that research and development expenditures will not
increase significantly as product candidates finish development and clinical trials.

Marketing Expenses

Marketing expenditures were $307,649
for the year ended December 31, 2004, in comparison to expenditures of $197,435 for the
year ended December 31, 2003. Increased marketing of our products accounts for the rise in
expenditures. The Company anticipates that marketing expenditures will increase if and
when new products are launched on the market.

31

---

Administrative Expenses

General and administrative expenses
were $1,158,750 for the year ended December 31, 2004, compared with $1,311,311 in the year
ended December 31, 2003 due to a decrease in professional fees. The Company anticipates
that general and administrative expenditures will increase as new product development
leads to expanded operations.

Foreign Exchange

The Company incurs expenses in the
local currency of the countries in which it operates, which include the United States and
Canada. Approximately 75% of 2004 expenses (70% in 2003) were in U.S. dollars. Foreign
exchange fluctuations had no meaningful impact on the Companys results in 2004 or
2003.

Inflation

The Company does not believe that
inflation has had a significant impact on its results of operations.

Long-Term Commitments

Nymox has no financial obligations of
significance other than long-term lease commitments for its premises in the United States
and Canada of $18,672 per month.

|Contractual Obligations       | Total | Current | 1-3 years | 4-5 years
|----------------------------- | ----- | ------- | --------- | ---------
|Rent                          |       |         | $         | 97,091   
|Operating Leases              |       |         | $         | 32,479   
|Other Long Term Obligations   |       |         | $         | 0        
|Total Contractual Obligations |       |         | $         | 129,570  

# Financial Position

Liquidity and Capital
Resources

As of December 31, 2004, cash totaled
$529,642 and receivables including tax credits totaled $93,794. In August 2003, the
Corporation signed a new common stock private purchase agreement, whereby an investor is
committed to purchase up to $12 million of the Corporations common shares over a
twenty-four month period commencing August 25, 2003. As at September 30, 2004, twelve
drawings were made under this purchase agreement, for total proceeds of $4,350,000.
Specifically, on September 30, 2003, 204,918 common shares were issued at a price of $2.44
per share. On October 21, 2003, 182,203 common shares were issued at a price of $2.36 per
share. On December 8, 2003, 106,383 common shares were issued at a price of $2.82 per
share. On December 22, 2003, 109,091 common shares were issued at a price of $2.75 per
share. On January 14, 2004, 102,041 common shares were issued at a price of $3.92 per
share. On February 27, 2004, 69,284 common shares were issued at a price of $4.33 per
share. On March 10, 2004, 100,402 common shares were issued at a price of $4.98 per share.
On April 30, 2004, 92,807 common shares were issued at a price of $4.31 per share. On June
22, 2004, 69,444 common shares were issued at a price of $2.88 per share On July 7, 2004,
140,056 common shares were issued at a price of $3.57 per share. On August 3, 2004,
130,990 common shares were issued at a price of $3.13 per share. On September 27, 2004,
52,885 common shares were issued at a price of $2.08 per share.

32

---

The Company negotiated a new
agreement with the same investor on October 6, 2004, under the same terms and conditions
of the previous agreement. The Company can draw down $13,000,000 over 24 months under the
new agreement. As at December 31, 2004, three drawings were made under this purchase
agreement, for total proceeds of $850,000. On October 25, 2004, 95,238 common shares were
issued at a price of $2.10 per share. On December 14, 2004, 148,699 common shares were
issued at a price of $2.69 per share. On December 22, 2004, 78,616 common shares were
issued at a price of $3.18 per share. The Company can still draw down a further
$12,150,000 over the remaining 21 months under the agreement. The Company intends to
access financing under this agreement when appropriate to fund its research and
development. The Company believes that funds from operations as well as from existing
financing agreements will be sufficient to meet the Companys cash requirements for
the next twelve months.

The Company used cash of $3,233,008
in operations in 2004 compared to $3,590,418 in 2003. The Company invested $406,047 in
additional capital assets in the year ended December 31, 2004, consisting mostly of patent
costs, compared to $294,917 in the same period in 2003.

# YEAR ENDED DECEMBER 31,
2003 COMPARED TO YEAR ENDED DECEMBER 31, 2002

Results of Operations

Net losses were $4,354,288, or $0.18
per share, for the year ended December 31, 2003, compared to $3,422,019, or $0.15 per
share for the corresponding period in 2002. The weighted, diluted, average number of
common shares outstanding for the year ended December 31, 2003 were 23,771,858 compared to
22,965,668 for the same period in 2002.

Revenues

Revenues from sales amounted to
$199,217 for the year ended December 31, 2003, compared with $356,162 for the year ended
December 31, 2002. The reduction in marketing expenditures (due to regulatory tasks and
trials associated with the kit format of the products) accounted for the reduction in
revenues for AlzheimAlert (decrease 39%) and for NicAlert (decrease 43%) in
2003. The Company anticipates that revenues will increase if and when product candidates
pass regulatory milestones and are launched on the market.

Research and Development

Research and development expenditures
were $2,510,051 for the year ended December 31, 2003, compared with $1,706,086 for the
year ended December 31, 2002. The increase is attributable to higher spending in the
development of the therapeutic products in the Companys pipeline. In 2003, research
tax credits amounted to $33,019 compared to $16,656 in 2002. The rise is due to an
increase in the expenses admissible for government tax credits. The Company anticipates
that research and development expenditures will not increase significantly as product
candidates finish development and clinical trials.

Marketing Expenses

Marketing expenditures were $197,435
for the year ended December 31, 2003, in comparison to expenditures of $235,925 for the
year ended December 31, 2002. The decrease is attributable to planned reduced costs
relating to marketing agreements. The Company anticipates that marketing expenditures will
increase if and when new products are launched on the market.

General and
Administrative Expenses

General and administrative expenses
were $1,311,311 for the year ended December 31, 2003, compared with $1,230,439 in the year
ended December 31, 2002 due to increased professional fees. The Company anticipates that
general and administrative expenditures will increase as new product development leads to
expanded operations.

33

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# Research and
Development, Patents and Licensees

Nymoxs research and development
policies are targeted at the development of novel therapeutic and diagnostic proprietary
products that are subject to patent rights either directly owned by the company or
licensed to the company through exclusive licensing agreements of patent rights. Over the
last three financial years, the companys research and development activities have
included the development and validation of a kit version of its AlzheimAlert product
intended for sale to laboratories and hospitals in the U.S. and in the E.U., the
development and clinical testing of NX-1207, its therapeutic product for benign prostatic
hyperplasia, the development of its anti-bacterial agents, such as NXC-4720, targeted at
reducing the risk of E. coliO157:H7 contamination of food and drink products and
infection of livestock, and the development and validation of its NicAlert and
TobacAlert products. Other research and development work included preclinical
development of novel drug candidates, research into the role spherons play in the
Alzheimers disease process and development of new diagnostic tests using its
subsidiarys patented diagnostic technologies. The amount spent during each of the
last three financial years on company-sponsored research and development activities is as
follows:

|                                    | 2004 | 2003 | 2002
|----------------------------------- | ---- | ---- | ----
|Research & Development Expenditures |      |      | $   

# Trend Information

The Company does not currently
know of any material trends that would be material to our operations.

# Off-Balance Sheet
Arrangements

The Company has no existing
off-balance sheet arrangements as defined under SEC regulations.

# ITEM 6. DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES

# Directors and Senior
Management

Dr.           Paul Averback, M.D.,
D.A.B.P., 54, President and Director since September 1995           and Chairman since
June of 2001, is the founder of Nymox and the inventor of           much of its initial
technology. Prior to founding Nymox, Dr. Averback served as           President of Nymoxs
predecessor, DMS Pharmaceuticals Inc. He received his           M.D. in 1975 and taught
pathology at universities, including Cambridge           University, England (1977-1980),
during which time he initiated his research on           Alzheimers disease. He has
practiced medicine in numerous Canadian           institutions as well as in private
practice. Dr. Averback has published           extensively in the scientific and medical
literature.

Dr.          Hans
Black, MD, 51, Director since May 13, 1999, has a doctorate in medicine           from
McGill University, and has been Chairman and Chief Investment Officer of
          Interinvest Consulting Corporation, a Montreal-based global money management
          firm with offices in Toronto and Boston and affiliates in Bermuda and Zurich,
          for over twenty five years. Dr. Black appears regularly on the PBS network
show,           Nightly Business Report, and has been a guest lecturer at Harvard, Temple
and           McGill Universities. Dr. Black is a member of the boards of Fonds de
Recherche           de lInstitut de Cardiologie de Montréal and LOpéra
de           Montréal, a member of the Advisory Council of The Paul H. Nitze
School of           Advanced International Studies of Johns Hopkins University, and is a
member of           the board of Abitibi Consolidated Inc. In addition, Dr. Black serves
as chairman           of the board of the Quebec-based food company, Les Aliments SoYummi
Inc.

34

---

Jack Gemmell, 53, has been a Director
since June, 2001 and is Nymoxs General Counsel and Chief Information Officer. He
graduated from the Faculty of Law at the University of Toronto in 1977 and was called to
the bar in 1979. He practiced in private practice primarily in the area of litigation for
over 19 years before joining Nymox in July, 1998.

Michael R. Sonnenreich, 67, Director
since April 18, 2000, is a graduate of Harvard University Law School, and has been Senior
Partner of Michael Sonnenreich P.C., since 1973, Chairman and CEO of Kikaku America
International for the past fifteen years, and President and CEO of Glocal Communications
Corp. Ltd. of London for the past five years. He is also Vice Chairman of PharMa
International Corporation of Tokyo, Director of Asset Advisory Services of Zurich, Member
of the Board of Advisors of John Hopkins University School of Advanced International
Studies and Member of the Board of Overseers of Tufts University Medical School. Mr.
Sonnenreich has in the past been a Board Member or a Trustee of numerous important
companies and universities, and has long-term involvements with many non-profit
institutions, and served as President of the National Coordinating Council on Drug
Education.

Professor Walter P. von Wartburg, 66,
Director since April 18, 2000, is a partner in the private law practice of Law & Life
Sciences in Basel, Switzerland, specializing in biotech and drug regulatory affairs. Prior
to joining Law & Life Sciences, Professor von Wartburg spent 32 years in the
pharmaceutical industry. Most recently, from 1996 to 1999, he was Chief Information
Officer of Novartis and from 1990-1996, he was Chief of Staff of Ciba-Geigy (which merged
with Sandoz in 1996 to form Novartis). From 1980 to 1990, he was a member of the Executive
Committee of Ciba-Geigy. He is a law graduate of the Universities of Basel, Paris,
Princeton, Stanford and Harvard Law School; Member of the Basel Bar Association and
Professor on public health policy at the Saint Gall Graduate School of Economics, Business
and Public Administration. He is author of various books and articles on drug abuse,
pharmaceutical legislation, biotechnology, issues management, communications and business
administration. He is also the Founder-President of the Swiss Foundation for the Mentally
Handicapped PRO MENTE SANA; Member of the National Advisory Board of the
Bioethics Institute of the Johns Hopkins University and past Chairman of the Board of the
University Hospital of Basel.

Mr.        Roy
M. Wolvin, 50, Secretary-Treasurer and Chief Financial Officer since           September
1995. Prior to September 1995, Mr. Wolvin was Account Manager, private
          business, for a Canadian chartered bank. Mr. Wolvin holds a degree in Economics
          from the University of Western Ontario.

Mr.           Brian Doyle, B.Sc.,
M.B.A., 50, Senior Manager Global Sales and Marketing since           May 2003. He
received his B.Sc. in Microbiology and Immunology from McGill           University, in
1979. He worked in the Experimental Surgery department at McGill           in cancer
research, before completing his MBA at Concordia University, in 1983.           He has
wide sales, marketing and merchandising experience and spent the last 15           years
at a technical sales representative firm, where he was National Sales           Manager
before joining Nymox.

Dr.          Celine Dupuis, MD,
CMSQ, DABP, 46, Chief Clinical Officer since January 1, 2005,           received her MD
from Laval University in 1982, and completed her residency in           Anatomical
Pathology at McGill University and the University of Montreal in           1987. Dr
Dupuis has practiced family medicine, as well as pathology, managed           medical and
laboratory facilities, and has publications in the scientific and           patent
literature.

# Compensation

The table below provides compensation
information for the fiscal year ended December 31, 2004 for each executive officer of
Nymox and for the directors and executive officers as a group.

35

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Summary Compensation Table

|                           
|---------------------------
|NAME AND PRINCIPAL POSITION
|Dr. Paul Averback          
|President and C.E.O.       
|Mr. Roy Wolvin             
|Secretary-Treasurer        
|Mr. Jack Gemmell           
|General Counsel            
|Mr. Brian Doyle            
|Global Sales Manager       
|All directors and senior   
|management as a group      

Nymox does not have written
employment contracts with any of the senior management named above except Brian Doyle.
Directors of Nymox, with the exception of the President and our General Counsel, are paid
a fee of $1,000 for each board meeting attendance and are reimbursed for expenses incurred
in connection with their office.

The Company does not have any pension
plans or other type of plans providing retirement or similar benefits for senior
management.

# Board Practices

Directors are elected at each annual
meeting for a term of office until the next annual meeting. Executive officers are
appointed by the board of directors and serve at the pleasure of the board. Other than Dr.
Averback, no other officer or director previously was affiliated with DMS Pharmaceuticals
Inc.

There are no family relationships
between any director or executive officer and any other director or executive officer.

Nymox does not have written contracts
with any of the directors named above. The Company does not have any pension plans or
other type of plans providing retirement or similar benefits for directors, nor any
benefits upon termination of service as a director.

Nymoxs Audit Committee consists
of three directors appointed by the Board who are independent of management and who are
generally knowledgeable in financial and auditing matters. The Chairman of the Audit
Committee is Hans Black, M.D.; the other members are Michael Sonnenreich and Walter von
Wartburg.

The primary role of the Audit
Committee is to provide independent oversight of the quality and integrity of the
accounting, auditing, and reporting practices of the Company with a particular focus on
financial statements and financial reporting to shareholders.

36

---

Subject to shareholder approval, the
Committee is responsible for the appointment, compensation, and oversight of the public
accounting firm engaged to prepare or issue an audit report on the financial statements of
the Company. It oversees all relationships between the Company and the auditor, including
reviewing on an ongoing basis any non-audit services and special engagements that may
impact the objectivity or independence of the auditors. The auditors report directly to
the Audit Committee. The Audit Committee reviews the scope and results of the audit with
the independent auditors.

The Audit Committee meets at least
four times a year to review with management and the independent auditors the
companys interim and year-end financial condition and results of operations. Its
review includes an assessment of the adequacy of the internal accounting, bookkeeping and
control procedures of the company.

The Audit Committee also has the
responsibility for reviewing on an ongoing basis all material transactions between the
company and its affiliates and other related parties such as officers, directors, other
key management personnel, major shareholders and their close family members, affiliated
companies or associated enterprises.

The Audit Committee has the power to
conduct or authorize investigations into any matters within the Committees scope of
responsibilities, including the power and authority to retain and determine funding for
independent counsel, accountants, or other advisors as it determines necessary to carry
out its duties.

The Human Resources and Compensation
Committee consists of the independent directors of the Company. The Chairman of the
Committee is Professor Walter von Wartburg; the other members are Dr. Hans Black and
Michael Sonnenreich.

The Committee establishes and reviews
overall policy and structure with respect to compensation and employment matters,
including the determination of compensation arrangements for directors, executive officers
and key employees of the company. The Committee is also responsible for the administration
and award of options to purchase shares pursuant to the Companys option and share
purchase plans.

The Corporate Governance Committee
consists of the independent directors of the Company. The Chairman of the Committee is
Michael Sonnenreich; the other members are Dr. Hans Black and Professor Walter von
Wartburg. This Committee has the general mandate of providing an independent and regular
review of the management, business and affairs of the Company, including the
Companys corporate governance. This Committee also reviews and approves director
nominations to ensure each nominee meets the requisite requirements under applicable
corporate and securities laws, rules and regulations and otherwise possesses the skills,
judgment and independence appropriate for a director of a public corporation.

# Employees

In addition to the employees in its
Hasbrouck Heights and St.-Laurent laboratories and offices, Nymox carries out its work
with the assistance of an extensive group of research collaborators, out-sourced
manufacturing teams, research suppliers, research institutions, service providers and
research consultants. To help carrying out its marketing, Nymox has independent medical
representatives detailing its products.

In its Hasbrouck Heights and
St.-Laurent laboratories and offices, for the year 2004, the Company employed on the
average sixteen persons with twelve in research and development and four in administration
and marketing; for the year 2003, eighteen persons (fourteen in research and development
and four in administration and marketing); and for the year 2002, nineteen persons
(fourteen in research and development and five in administration and marketing).

37

---

# Share Ownership

As of June 22, 2005, the number of
common shares owned or controlled by, and options granted to directors and senior officers
of the Corporation were as follows:

|Name                | Common Shares
Owned and
Controlled | Percentage
of Common
Shares Owned | Options
Vested | Options
Not Vested | Exercise
Price | Expiry Date
M/D/Y
|------------------- | ---------------------------------- | --------------------------------- | -------------- | ------------------ | -------------- | -----------------
|Paul Averback, M.D  | 13,115,395                         | 50.1                              | 500,000        |                    | $3.00          |                  
|Hans Black, M.D     | 54,100                             | *                                 | 25,000         |                    | $3.12          | (C$4.50)         
|                    |                                    |                                   | 25,000         |                    | $3.875         |                  
|                    |                                    |                                   | 50,000         |                    | $6.93          | (C$10.00)        
|                    |                                    |                                   | 10,000         |                    | $4.70          |                  
|                    |                                    |                                   | 75,000         |                    | $4.33          |                  
|Michael Sonnenreich | 105,370                            | *                                 | 100,000        |                    | $3.875         |                  
|                    |                                    |                                   | 75,000         |                    | $4.33          |                  
|Walter von Wartburg | 82,000                             | *                                 | 100,000        |                    | $3.875         |                  
|                    |                                    |                                   | 75,000         |                    | $4.33          |                  
|Jack Gemmell        | 12,725                             | *                                 | 50,000         |                    | $6.93          | (C$10.00)        
|                    |                                    |                                   | 25,000         |                    | $3.875         |                  
|                    |                                    |                                   | 25,000         |                    | $1.93          |                  
|                    |                                    |                                   | 20,000         |                    | $2.62          |                  
|Roy Wolvin          | 5,000                              | *                                 | 10,000         |                    | $2.25          | (C$3.25)         
|                    |                                    |                                   | 10,000         |                    | $9.53          | (C$13.75)        
|                    |                                    |                                   | 10,000         |                    | $6.79          | (C$9.80)         
|                    |                                    |                                   | 20,000         |                    | $6.93          | (C$10.00)        
|                    |                                    |                                   | 20,000         |                    | $3.12          | (C$4.50)         
|                    |                                    |                                   | 5,000          |                    | $1.93          |                  
|                    |                                    |                                   | 5,000          |                    | $2.62          |                  
|Brian Doyle         | 10,000                             | *                                 | 30,000         | 20,000             | $3.75          |                  
|Celine Dupuis       | 848,172                            | *                                 |                |                    |                |                  

---

* Denotes less than 1%.

# Options

Nymox has created a stock option plan
for its key employees, its officers and directors and certain consultants. The board of
directors of Nymox administers the plan. The board may grant options to purchase a
specified number of common shares of Nymox to a designated individual. The total number of
common shares to be optioned to any one individual cannot exceed 5% of the total number of
issued and outstanding shares and the maximum number of common shares which may be
optioned under the plan cannot exceed 2,500,000 shares without shareholder approval.

The board fixes the option price per
share for common shares that are the subject of any option, when it grants any such
option. The option price cannot involve a discount to the market price when the option is
granted. The period during which an option is exercisable shall not exceed 10 years from
the date when the option is granted. The options may not be assigned, transferred or
pledged and expire within three months of the termination of employment or office with the
Company and six months of the death of an individual.

38

---

# ITEM 7. MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

# Major Shareholders

The following table sets out as of
June 22, 2005, the number of common shares owned and controlled by Dr. Paul Averback, the
President and CEO of Nymox and a member of the Nymox board of directors, and by all
directors and officers as a group.

|Name of Shareholder                   | Number of Common Shares owned by
Shareholder | Percent of Class of
Common Shares
|------------------------------------- | -------------------------------------------- | ---------------------------------
|Dr. Paul Averback                     | 13,115,395                                   | 50.3 %                           
|All directors and officers as a group | 14,232,762                                   | 54.6 %                           

As of June 22, 2005, Dr. Celine
Dupuis, Dr. Averbacks wife, owned 848,172 common shares (3.3%).

The above shareholders have the same
voting rights as all other shareholders. There has been no significant change in ownership
for any of the persons listed above over the past three years.

Nymox does not know of any other
shareholders that beneficially own or hold dispositive power over more than 5% of its
shares.

According to information furnished to
Nymox by the transfer agent for the common shares, as of June 22, 2005, total shares
outstanding were 26,078,628. There were 224 holders of record of the common shares and
4,189 beneficial shareholders in total. Of these, 83 were holders of record of the common
shares and 3,302 were beneficial shareholders with addresses in the United States and such
holders owned an aggregate of 9,198,450 shares, representing 35.6 % of the outstanding
shares of common stock.

# Related Party
Transactions

The Company did not have any related
party transactions for the year ended December 31, 2004.

# ITEM 8. FINANCIAL
INFORMATION

In 2004, sales by Nymox Corporation
were $319,093, of which $297,599 (92.5%) were in the United States and $21,495 (6.7%) were
export sales. Sales in Canada were $2,801 (0.8%).

39

---

Consolidated Financial Statements of

NYMOX PHARMACEUTICAL CORPORATION

Years ended December 31, 2004, 2003
and 2002

40

---

| | KPMG LLP                   |                         
| | -------------------------- | ------------------------
| | Chartered Accountants     
| | 2000 McGill College Avenue | Telephone (514) 840-2100
| | Suite 1900                 | Telefax (514) 840-2187  
| | Montreal (Quebec) H3A 3H8  | www.kpmg.ca             

# REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Directors of Nymox
Pharmaceutical Corporation

We have audited the accompanying
consolidated balance sheets of Nymox Pharmaceutical Corporation and its subsidiaries as of
December 31, 2004 and 2003 and the consolidated statements of operations, deficit and
cash flows for each of the years in the three-year period ended December 31, 2004. These
consolidated financial statements are the responsibility of the Corporations
management. Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our audit opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of the Nymox Pharmaceutical Corporation and its subsidiaries as of
December 31, 2004 and 2003 and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 2004, in conformity with
Canadian generally accepted accounting principles.

Canadian generally accepted
accounting principles vary in certain significant respects from accounting principles
generally accepted in the United States of America. Information relating to the nature and
effect of such differences is presented in note 12 to the consolidated financial
statements.

(signed)          KPMG
LLP

Chartered Accountants

Montréal, Canada

February 18, 2005 (except as to note
15 (b),    which is as of February 22, 2005)

41

---

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002

# Financial Statements

|Consolidated Balance Sheets                | 43
|------------------------------------------ | --
|Consolidated Statements of Operations      | 44
|Consolidated Statements of Deficit         | 45
|Consolidated Statements of Cash Flows      | 46
|Notes to Consolidated Financial Statements | 47

42

---

---

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Balance Sheets

December 31, 2004 and 2003(in US
dollars)

|                                          
|------------------------------------------
|                                          
|Assets                                    
|Current assets:                           
|Cash                                      
|Accounts receivable                       
|Research tax credits receivable           
|Inventories                               
|Prepaid expenses and deposit              
|                                          
|                                          
|Long-term security deposit                
|Long-term receivables (note 6)            
|Property and equipment (note 3)           
|Patents and intellectual property (note 4)
|                                          
|                                          
|                                          
|Liabilities and Shareholders' Equity      
|Current liabilities:                      
|Accounts payable                          
|Accrued liabilities                       
|Notes payable (note 5)                    
|Deferred revenue                          
|                                          
|                                          
|Non-controlling interest (note 6)         
|Shareholders' equity:                     
|Share capital (note 7)                    
|Warrants and options (note 7 (f))         
|Additional paid-in capital (note 7 (f))   
|Deficit                                   
|                                          
|                                          
|Commitments and contingencies (note 8)    
|Subsequent events (note 15)               
|                                          
|                                          
|                                          

See accompanying notes to
consolidated financial statements.

On behalf of the Board:

/s/ Paul Averback,
MD  Director

/s/ Hans Black, MD
Director

43

---

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Operations

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

|                                          
|------------------------------------------
|                                          
|Revenues:                                 
|Sales                                     
|Interest                                  
|                                          
|                                          
|Expenses:                                 
|Research and development                  
|Less research tax credits                 
|                                          
|                                          
|General and administrative                
|Marketing                                 
|Cost of sales                             
|Depreciation of property and equipment    
|Amortization of patents and intellectual  
|property                                  
|Write-down of equipment                   
|Interest and bank charges                 
|                                          
|                                          
|Gain on disposal of property and equipment
|                                          
|                                          
|                                          
|Net loss                                  
|                                          
|                                          
|Basic and diluted loss per share (note 10)
|                                          

See accompanying notes to
consolidated financial statements.

44

---

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Deficit

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

|                                            
|--------------------------------------------
|                                            
|Deficit, beginning of year                  
|Adjustment to reflect change in accounting  
|for amortization of patents (note 2 (c))    
|                                            
|                                            
|Adjustment to reflect adoption of fair value
|for employee stock options (note 2 (h))     
|                                            
|Deficit, beginning of year, restated        
|Net loss                                    
|Share issue costs                           
|                                            
|Deficit, end of year                        
|                                            

See accompanying notes to
consolidated financial statements.

45

---

NYMOX PHARMACEUTICAL CORPORATION
Consolidated Statements of Cash Flows

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

|                                                    
|----------------------------------------------------
|                                                    
|Cash flows from operating activities:               
|Net loss                                            
|Adjustments for:                                    
|Depreciation of property and equipment              
|Amortization of patents and intellectual            
|property                                            
|Stock-based compensation                            
|Write-down of equipment                             
|Gain on disposal of property                        
|and equipment                                       
|Services paid with common shares                    
|Write-down of deferred share issuance costs         
|Changes in operating assets and liabilities:        
|Accounts receivable                                 
|Research tax credits receivable                     
|Inventories                                         
|Prepaid expenses                                    
|Accounts payable and accrued liabilities            
|Deferred revenue                                    
|                                                    
|                                                    
|Cash flows from financing activities:               
|Proceeds from issuance of share capital             
|Share issue costs                                   
|Proceeds from notes payable                         
|Repayment of notes payable                          
|                                                    
|                                                    
|Cash flows from investing activities:               
|Additions to property and equipment                 
|Additions to patent costs                           
|Proceeds from disposal of property and equipment    
|                                                    
|                                                    
|                                                    
|Net (decrease) increase in cash                     
|Cash, beginning of year                             
|                                                    
|Cash, end of year                                   
|                                                    
|Supplemental disclosure to statements of cash flows:
|(a) Interest paid                                   
|(b) Non-cash transactions:                          
|Shares issued for services                          
|Additions to patent costs included in               
|accounts payable and accrued liabilities            
|at year-end                                         
|                                                    

See accompanying notes to
consolidated financial statements.

46

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|1. | Business
activities:
|-- | --------------------

| | Nymox
Pharmaceutical Corporation (the Corporation), incorporated under the Canada
Business Corporations Act, including its subsidiaries, Nymox Corporation, a Delaware
Corporation, and Serex Inc. of New Jersey, is a biopharmaceutical corporation which
specializes in the research and development of products for the diagnosis and treatment of
Alzheimers disease. The Corporation is currently marketing
AlzheimAlertTM, a urinary test that aids physicians in the diagnosis of
Alzheimers disease. The Corporation also markets NicAlertTM and
TobacAlertTM, tests that use urine or saliva to detect use of tobacco products.
The Corporation is also developing therapeutics for the treatment of Alzheimers
disease, new treatments for benign prostate hyperplasia, and new anti-bacterial agents for
the treatment of urinary tract and other bacterial infections in humans, including a
treatment for E. coli O157:H7 bacterial contamination in meat and other food and
drink products.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Since
1989, the Corporations activities and resources have been primarily focused on
developing certain pharmaceutical technologies. The Corporation is subject to a number of
risks, including the successful development and marketing of its technologies. In order to
achieve its business plan and the realization of its assets and liabilities in the normal
course of operations, the Corporation anticipates the need to raise additional capital
and/or achieve sales and other revenue generating activities. Management believes that
funds from operations as well as existing financing facilities will be sufficient to meet
the Corporations requirements for the next year.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Corporation is listed on the NASDAQ Stock Market.
| | -----------------------------------------------------

|2. | Significant
accounting policies:
|-- | --------------------------------

| | (a) | Consolidation:
| | --- | --------------

| | The
consolidated financial statements of the Corporation have been prepared under Canadian
generally accepted accounting principles (GAAP) and include the accounts of
its US subsidiaries, Nymox Corporation and Serex Inc. Intercompany balances and
transactions have been eliminated on consolidation.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Consolidated
financial statements prepared under US GAAP would differ in some respects from those
prepared in Canada. A reconciliation of earnings and shareholders equity reported in
accordance with Canadian GAAP and with US GAAP is presented in note 12.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Inventories:
| | --- | ------------

| | Inventories
consist of finished goods and are carried at the lower of cost and net realizable value.
Cost is determined on the basis of weighted average cost.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------

47

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|2. | Significant
accounting policies (continued):
|-- | --------------------------------------------

| | (c) | Property
and equipment, patents and intellectual property:
| | --- | ----------------------------------------------------------

| | Property
and equipment, patents and intellectual property are recorded at cost. Depreciation and
amortization are provided using the straight-line method at the following rates:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                     
|-------------------------------------
|
|Laboratory equipment                 
|Computer equipment                   
|Office equipment and fixtures        
|Intellectual property rights acquired
|                                     

| | Direct
costs incurred in connection with securing the patents are capitalized. Patents are being
amortized using the straight-line method over the shorter of their economic useful lives
or their legal terms of existence ranging from 17 to 20 years.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Corporation has amended its method of amortizing patent costs to be consistent with the
treatment followed by the Corporation under United States generally accepted accounting
principles (GAAP). Certain patents were initially amortized by the Corporation
commencing in the year of commercialization of the developed products for Canadian GAAP
purposes. The Corporation now amortizes all patents over the legal life of the patents
from the date the patent is secured. This change has been applied retroactively and has
decreased amounts previously reported for patents and intellectual property on the
consolidated balance sheet at December 31, 2003 by $119,714 and increased the accumulated
deficit at December 31, 2003 by $119,714. The change did not have a material impact on the
statements of operations for the periods presented.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Impairment
and disposal of long-lived assets:
| | --- | ---------------------------------------------

| | On
January 1, 2004, the Corporation adopted the new recommendations of the Canadian Institute
of Chartered Accountants (CICA) relating to the impairment of long-lived
assets. A long-lived asset, consisting of property and equipment and intangible assets
with definite useful lives, is tested for recoverability whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | An
impairment loss is recognized for long-lived assets, when the carrying amount of an asset
to be held and used exceeds the sum of the undiscounted cash flows expected from its use
and disposal; the impairment recognized is measured as the amount by which the carrying
amount of the net asset exceeds its fair value.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

48

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|2. | Significant
accounting policies (continued):
|-- | --------------------------------------------

| | (d) | Impairment
and disposal of long-lived assets (continued):
| | --- | ---------------------------------------------------------

| | Assets
to be disposed of would be separately presented in the balance sheet and reported at the
lower of the carrying amount of fair value less costs to sell, and would no longer be
depreciated.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There
was no impact on the Corporations financial statements as a result of adopting
these recommendations.
| | ------------------------------------------------------------------------------------------------------------

| | (e) | Revenue
recognition:
| | --- | --------------------

| | Revenue
from product sales is recognized when the product or service has been delivered or
obligations as defined in the agreement are performed. Revenue from research contracts is
recognized at the time research activities are performed under the agreement. Revenue from
license fees, royalties and milestone payments is recognized upon the fulfillment of all
obligations under the terms of the related agreement. These agreements may include upfront
payments to be received by the Corporation. Upfront payments are recognized as revenue on
a systematic basis over the period that the related services or obligations as defined in
the agreement are performed. Interest is recognized on an accrual basis.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Deferred
revenue represents amounts billed to and received from customers in advance of revenue
recognition.
| | ------------------------------------------------------------------------------------------------------------

| | (f) | Research
and development expenditures:
| | --- | --------------------------------------

| | Research
expenditures, net of research tax credits, are expensed as incurred. Development
expenditures, net of tax credits, are expensed as incurred, except if they meet the
criteria for deferral in accordance with generally accepted accounting principles.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (g) | Foreign
currency translation:
| | --- | -----------------------------

| | The
Corporations measurement currency is the United States dollar. Monetary assets and
liabilities of the Canadian and foreign operations denominated in currencies other than
the United States dollar are translated at the rates of exchange prevailing at the balance
sheet dates. Other assets and liabilities denominated in currencies other than the United
States dollar are translated at the exchange rates prevailing when the assets were
acquired or the liabilities incurred. Revenues and expenses denominated in currencies
other than the United States dollar are translated at the average exchange rate prevailing
during the year, except for depreciation and amortization which are translated at the same
rates as those used in the translation of the corresponding assets. Foreign exchange gains
and losses resulting from the translation are included in the determination of net
earnings.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

49

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|2. | Significant
accounting policies (continued):
|-- | --------------------------------------------

| | (g) | Foreign
currency translation (continued):
| | --- | -----------------------------------------

| | Foreign
exchange gains included in the consolidated statements of operations for fiscal 2004
amounted to $10,279 (2003  $16,615; 2002  $3,315).
| | -------------------------------------------------------------------------------------------------------------------------------------------------

| | (h) | Stock-based
compensation plan:
| | --- | ------------------------------

| | Effective
January 1, 2004, the Company adopted the recommendations of the CICA which require
entities to account for employee stock options using the fair value based method beginning
January 1, 2004. Under the fair value based method, compensation cost is measured at fair
value at the date of grant and is expensed over the awards vesting period. In
accordance with one of the transitional options permitted under the standard, the
Corporation has retroactively applied the fair value based method to all employee stock
options granted on or after January 1, 2002 without restatement of prior periods. The
cumulative effect of the change in accounting policy of $548,164 has been recorded as an
increase in the opening deficit and additional paid-in capital at January 1, 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Prior
to January 1, 2004, the Corporation applied the fair value based method of accounting
prescribed by the CICA only to stock-based payments to non-employees, employee awards that
were direct awards of stock, call for settlement in cash or other assets, and to employee
stock appreciation rights; the Corporation applied the settlement method of accounting to
employee stock options. Under the settlement method, any consideration paid by employees
on the exercise of stock options was credited to share capital and no compensation cost
was recognized.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (i) | Income
taxes:
| | --- | -------------

| | The
Corporation accounts for income taxes using the asset and liability method of accounting
for income taxes. Under this method, future income tax assets and liabilities are
determined based on temporary differences (differences between the accounting
basis and the tax basis of the assets and liabilities), and are measured using the
currently enacted, or substantively enacted, tax rates and laws expected to apply when
these differences reverse. A valuation allowance is recorded against any future income tax
asset, if it is more likely than not that the asset will not be realized.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

50

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|2. | Significant
accounting policies (continued):
|-- | --------------------------------------------

| | (j) | Earnings
per share:
| | --- | -------------------

| | Basic
earnings per share are determined using the weighted average number of common shares
outstanding during the period. Diluted earnings per share are computed in a manner
consistent with basic earnings per share, except that the weighted average shares
outstanding are increased to include additional shares from the assumed exercise of
options and warrants, if dilutive. The number of additional shares is calculated by
assuming that outstanding options and warrants were exercised, and that the proceeds from
such exercises were used to acquire shares of common stock at the average market price
during the reporting period.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (k) | Guarantees:
| | --- | -----------

| | In
the normal course of business, the Company enters into various agreements that may contain
features that meet the definition of a guarantee. A guarantee is defined to be a contract
(including an indemnity) that contingently requires the Corporation to make payments to a
third party based on (i) changes in an underlying interest rate, foreign exchange rate,
equity or commodity instrument, index or other variable, that is related to an asset, a
liability or an equity security of the counterparty, (ii) failure of another party to
perform under an obligating agreement or (iii) failure of another party to pay its
indebtedness when due.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | A
liability is recorded when the Company considers probable that a payment relating to a
guarantee has to be made to the other party of the contract or agreements.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (l) | Use
of estimates:
| | --- | -----------------

| | The
preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and expenses
during the reporting periods. Significant areas requiring the use of management estimates
include estimating the useful lives of long-lived assets, including property and equipment
and intangible assets, as well as estimating the recoverability of research tax credits
receivable and future tax assets. The reported amounts and note disclosure are determined
to reflect the most probable set of economic conditions and planned courses of action.
Actual results could differ from those estimates.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

51

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|3. | Property
and equipment:
|-- | -----------------------

|                             
|-----------------------------
|2004                         
|Cost                         
|Laboratory equipment         
|Computer equipment           
|Office equipment and fixtures
|                             
|                             
|                             
|                             
|                             
|2003                         
|Cost                         
|Laboratory equipment         
|Computer equipment           
|Office equipment and fixtures
|                             
|                             
|                             

| | During
2004, the Corporation wrote down equipment of $89,254 that was no longer being used (2003
 $15,307; 2002  nil).
| | ------------------------------------------------------------------------------------------------------------------------

|4. | Patents
and intellectual property:
|-- | ----------------------------------

|                                     
|-------------------------------------
|2004                                 
|Cost                                 
|Patent costs                         
|Intellectual property rights acquired
|                                     
|                                     
|                                     

52

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|4. | Patents
and intellectual property (continued):
|-- | ----------------------------------------------

|                                     
|-------------------------------------
|2003                                 
|Cost                                 
|Patent costs                         
|Intellectual property rights acquired
|                                     
|                                     
|                                     

| | The
estimated aggregate amortization expense for each of the next five years is approximately
$400,000 per year.
| | ----------------------------------------------------------------------------------------------------------------

|5. | Notes
payable:
|-- | --------------

|                                                              
|--------------------------------------------------------------
|2004                                                          
|Note payable from a shareholder-related company, non-interest 
|bearing, due on or before January 14, 2005                    
|Notes payable, bearing interest at the prime rate plus 2%, due
|on or before July 31, 2005                                    
|                                                              
|                                                              
|                                                              

| | During
the year, the maturity dates of notes payable in the amount of $500,000 outstanding at
December 31, 2003 were extended from July 31, 2004 to June 30, 2005. In addition, the
Corporation issued a note payable in the amount of $100,000, which was repaid on January
14, 2005.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Non-controlling
interest:
|-- | -------------------------

| | Non-controlling
interest includes redeemable, convertible preferred shares of Serex in the amount of
$800,000. Up to 50% of the preferred shares are redeemable at any time at the option of
the preferred shareholders for their issue price, subject to holders with at least 51% of
the face value of the preferred shares asking for redemption, and sufficient funds being
available in Serex. The preferred shares are also convertible into common shares of Serex
at a price of $3.946 per share.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

53

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|6. | Non-controlling
interest (continued):
|-- | -------------------------------------

| | The
long-term receivables are due from the preferred shareholders and will be settled when
the preferred shares are redeemed.
| | -----------------------------------------------------------------------------------------------------------------------------

|7. | Share
capital:
|-- | --------------

|                                                   
|---------------------------------------------------
|2004                                               
|Authorized:                                        
|An unlimited number of common shares               
|Issued and outstanding:                            
|25,504,062 common shares (2003 - 24,401,159 shares)
|                                                   

| | (a) | Changes
in the Corporations outstanding common shares are presented below:
| | --- | ---------------------------------------------------------------------------

|                                                           
|-----------------------------------------------------------
|Shares                                                     
|Issued and outstanding, December 31, 2002                  
|Issue of common shares under common stock private          
|purchase agreements (b) (c)                                
|Issue of common shares pursuant to exercise of warrants (d)
|                                                           
|Balance, December 31, 2003                                 
|Issue of common shares for cash under                      
|common stock private purchase agreements (b) (c)           
|Issued pursuant to the exercise of warrants (b):           
|For cash                                                   
|Ascribed value from other capital and                      
|cashless exercise                                          
|                                                           
|Balance, December 31, 2004                                 
|                                                           

54

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|7. | Share
capital (continued):
|-- | --------------------------

| | (b) | Private
placements and other:
| | --- | -----------------------------

| | In
2004, the Corporation completed private placements for 1,080,462 common shares and
received aggregate proceeds of $3,670,000. In 2003, the Corporation completed private
placements for 1,280,205 common shares and received aggregate proceeds of $3,890,000. The
share issue costs related to these private placements have been charged against the
deficit.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2004, the Corporation issued 1,090 common shares upon the exercise of 1,090 Series J
warrants. In addition, the Corporation issued 16,953 common shares pursuant to a
cashless exercise of 109,879 Series G warrants and 4,398 common shares pursuant to a
cashless exercise of 22,061 Series J warrants. The value credited to share capital of
$375,717 represents the ascribed value of $281,054 of the warrants exercised previously
recorded by the Corporation on the consolidated balance sheet, as well as the fair value
of $94,663 of the 21,351 common shares issued to the warrant holders upon exercise.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
fair value of the common shares issued to settle the exercise of the warrants was recorded
as a decrease to additional paid-in capital.
| | -------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Common
Stock Private Purchase Agreement:
| | --- | ----------------------------------------

| | In
August 2003, the Corporation entered into a Common Stock Private Purchase Agreement
with an investment company (the Purchaser) that established the terms and
conditions for the purchase of common shares by the Purchaser. In October 2004, this
agreement was terminated and a new agreement was concluded with the Purchaser. In general,
the Corporation can, at its discretion, require the Purchaser to purchase up to $13
million (previously $12 million) of common shares over a twenty-four-month period based on
notices given by the Corporation.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
number of shares to be issued in connection with each notice shall be equal to the amount
specified in the notice, divided by 97% of the average price of the Corporations
common shares for the five days preceding the giving of the notice. The maximum amount of
each notice is $500,000 and the minimum amount is $150,000. The Corporation may terminate
the agreement before the 24-month term, if it has issued at least $8 million of
common shares under the agreement.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In
2004, the Corporation issued 1,080,462 common shares to the Purchaser for aggregate
proceeds of $3,670,000 under the agreements. At December 31, 2004, the Corporation can
require the Purchaser to purchase up to $12,150,000 of common shares over the remaining
21 months of the agreement.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

55

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|7. | Share
capital (continued):
|-- | --------------------------

| | (d) | Warrants:
| | --- | ---------

| | The
Corporation has issued the following warrants to purchase common shares:
| | ----------------------------------------------------------------------------

|        
|--------
|Warrants
|Series E
|Series F
|Series G
|Series H
|Series I
|Series J
|        
|        
|        

| | (e) | Stock
options:
| | --- | --------------

| | The
Corporation has established a stock option plan (the Plan) for its key
employees, its officers and directors, and certain consultants. The Plan is administered
by the Board of Directors of the Corporation. The Board may from time to time designate
individuals to whom options to purchase common shares of the Corporation may be granted,
the number of shares to be optioned to each, and the option price per share. The option
price per share cannot involve a discount to the market price at the time the option is
granted. The total number of shares to be optioned to any one individual cannot exceed 5%
of the total issued and outstanding shares, and the maximum number of shares which may be
optioned under the Plan cannot exceed 2,500,000 common shares without shareholder
approval. Options under the Plan expire ten years after grant and vest either immediately
or over periods up to five years.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

56

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|7. | Share
capital (continued):
|-- | --------------------------

| | (e) | Stock
options (continued):
| | --- | --------------------------

| | Changes
in outstanding options were as follows for the last two fiscal periods:
| | -------------------------------------------------------------------------------

|                          
|--------------------------
|Number                    
|Balance, December 31, 2002
|Granted                   
|Expired                   
|                          
|Balance, December 31, 2003
|                          
|Expired                   
|                          
|Balance, December 31, 2004
|                          

| | At
December 31, 2004, options outstanding and exercisable were as follows:
| | --------------------------------------------------------------------------

|                   
|-------------------
|Options outstanding
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   
|                   

57

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|7. | Share
capital (continued):
|-- | --------------------------

| | (f) | Changes
in warrants and options and additional paid-in           capital were
as follows:
| | --- | ---------------------------------------------------------------------------------------------

|                                                  
|--------------------------------------------------
|Warrants and
options                              
|Balance, December 31, 2003 and 2002               
|Stock-based compensation:                         
|Initial adoption of fair value method (note 2 (h))
|Current year's expense                            
|Ascribed value to share capital                   
|                                                  
|Balance, December 31, 2004                        
|                                                  

|8. | Commitments
and contingencies:
|-- | ------------------------------

| | (a) | Operating
leases:
| | --- | -----------------

| | Minimum
lease payments under operating leases that were entered into by the Corporation for the
next five years are as follows:
| | -------------------------------------------------------------------------------------------------------------------------------

|    
|----
|
|2005
|2006
|2007
|2008
|2009
|    
|    
|    

58

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|8. | Commitments
and contingencies (continued):
|-- | ------------------------------------------

| | (b) | Contingencies:
| | --- | --------------

| | Litigation:
| | -----------

| | A
shareholder served the Corporation with a Statement of Claim filed with the Ontario
Superior Court of Justice claiming to be entitled to the issuance of 388,797 additional
shares in accordance with repricing provisions contained in a 2000 private placement
agreement and to damages of $4,000,000 for lost opportunity to sell these shares. In
October 2003, the Corporation filed an action against the shareholder, certain private
investors, their agents and others in the United States District Court of the Southern
District of New York. The complaint alleged that the defendants, inter alia,
violated federal securities laws, breached their contractual commitments and/or breached
their fiduciary duties toward the Corporation.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | During
2004, the Corporation reached an agreement to settle this litigation in Ontario and in the
United States District Court of the Southern District of New York with a shareholder and
certain private investors, their agents and others. The agreement resulted in the
dismissal of all outstanding actions between the parties. The terms of the settlement are
confidential, but do not require the Corporation to issue further shares or pay any
damages or significant legal fees.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Demand
for arbitration:
| | -----------------------

| | In
March 2002, a former employee filed a demand for arbitration with the American Arbitration
Association concerning the termination of her employment with the Corporation. The
employee was claiming damages of up to $498,000 plus attorneys fees and costs, based
upon alleged violations of the New Jersey law and breach of an employment agreement.
Subsequently, in October 2002, the former employee filed a complaint in the New Jersey
Superior Court concerning the termination of her employment with the Corporation. The
complaint claimed unspecified damages.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
Corporation reached a confidential settlement agreement in this litigation in New Jersey
with the former employee. The settlement of this claim was recorded in the accounts in the
second quarter.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

59

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|9. | Income
taxes:
|-- | -------------

| | Details
of the components of income taxes are as follows:
| | ---------------------------------------------------------

|                                           
|-------------------------------------------
|2004                                       
|Loss before income taxes:                  
|Canadian operations                        
|U.S. operations                            
|                                           
|                                           
|Basic income tax rate                      
|                                           
|Income tax recovery at statutory rates     
|Adjustments in income taxes resulting from:
|Non-recognition of losses and other        
|unclaimed deductions                       
|                                           
|Income taxes                               
|                                           

60

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|9. | Income
taxes (continued):
|-- | -------------------------

| | The
income tax effect of temporary differences that give rise to the net future tax asset is
presented below:
| | -------------------------------------------------------------------------------------------------------------

|                                                
|------------------------------------------------
|2004                                            
|Future tax assets:                              
|Non-capital losses                              
|Scientific research and experimental development
|expenditures                                    
|Foreign exchange                                
|Property and equipment and patents              
|Share issue costs                               
|                                                
|                                                
|Less valuation allowance                        
|                                                
|                                                
|Future tax liabilities:                         
|Intellectual property rights                    
|Investment tax credits                          
|Other                                           
|                                                
|                                                
|                                                
|Net future tax asset                            
|                                                

| | In
assessing the realizability of future tax assets, management considers whether it is more
likely than not that some portion or all of the future tax assets will not be realized.
The ultimate realization of future tax assets is dependent upon the generation of future
taxable income and tax planning strategies. The generation of future taxable income is
dependent on the successful commercialization of its products and technologies.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

61

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|9. | Income
taxes (continued):
|-- | -------------------------

| | The
Corporation has non-capital losses carried forward and accumulated scientific research and
development expenditures which are available to reduce future years taxable income.
These expire as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                 
|-------------------------------------------------
|Federal                                          
|Non-capital losses:                              
|2005                                             
|2006                                             
|2007                                             
|2008                                             
|2009                                             
|2010                                             
|2011                                             
|Scientific research and development expenditures:
|(Indefinitely)                                   
|                                                 

| | The
Corporation also has investment tax credits available in the amount of approximately
$637,000 to reduce future years Canadian federal taxes payable. These credits expire
as follows:
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    
|----
|
|2005
|2006
|2007
|2008
|2009
|2010
|2011
|2012
|2013
|2014
|    
|    
|    

62

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|9. | Income
taxes (continued):
|-- | -------------------------

| | In
addition, the Corporations US subsidiaries have losses carried forward of
approximately $9,723,000 which expire as follows:
| | -------------------------------------------------------------------------------------------------------------------------------

|    
|----
|
|2010
|2011
|2012
|2018
|2019
|2020
|2021
|2022
|2023
|2024
|    
|    
|    

|10. | Earnings
per share:
|--- | -------------------

| | (a) | Basic
and diluted earnings per share:
| | --- | -------------------------------------

| | The
reconciliation between basic and diluted earnings per share is as follows:
| | ------------------------------------------------------------------------------

|                                
|--------------------------------
|2004                            
|Basic:                          
|Basic weighted average number of
|common shares outstanding       
|                                
|Basic loss per share            
|                                
|Diluted:                        
|Basic weighted average number   
|of common shares outstanding    
|Plus impact of stock options and
|warrants (1)                    
|                                
|Diluted common shares           
|                                
|Diluted loss per share          
|                                

| | (1) | The
impact of these stock options and warrants is anti-dilutive because the
Corporation incurred losses in 2004, 2003 and 2002.
| | --- | -------------------------------------------------------------------------------------------------------------------------------

63

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|10. | Earnings
per share (continued):
|--- | -------------------------------

| | (a) | Basic
and diluted earnings per share (continued):
| | --- | -------------------------------------------------

| | Excluded
from the above calculations are 409,500 stock options and 293,334 warrants which were
deemed to be anti-dilutive because the exercise prices were greater than the average
market price of the common shares (2003  1,623,000 options and 453,334 warrants;
2002  1,186,500 options and 453,334 warrants).
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Stock-based
compensation:
| | --- | -------------------------

| | No
options were granted by the Corporation in 2004. The Corporation recorded total
stock-based compensation of $16,220 in 2004, which is included in marketing expenses on
the consolidated statement of operations. Stock-based compensation in fiscal 2004 relates
to the amortization of compensation cost for options granted in 2003 over the vesting
periods.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | If
the fair value-based accounting method had been used to account for and measure
stock-based compensation costs relating to exempt options and warrants issued to employees
after January 1, 2002, the net loss and related loss per share figures would be as
follows:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                             
|---------------------------------------------
|2003                                         
|Reported net loss                            
|Pro forma adjustments to compensation expense
|                                             
|Pro forma net loss                           
|                                             
|Pro forma loss per share:                    
|Basic                                        
|Diluted                                      
|                                             

| | The
weighted average fair value of each option granted is estimated on the date of grant using
the Black-Scholes pricing model with the following weighted average assumptions:
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                       
|-----------------------
|2004                   
|Risk-free interest rate
|Expected volatility    
|Expected life in years 
|Dividend yield         
|                       

64

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|10. | Earnings
per share (continued):
|--- | -------------------------------

| | (b) | Stock-based
compensation (continued):
| | --- | -------------------------------------

| | The
following table summarizes the weighted average grant-date fair value per share for
options granted during the year ended December 31, 2003:
| | ------------------------------------------------------------------------------------------------------------------------------------------------

|                                       
|---------------------------------------
|Year                                   
|Exercise price per share equal to      
|market price per share at date of grant
|Exercise price per share greater than  
|market price per share at date of grant
|                                       

| | Dividend
yield was excluded from the calculation, since it is the present policy of the Corporation
to retain all earnings to finance operations.
| | -------------------------------------------------------------------------------------------------------------------------------------------------

|11. | Financial
instruments:
|--- | ----------------------

| | (a) | Foreign
currency risk management:
| | --- | ---------------------------------

| | Effective
January 1, 2000, the Corporation adopted the US dollar as its measurement currency because
a substantial portion of revenues, expenses, assets and liabilities of its Canadian and US
operations are denominated in US dollars. The Canadian operation also has transactions
denominated in Canadian dollars, principally relating to salaries and rent. Fluctuations
in the currency used for the payment of the Corporations expenses denominated in
currencies, other than the US dollar, could cause unanticipated fluctuations in the
Corporations operating results. The Corporation does not engage in the use of
derivative financial instruments to manage its currency exposures.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Fair
value disclosure:
| | --- | ----------------------

| | Fair
value estimates are made as of a specific point in time using available information about
the financial instrument. These estimates are subjective in nature and often cannot be
determined with precision.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

65

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|11. | Financial
instruments (continued):
|--- | ----------------------------------

| | (b) | Fair
value disclosure (continued):
| | --- | ----------------------------------

| | The
Corporation has determined that the carrying value of its short-term financial assets and
liabilities approximates their fair value due to the immediate or short-term maturity of
these financial instruments. The fair value of the long-term receivables cannot be
determined because settlement is tied to the redemption of the preferred shares. See note
6.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Credit
risk:
| | --- | ------------

| | Credit
risk results from the possibility that a loss may occur from the failure of another party
to perform according to the terms of the contract. Financial instruments that potentially
subject the Corporation to concentrations of credit risk consist primarily of cash and
accounts receivable. Cash is maintained with a high-credit quality financial institution.
For accounts receivable, the Corporation performs periodic credit evaluations and
typically does not require collateral. Allowances are maintained for potential credit
losses consistent with the credit risk, historical trends, general economic conditions and
other information.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | Interest
rate risk:
| | --- | -------------------

| | The
Companys exposure to interest rate risk is as follows:
| | -----------------------------------------------------------

|             
|-------------
|
|Cash         
|Notes payable
|             

66

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences:
|--- | ------------------------------------

| | (a) | Consolidated
statements of earnings:
| | --- | ------------------------------------

| | The
reconciliation of earnings reported in accordance with Canadian GAAP and with U.S. GAAP
is as follows:
| | ----------------------------------------------------------------------------------------------------------

|                                  
|----------------------------------
|2004                              
|Net loss, Canadian GAAP           
|Adjustments:                      
|Stock-based compensation - options
|granted to employees (b) (i)      
|Stock-based compensation - options
|granted to non-employees (b) (ii) 
|                                  
|Net loss, U.S. GAAP               
|                                  
|Loss per share, U.S. GAAP         
|                                  

| | The
weighted average number of common shares outstanding for purposes of determining basic and
diluted loss per share are the same amounts as those for Canadian GAAP purposes.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Consolidated
shareholders equity:
| | --- | ----------------------------------

| | The
reconciliation of shareholders equity reported in accordance with Canadian GAAP and
with U.S. GAAP is as follows:
| | ----------------------------------------------------------------------------------------------------------------------

|                                   
|-----------------------------------
|2004                               
|Shareholders' equity, Canadian GAAP
|Adjustments:                       
|Stock-based compensation - options 
|granted to non-employees (ii):     
|Cumulative compensation expense    
|Additional paid-in capital         
|Change in reporting currency (iii) 
|                                   
|                                   
|                                   
|Shareholders' equity, U.S. GAAP    
|                                   

67

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (b) | Consolidated
shareholders equity (continued):
| | --- | ----------------------------------------------

| | (i) | For
US GAAP purposes, the Corporation has elected to follow the intrinsic value
          method of accounting under APB 25, Accounting for Stock Issued to
          Employees, in accounting for stock options granted to employees and
          directors. Under the intrinsic value method, compensation cost is recognized
for           the difference between the quoted market price of the stock at the grant
date           and the amount the individual must pay to acquire the stock. For Canadian
          purposes, the Corporation uses the fair value method of accounting for stock
          options granted to employees after January 1, 2004.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii) | In
accordance with FAS 123, Accounting for Stock-Based Compensation,
          compensation related to the stock options granted to non-employees prior to
          January 1, 2002 has been recorded in the accounts based on the fair value
          of the stock options at the grant date. The fair value of the stock options was
          estimated as described in note 12 (d) (2).
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (iii) | Change
in reporting currency:
| | ----- | -----------------------------

| | The
Corporation adopted the US dollar as its reporting currency effective January 1, 2000.
For Canadian GAAP purposes, the financial information for 1999 has been translated into
US dollars at the December 31, 1999 exchange rate. For United States GAAP reporting
purposes, assets and liabilities for all years presented have been translated into US
dollars at the ending exchange rate for the respective year, and the statement of
earnings at the average exchange rate for the respective year.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Consolidated
comprehensive income:
| | --- | ----------------------------------

| | FAS
130, Reporting Comprehensive Income, requires the Corporation to report and display
certain information related to comprehensive income for the Corporation. There were no
adjustments to the net loss under US GAAP required to reconcile to the comprehensive loss.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

68

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (d) | Other
disclosures required by United States GAAP:
| | --- | -------------------------------------------------

| | (1) | Development
stage company:
| | --- | --------------------------

| | The
Corporation is in the process of developing unique patented products which are subject to
approval by the regulatory authorities. The Corporation has had limited revenues to date
on the sale of its products under development. Accordingly, the Corporation is a
development stage company as defined in Statement of Financial Accounting Standards No. 7, and the following additional disclosures under US GAAP are provided:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                              
|------------------------------------------------------------------------------
|Cumulative
since the date of
inception of
the Corporation
to December 31,
2004
|Revenues:                                                                     
|Sales                                                                         
|Interest revenue                                                              
|License revenue                                                               
|Research contract                                                             
|Expenses:                                                                     
|Gross research and development expenditures                                   
|Other expenses                                                                
|Cash inflows (outflows):                                                      
|Operating activities                                                          
|Investing activities                                                          
|Financing activities                                                          
|                                                                              

69

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (d) | Other
disclosures required by United States GAAP (continued):
| | --- | -------------------------------------------------------------

| | (1) | Development
stage company (continued):
| | --- | --------------------------------------

| | The
statement of shareholders equity since date of inception under US GAAP is presented
below:
| | -----------------------------------------------------------------------------------------------

|                                 
|---------------------------------
|Number of
shares                 
|Year ended July 31, 1990:        
|Common shares issued             
|Net loss                         
|                                 
|Balance, July 31, 1990           
|Year ended July 31, 1991:        
|Net loss                         
|Cumulative translation adjustment
|                                 
|Balance, July 31, 1991           
|Year ended July 31, 1992:        
|Common shares issued             
|Net loss                         
|Cumulative translation adjustment
|                                 
|Balance, July 31, 1992           
|Year ended July 31, 1993:        
|Common shares issued             
|Common shares cancelled          
|Net loss                         
|Cumulative translation adjustment
|                                 
|Balance, July 31, 1993           
|Year ended July 31, 1994:        
|Common shares issued             
|Net loss                         
|Cumulative translation adjustment
|                                 
|Balance, July 31, 1994           
|Year ended July 31, 1995:        
|Common shares issued             
|Net loss                         
|Cumulative translation adjustment
|                                 
|Balance, July 31, 1995           
|carried forward                  

70

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (d) | Other
disclosures required by United States GAAP (continued):
| | --- | -------------------------------------------------------------

| | (1) | Development
stage company (continued):
| | --- | --------------------------------------

| | The
statement of shareholders equity since date of inception under US GAAP is presented
below (continued):
| | -----------------------------------------------------------------------------------------------------------

|                                 
|---------------------------------
|Number of
shares                 
|Balance, July 31, 1995           
|brought forward                  
|Period ended December 31, 1995:  
|Adjustment necessary to          
|increase the number of           
|common shares                    
|                                 
|Adjusted number of               
|common shares                    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Cumulative translation adjustment
|                                 
|Balance, December 31, 1995       
|Year ended December 31, 1996:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|Cumulative translation adjustment
|                                 
|Balance, December 31, 1996       
|Year ended December 31, 1997:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Capital stock subscription       
|Stock-based compensation         
|Cumulative translation adjustment
|                                 
|Balance, December 31, 1997       
|                                 
|Year ended December 31, 1998:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|Cumulative translation adjustment
|                                 
|Balance, December 31, 1998       
|carried forward                  

71

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NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (d) | Other
disclosures required by United States GAAP (continued):
| | --- | -------------------------------------------------------------

| | (1) | Development
stage company (continued):
| | --- | --------------------------------------

| | The
statement of shareholders equity since date of inception under US GAAP is presented
below (continued):
| | -----------------------------------------------------------------------------------------------------------

|                                 
|---------------------------------
|Number of
shares                 
|Balance, December 31, 1998       
|brought forward                  
|Year ended December 31, 1999:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|Cumulative translation adjustment
|                                 
|Balance, December 31, 1999       
|Year ended December 31, 2000:    
|Common shares issued             
|Warrants and options             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|                                 
|Balance, December 31, 2000       
|Year ended December 31, 2001:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|                                 
|Balance, December 31, 2001       
|Year ended December 31, 2002:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|                                 
|Balance, December 31, 2002       
|Year ended December 31, 2003:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|                                 
|Balance, December 31, 2003       
|Year ended December 31, 2004:    
|Common shares issued             
|Net loss                         
|Share issue costs                
|Stock-based compensation         
|                                 
|Balance, December 31, 2004       
|                                 

72

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NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (d) | Other
disclosures required by United States GAAP (continued):
| | --- | -------------------------------------------------------------

| | (2) | Stock-based
compensation:
| | --- | -------------------------

| | For
US GAAP purposes, the Corporation applies APB Opinion 25, Accounting for Stock
Issued to Employees, in accounting for its stock option plan, and, accordingly, no
compensation cost is recognized for stock options granted to employees for US GAAP
purposes. As explained in note 12 (b), compensation cost has been recognized for stock
options granted to non-employees. Had compensation cost been determined for stock options
granted to employees based on the fair value at the grant dates for awards under the plan
consistent with the method of FASB Statement 123, Accounting for Stock-Based
Compensation, the Corporations net earnings and loss per share would have
been adjusted to the pro-forma amounts indicated below for US GAAP:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|              
|--------------
|2004          
|Net loss      
|              
|              
|              
|              
|              
|              
|              
|              
|Loss per share
|              
|              

| | The
fair value of each option grant was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted average assumptions: risk-free interest
rate of: 2003  4.27%; 2002  4.49%, dividend yield of 0%, expected volatility
of: 2003  40%; 2002  54%, and expected life of 5 years.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

73

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NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|12. | Canadian/U.S.
Reporting Differences (continued):
|--- | ------------------------------------------------

| | (e) | Recent
accounting pronouncements:
| | --- | ---------------------------------

| | The
Financial Accounting Standards Board (FASB) recently issued FAS 150, Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity, FAS 151, Inventory Costs and FAS 153, Exchanges of Non-Monetary
Assets. The Company does not expect the adoption of these standards to have a material
effect on its financial statements.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13. | Segment
disclosures:
|--- | --------------------

| | The
Corporation operates in one reporting segment  the research and development of
products for the treatment of Alzheimers and other diseases. Geographic segment
information is as follows:
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                          
|----------------------------------------------------------
|Canada                                                    
|Revenues:                                                 
|2004                                                      
|2003                                                      
|2002                                                      
|Net loss:                                                 
|2004                                                      
|2003                                                      
|2002                                                      
|Property and equipment, patents and intellectual property:
|2004                                                      
|2003                                                      
|Total assets:                                             
|2004                                                      
|2003                                                      
|                                                          

74

---

NYMOX PHARMACEUTICAL CORPORATION
Notes to Consolidated Financial Statements

Years ended December 31, 2004, 2003
and 2002 (in US dollars)

---

|13. | Segment
disclosures (continued):
|--- | --------------------------------

| | Major
customers:
| | ----------------

| | Customers
that accounted for greater than 10% of revenues were as follows:
| | --------------------------------------------------------------------------

|          
|----------
|2004      
|Customer A
|Customer B
|Customer C
|Customer D
|          

|14. | Comparative
figures:
|--- | --------------------

| | Certain
of the comparative figures have been reclassified to conform to the presentation adopted
in the current year.
| | ---------------------------------------------------------------------------------------------------------------------

|15. | Subsequent
events:
|--- | ------------------

| | Common
Stock Private Purchase Agreement:
| | ----------------------------------------

| | (a) | On
February 7, 2005, the Corporation issued 82,474 common shares for aggregate
               proceeds of $240,000 under the Common Stock Private Purchase Agreement
referred                to in note 7 (c).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | On
February 22, 2005, the Corporation issued 50,676 common shares for aggregate
               proceeds of $150,000 under the Common Stock Private Purchase Agreement
referred                to in note 7 (c).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

75

---

# ITEM 9. OFFER AND
LISTING DETAILS

Nymoxs common shares trade on
the NASDAQ Stock Market. Nymoxs common shares traded on the NASDAQ National Market
from December 1, 1997 until September 16, 1999 when they began trading on the NASDAQ
SmallCap Market. Nymoxs common shares also traded on the Montreal Exchange from
December 18, 1995 until November 19, 1999.

The following tables set out the high
and low reported trading prices of the common shares on the NASDAQ Stock Market during the
periods indicated.

# Annual High and Low
Market Prices  Past Five Years

|YEAR | ANNUAL HIGH | ANNUAL LOW
|---- | ----------- | ----------
|2000 | $10.563     | $1.063    
|2001 | $4.910      | $1.750    
|2002 | $5.750      | $2.800    
|2003 | $4.400      | $2.360    
|2004 | $5.250      | $1.890    

# Quarterly High and Low
Market Prices  Past Two Years

|YEAR | QUARTERLY PERIOD | HIGH SALES PRICE | LOW SALES PRICE
|---- | ---------------- | ---------------- | ---------------
|2003 | 1st Quarter      | $4.400           | $3.310         
|     | 2nd Quarter      | $3.990           | $2.620         
|     | 3rd Quarter      | $3.450           | $2.390         
|     | 4th Quarter      | $3.490           | $2.360         
|2004 | 1st Quarter      | $5.250           | $3.460         
|     | 2nd Quarter      | $4.680           | $2.540         
|     | 3rd Quarter      | $3.670           | $1.890         
|     | 4th Quarter      | $3.430           | $1.970         

# Monthly High and Low
Market Prices  Most Recent Six Months

|DATE                               | MONTHLY HIGH | MONTHLY LOW
|---------------------------------- | ------------ | -----------
|January, 2005                      | $3.160       | $2.500     
|February, 2005                     | $3.250       | $2.750     
|March, 2005                        | $2.990       | $1.960     
|April, 2005                        | $2.640       | $2.000     
|May, 2005                          | $2.990       | $2.430     
|June, 2005 (through June 23, 2005) | $2.650       | $2.330     

# ITEM 10. ADDITIONAL
INFORMATION

# Memorandum and Articles
of Association

Bylaws And Articles Of
Incorporation

The companys Articles of
Incorporation as amended, which we refer to as our articles of incorporation, are on file
with the Corporations Directorate of Industry Canada under Corporation Number 315235-9.
Our articles of incorporation do not include a stated purpose and do not place any
restrictions on the business that the company may carry on.

76

---

Directors

A director of our company need not be
a shareholder. In accordance with our bylaws and the Canada Business Corporations Act, at
least 25% of our directors must be residents of Canada. In order to serve as a director, a
person must be a natural person at least 18 years of age, of sound mind and not bankrupt.
Neither our articles of incorporation or by-laws, nor the Canada Business Corporations
Act, impose any mandatory retirement requirements for directors.

Our bylaws and the Canada Business
Corporations Act authorize the directors from time to time to determine the remuneration
for their services. There is no requirement for an independent quorum.

A director who is a party to, or who
is a director or officer of or has a material interest in any person who is a party to, a
material contract or transaction or proposed material contract or transaction with our
company must disclose to the company the nature and extent of his or her interest at the
time and in the manner provided by the Canada Business Corporations Act. The Canada
Business Corporations Act prohibits such a director from voting on any resolution to
approve the contract or transaction unless the contract or transaction:

| |  | is
an  arrangement  by way of security  for money lent to or  obligations  undertaken  by
the  director for the benefit of the                   Company or an affiliate;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | relates
primarily to his or her remuneration as a director, officer, employee or agent of the
Company or an affiliate;
| | - | ----------------------------------------------------------------------------------------------------------------------

| |  | is
for indemnity or insurance for director's liability as permitted by the Act; or
| | - | ----------------------------------------------------------------------------------

| |  | is
with an affiliate.
| | - | ---------------------

Our board of directors may, on behalf
of the Company and without authorization of our shareholders:

| |  | borrow
money upon the credit of the Company;
| | - | --------------------------------------------

| |  | issue,
reissue, sell or pledge debt obligations of the Company;
| | - | ---------------------------------------------------------------

| |  | give
a guarantee on behalf of the Company to secure performance of an obligation of any
person; and
| | - | ---------------------------------------------------------------------------------------------------

| |  | mortgage,
hypothecate, pledge or otherwise create a security interest in all or any property of the
Company, owned or subsequently acquired, to secure any obligation of the Company.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Canada Business Corporations Act
prohibits the giving of a guarantee to any shareholder, director, officer or employee of
the Company or of an affiliated corporation or to an associate of any such person for any
purpose or to any person for the purpose of or in connection with a purchase of a share
issued or to be issued by the Company or its affiliates, where there are reasonable
grounds for believing that the Company is or, after giving the guarantee, would be unable
to pay its liabilities as they become due, or the realizable value of the Companys
assets in the form of assets pledged or encumbered to secure a guarantee, after giving the
guarantee, would be less than the aggregate of the Companys liabilities and stated
capital of all classes.

These borrowing powers may be varied
by the Companys bylaws or its articles of incorporation. However, our bylaws and
articles of incorporation do not contain any restrictions on or variations of these
borrowing powers.

Common Shares

Our articles of incorporation
authorize the issuance of an unlimited number of common shares. They do not authorize the
issuance of any other class of shares.

77

---

The holders of the common shares of
our Company are entitled to receive notice of and to attend all meetings of the
shareholders of our Company and have one vote for each common share held at all meetings
of the shareholders of our Company. Our directors are elected at each annual meeting of
shareholders and do not stand for reelection at staggered intervals.

The holders of common shares are
entitled to receive dividends and the Company will pay dividends, as and when declared by
our board of directors, out of moneys properly applicable to the payment of dividends, in
such amount and in such form as our board of directors may from time to time determine,
and all dividends which our board of directors may declare on the common shares shall be
declared and paid in equal amounts per share on all common shares at the time outstanding.

In the event of the dissolution,
liquidation or winding-up of the Company, whether voluntary or involuntary, or any other
distribution of assets of the Company among its shareholders for the purpose of winding up
its affairs, the holders of the common shares will be entitled to receive the remaining
property and assets of the Company.

There are no redemption provisions
and no liability for further capital calls associated with the Companys common
stock.

Action Necessary To
Change Rights Of Shareholders

In order to change the rights of our
shareholders, we would need to amend our articles of incorporation to effect the change.
Such an amendment would require the approval of holders of two-thirds of the shares cast
at a duly called special meeting. For certain amendments such as those creating of a class
of preferred shares, a shareholder is entitled to dissent in respect of such a resolution
amending our articles and, if the resolution is adopted and the Company implements such
changes, demand payment of the fair value of its shares.

Meetings Of Shareholders

An annual meeting of shareholders is
held each year for the purpose of considering the financial statements and reports,
electing directors, appointing auditors and for the transaction of other business as may
be brought before the meeting. The board of directors has the power to call a special
meeting of shareholders at any time.

Notice of the time and place of each
meeting of shareholders must be given not less than 21 days, nor more than 50 days, before
the date of each meeting to each director, to the auditor and to each shareholder who at
the close of business on the record date for notice is entered in the securities register
as the holder of one or more shares carrying the right to vote at the meeting. Notice of
meeting of shareholders called for any other purpose other than consideration of the
minutes of an earlier meeting, financial statements and auditors report, election of
directors and reappointment of the incumbent auditor, must state the nature of the
business in sufficient detail to permit the shareholder to form a reasoned judgment on and
must state the text of any special resolution or by-law to be submitted to the meeting.

The only persons entitled to be
present at a meeting of shareholders are those entitled to vote, the directors of the
Company and the auditor of the Company. Any other person may be admitted only on the
invitation of the chairman of the meeting or with the consent of the meeting. In
circumstances where a court orders a meeting of shareholders, the court may direct how the
meeting may be held, including who may attend the meeting.

Limitations On Right To
Own Securities

78

---

Neither Canadian law nor our articles
or by-laws limit the right of a nonresident to hold or vote our shares, other than as
provided in the Investment Canada Act (the Investment Act), as amended by the
World Trade Organization Agreement Implementation Act. The Investment Act generally
prohibits implementation of a direct reviewable investment by an individual, government or
agency thereof, corporation, partnership, trust or joint venture that is not a
Canadian, as defined in the Investment Act (a non-Canadian),
unless, after review, the minister responsible for the Investment Act is satisfied that
the investment is likely to be of net benefit to Canada. An investment in our shares by a
non-Canadian (other than a WTO Investor, as defined below) would be reviewable
under the Investment Act if it were an investment to acquire direct control of our
company, and the value of the assets of our company were CDN$5.0 million or more (provided
that immediately prior to the implementation of the investment the Company was not
controlled by WTO Investors). An investment in our shares by a WTO Investor (or by a
non-Canadian other than a WTO Investor if, immediately prior to the implementation of the
investment the Company was controlled by WTO Investors) would be reviewable under the
Investment Act if it were an investment to acquire direct control of the Company and the
value of the assets of the Company equaled or exceeded a specified amount (the
Review Threshold). The Review Threshold in 2002 was CDN$218 million, in 2003
CDN$223 million and in 2004 CDN$237 million. For 2005 the Review Threshold is CDN$250
million. A non-Canadian, whether a WTO Investor or otherwise, would be deemed to acquire
control of the Company for purposes of the Investment Act if he or she acquired a majority
of our shares. The acquisition of less than a majority, but at least one-third of our
shares, would be presumed to be an acquisition of control of the Company, unless it could
be established that we were not controlled in fact by the acquirer through the ownership
of our shares. In general, an individual is a WTO Investor if he or she is a
national of a country (other than Canada) that is a member of the World Trade
Organization (WTO Member) or has a right of permanent residence in a WTO
Member. A corporation or other entity will be a WTO Investor if it is a
WTO investor-controlled entity, pursuant to detailed rules set out in the
Investment Act. The United States is a WTO Member. Certain transactions involving our
shares would be exempt from the Investment Act, including:

|(a) | an
acquisition of our shares if the acquisition were made in the ordinary course
               of that persons business as a trader or dealer in securities;
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

|(b) | an
acquisition of control of the Company in connection with the foreclosure of a
               security interest granted for a loan or other assistance and not for any
purpose                related to the provisions the Investment Act; and
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(c) | an
acquisition of control of the Company by reason of an amalgamation,
               consolidation or corporate reorganization, following which the direct or
               indirect control in fact of the Company, through ownership of voting
interests,                remains unchanged.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Change of Control

There are no provisions of our bylaws
or articles of incorporation that would have an effect of delaying, deferring or
preventing a change in control of the Company and that would operate only with respect to
a merger, acquisition or corporate restructuring involving the Company. Our bylaws do not
contain a provision governing the ownership threshold above which shareholder ownership
must be disclosed.

# Material Contracts

The following is a summary of the
material contracts to which the Company is a party, for the two years ended June 22, 2005
..

|1. | The
Common Stock Private Purchase Agreement between Nymox Pharmaceutical
               Corporation and Lorros-Greyse Investments Limited October 6, 2004. This
               agreement established a financing commitment for $13 million over a
twenty-four                month period starting October 6, 2004. The terms and
conditions of this                commitment are further described in Liquidity and
Capital Resources               section in Item 5 of this report.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

79

---

|2. | The
Common Stock Private Purchase Agreement between Nymox Pharmaceutical
               Corporation and Lorros-Greyse Investments Limited August 25, 2003. This
               agreement established a financing commitment for $12 million over a
twenty-four                month period starting August 25, 2003. This agreement was
replaced by the new                agreement above on October 6, 2004.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | The
Common Stock Private Purchase Agreement between Nymox Pharmaceutical
               Corporation and Lorros-Greyse Investments Limited January 27, 2003. This
               agreement established a financing commitment for $5 million over a
twenty-four                month period starting January 27, 2003. This agreement was
replaced by the new                agreement above on August 25, 2003.
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | The
Research and License Agreement between Rhode Island Hospital and Nymox
               Corporation dated May 20, 1999. Under this agreement, Nymox sponsors the
               research of two principal investigators, Dr. Suzanne de la Monte and Dr.
Jack                Wands, pertaining to the use of neural thread protein diagnostic or
therapeutic                purposes in return for licensing rights to and patents arising
out of this                research. Current obligations to fund the research ended March
1, 2005. Licenses                granted to Nymox under this agreement remain in full
force and effect.
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# Exchange Controls

Canada has no system of exchange
controls. There are no exchange restrictions on borrowing from foreign countries or on the
remittance of dividends, interest, royalties and similar payments, management fees, loan
repayments, settlement of trade debts or the repatriation of capital.

There are no limitations on the
rights of non-Canadians to exercise voting rights on their shares of Nymox.

# TAXATION

# U.S. Federal Income Tax
Considerations for U.S. Persons

This section contains a summary of
certain U.S. federal income tax considerations for U.S. Persons (as defined below) who
hold common shares of Nymox. This summary is based upon the Internal Revenue Code of 1986,
as amended (the Code), Treasury regulations, rulings of the Internal Revenue
Service (the IRS), and judicial decisions in existence on the date hereof, all
of which are subject to change. Any such change could apply retroactively and could have
adverse consequences to Nymox and its shareholders. This summary is necessarily general
and does not attempt to summarize all aspects of the federal tax laws (and does not
attempt to summarize any state or local laws) that may affect an investors
acquisition of an interest in Nymox. No ruling from the IRS will be requested and no
assurance can be given that the IRS will agree with the tax consequences described in this
summary.

For purposes of this discussion, the
term U.S. Person means (a) an individual who is a citizen of the United
States or who is resident in the United States for United States federal income tax
purposes, (b) a corporation or a partnership that is organized under the laws of the
United States or any state thereof, (c) an estate the income of which is subject to United
States federal income taxation regardless of its source, or (d) a trust (i) that is
subject to the supervision of a court within the United States and is subject to the
control of one or more United States persons as described in the Code, or (ii) that has a
valid election in effect under applicable Treasury regulations to be treated as a United
States person. The term U.S. Holder means a shareholder of Nymox who is a U.S.
Person. The term foreign corporation means an entity that is classified as a
corporation for U.S. federal income tax purposes and that is not organized under the laws
of the United States or any state thereof.

This summary does not discuss all
United States federal income tax considerations that may be relevant to U.S. Holders in
light of their particular circumstances or to certain holders that may be subject to
special treatment under United States federal income tax law (for example, insurance
companies, tax-exempt organizations, financial institutions, dealers in securities,
persons who hold shares as part of a straddle, hedging, constructive sale, or conversion
transaction, U.S. Holders whose functional currency is not the U.S. dollar, and U.S.
Holders who acquired shares through exercise of employee stock options or otherwise as
compensation for services). Furthermore, this summary does not address any aspects of
state or local taxation.

80

---

The tax consequences of an
investment in Nymox are complex and based on tax provisions that are subject to change.
Prospective investors are urged to consult with, and must depend upon, their own tax
advisors with specific reference to their own tax situations as to the income and other
tax consequences of an investment in Nymox.

Dividends and gains on sale.Except as described below with respect to the passive foreign investment
company rules, distributions by Nymox to a U.S. Holder will be treated as ordinary
dividend income to the extent of Nymoxs current and accumulated earnings and
profits. Such dividends will not be eligible for the dividend-received deduction generally
allowed under the Code to dividend recipients that are U.S. corporations. The amount of
any distribution in excess of Nymoxs current and accumulated earnings and profits
will first be applied to reduce the U.S. Holders tax basis in its Nymox common
shares, and any amount in excess of tax basis will be treated as gain from the sale or
exchange of the common shares. For taxable years beginning after December 31, 2002 and
before January 1, 2009, a dividend paid by Nymox generally will be taxed at the
preferential tax rates applicable to long-term capital gains if (a) Nymox is a
qualified foreign corporation as defined in Section 1(h)(11) of the Code, (a
QFC), (b) the U.S. Holder receiving such dividend is an individual, estate, or
trust, and (c) such dividend is paid on common shares that have been held by such U.S.
Holder for at least 61 days during the 121-day period beginning 60 days before the
ex-dividend date (i.e., the first date that a purchaser of such common shares
will not be entitled to receive such dividend). Nymox currently meets the definition of a
QFC because its common shares are readily tradable on The Nasdaq SmallCap Market, an
established securities market in the United States, provided that Nymox is not a
passive foreign investment company (as described below) for the taxable year
during which Nymox pays a dividend or for the preceding taxable year. If Nymox is not a
QFC, a dividend paid by Nymox to a U.S. Holder that is an individual, estate, or trust
generally will be taxed at ordinary income tax rates (and not at the preferential tax
rates applicable to long-term capital gains). The dividend rules are complex, and each
U.S. Holder should consult its own financial advisor, legal counsel, or accountant
regarding the dividend rules.

Except as described below with
respect to the passive foreign investment company rules, any gain recognized
by a U.S. Holder on a sale or exchange of Nymox common shares (or on a distribution
treated as a sale or exchange) generally will be treated as capital gain. Capital gains of
corporations are taxable at the same rate as ordinary income. With respect to
non-corporate taxpayers, the excess of net long-term capital gain over net short term
capital loss may be taxed at a substantially lower rate than is ordinary income. A capital
gain or loss is long-term if the asset has been held for more than one year and short-term
if held for one year or less. In addition, the distinction between capital gain or loss
and ordinary income or loss is relevant for purposes of limitations on the deductibility
of capital losses.

A U.S. Holder generally may claim a
credit against its U.S. federal income tax liability for Canadian income tax withheld from
dividends received on Nymox common shares. The amount of this credit is subject to several
limitations under the Code.

Controlled foreign corporation
rules.A foreign corporation generally is classified as a controlled foreign
corporation (a CFC) if more than 50% of the corporations shares
(by vote or value) are owned, directly or indirectly, by 10% U.S.
Shareholders. For this purpose, a 10% U.S. Shareholder is a U.S. Person
that owns, directly or indirectly, shares possessing 10% or more of the voting power in
the foreign corporation. Nymox believes that it is not a CFC at the present time. If Nymox
were a CFC, each 10% U.S. Shareholder that owns, directly or indirectly through foreign
entities, an interest in Nymox generally would be required to include in its gross income
for U.S. federal income tax purposes a pro-rata share of any Subpart F income
earned by Nymox, whether or not such income is distributed by Nymox. Subpart F income
generally includes interest, dividends, royalties, and gain on the sale of stock or
securities.

81

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Foreign personal holding company
rules.In general, a foreign corporation is a foreign personal holding
company (a FPHC) during a taxable year if (i) at any time during
the taxable year, more than 50% of the shares (by vote or value) of the corporation are
owned, directly or indirectly, by five or fewer individuals who are U.S. Persons, and
(ii) at least 50% of the gross income of the corporation for the taxable year
consists of foreign personal holding company income (such as dividends,
interest, royalties, and gains on the sale of stock or securities).

Nymox believes that it is not a FPHC
at the present time. If Nymox were a FPHC, each U.S. Person that owns, directly or
indirectly through foreign entities, an interest in Nymox generally would be required to
recognize, as a dividend, the U.S. Persons share of the undistributed annual income
of Nymox.

Passive foreign investment company
rules.In general, a foreign corporation is a passive foreign investment
company (a PFIC) during a taxable year if 75% or more of its gross
income for the taxable year constitutes passive income or if 50% or more of
its assets (by average fair market value) held during the taxable year produce, or are
held for the production of, passive income. In general, any U.S. Person that owns,
directly or indirectly, an interest in a foreign corporation will be subject to an
interest charge (in addition to regular U.S. federal income tax) upon the disposition by
the U.S. Person of, or receipt by the U.S. Person of excess distributions with
respect to, any shares of the foreign corporation if: (i) the foreign corporation is
a PFIC during the taxable year in which such income is realized by the U.S. Person; or
(ii) the foreign corporation was a PFIC during any prior taxable year that is
included in whole or in part in the U.S. Persons holding period (within
the meaning of Section 1223 of the Code) with respect to its interest in the shares of the
foreign corporation. Furthermore, the U.S. Persons share of such gain or
excess distribution will be taxable as ordinary income. There exist several
other adverse tax consequences that may apply to any U.S. Person that owns, directly or
indirectly, an interest in a PFIC.

A U.S. Person that owns, directly or
indirectly, an interest in a PFIC can elect to treat such PFIC as a qualified
electing fund (a QEF) with respect to the U.S. Person. In general, the
effect of a QEF election with respect to a PFIC is that, beginning with the first taxable
year to which the election applies and in all succeeding taxable years during which the
foreign corporation is a PFIC, the U.S. Person is required to include in its income its
share of the ordinary earnings and net capital gains of the PFIC. The U.S. Person is not
taxable with respect to any distribution by the PFIC from earnings that have been included
previously in the U.S. Persons income under the QEF provisions. If the QEF election
is made with respect to the first taxable year in which a U.S. Person owns, directly or
indirectly, an interest in the particular PFIC, the adverse tax consequences described in
the immediately preceding paragraph (including the interest charge and the treatment of
gains as ordinary income) would not apply to the U.S. Persons interest in that PFIC.
In order to make a QEF election, a U.S. Person is required to provide to the IRS certain
information furnished by the PFIC.

Nymox believes that it has not been a
PFIC during any taxable year ending on or before December 31, 2003. It is not possible to
express an opinion as to whether or not Nymox is or will be a PFIC during its current
taxable year or future taxable years. Nymox intends to notify its U.S. Holders within 45
days after the end of the taxable year for which Nymox believes it might be a PFIC. Nymox
has further undertaken (i) to provide its U.S. Holders with timely and accurate
information as to its status as a PFIC and the manner in which the QEF election can be
made and (ii) to comply with all record-keeping, reporting and other requirements so that
the U.S. Holders, at their option, may make a QEF election.

Each U.S. Person who owns, directly
or indirectly, common shares of Nymox is urged to consult its own tax advisor with respect
to the advantages and disadvantages of making a QEF election with respect to Nymox.

82

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Backup withholding.
Information reporting to the IRS may be required with respect to payments of dividends on
the Nymox common shares to U.S. Holders, and with respect to proceeds received by U.S.
Holders on the sale of Nymox common shares. A U.S. Holder may be subject to backup
withholding at a 30% rate with respect to dividends received with respect to Nymox common
shares, or proceeds received on the sale of Nymox common shares through a broker, unless
the U.S. Holder (i) demonstrates that it qualifies for an applicable exemption (such
as the exemption for holders that are corporations), or (ii) provides a taxpayer
identification number and complies with certain other requirements. Any amount withheld
from payment to a U.S. Holder under the backup withholding rules generally will be allowed
as credit against the U.S. Holders U.S. federal income tax liability, if any, and
may entitle the U.S. Holder to a refund, provided that the required information is
furnished to the IRS.

# Canadian Federal Income
Taxation

The following is, as of the date of
this report, a summary of the principal Canadian federal income tax considerations
generally applicable to shareholders who receive a dividend from Nymox and who, at all
relevant times, for purposes of the Income Tax Act (Canada) the (Tax Act),
hold and will hold Nymox common shares as capital property and deal with Nymox at
arms length.

Nymoxs common shares will
generally constitute capital property to a holder unless the holder holds such shares in
the course of carrying on a business or the holder has acquired such shares in a
transaction or transactions considered to be an adventure in the nature of trade. This
summary is based on the current provisions of the Tax Act, the regulations under that act,
counsels understanding of current administrative and assessing policies of the
Canada Customs and Revenue Agency and all specific proposals to amend the Tax Act publicly
announced or released by or on behalf of the Minister of Finance (Canada) before the date
of this report (Tax Proposals).

The Tax Act contains certain
provisions relating to securities held by certain financial institutions (the
Mark-to-Market Rules). This summary does not take into account these
Mark-to-Market Rules or any amendments to them contained in the Tax Proposals and
taxpayers that are financial institutions for purposes of those rules should
consult their own tax advisors.

This summary is not exhaustive of all
possible Canadian federal income tax considerations and, except for the Tax Proposals,
does not take into account or anticipate any changes in law, whether by legislative,
governmental or judicial action, nor does it take into account tax legislation of any
province, territory or foreign jurisdiction. This summary is of a general nature only and
is not intended to be, nor should it be construed as, legal or tax advice to any
particular holder of Nymox common shares.

# Canadian Residents

The following summary is relevant to
a holder of Nymox common shares who, for purposes of the Tax Act and any applicable tax
treaty or convention, is resident in Canada at all relevant times.

Tax Treatment of Capital
Gains and Capital Losses for Canadian Residents

On a disposition or deemed
disposition of a Nymox common share, the holder will realize a capital gain (or capital
loss) equal to the amount by which the proceeds of disposition for the Nymox common share
exceed (or are less than) the aggregate of any costs of disposition and the adjusted cost
base to the holder of the Nymox common share immediately before the disposition.

83

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Pursuant to the Tax Act and subject
to certain transitional rules which apply in certain circumstances, a holder of Nymox
common shares will be required to include in income one-half of the amount of any capital
gain (a Taxable capital gain) and may deduct one-half of the amount of any
capital loss (an Allowable capital loss) against Taxable capital gains
realized by the holder in the year of the disposition. Allowable capital losses in excess
of Taxable capital gains may be carried back and deducted in any of the three preceding
years or carried forward and deducted in any following year against taxable capital gains
realized in such years to the extent and under the circumstances described in the Tax Act.

A capital loss realized by a holder
of Nymox common shares that is a corporation, a partnership of which a corporation is a
member or a trust of which a corporation is a beneficiary may be reduced by the amount of
dividends received in certain circumstances. Capital gains realized by an individual may
give rise to a liability for alternative minimum tax.

Tax Treatment of
Dividends Received by Canadian Residents

In the case of a holder of Nymox
common shares who is an individual, any dividends received on the common shares will be
included in computing his income and will be subject to the gross-up and dividend tax
credit rules normally applicable to taxable dividends paid by taxable Canadian
corporations. A holder that is a corporation may be liable to pay refundable tax under
Part IV of the Tax Act. However, a public corporation which is not controlled, whether
because of a beneficial interest in one or more trusts or otherwise, by or for the benefit
of an individual (other than a trust) or a related group of individuals (other than
trusts) will not be liable to pay refundable tax under Part IV of the Tax Act.

In the case of a holder of Nymox
common shares that is a corporation, the amount of any capital loss otherwise determined
resulting from the disposition of a Nymox common share may be reduced by the amount of
dividends previously received or deemed to have been received thereon. Any such
restriction will not occur where the corporate holder owned the Nymox common share for 365
days or longer and such holder (together with any persons with whom it did not deal at
arms length) did not own more than 5% of the shares of any class or series of Nymox
at the time the relevant dividends were received or deemed to have been received.
Analogous rules apply where a corporation is a member of a partnership or a beneficiary of
a trust, which owns Nymox common shares.

# Shareholders Who Are Not
Residents Of Canada

The following summary is relevant to
a holder of Nymox common shares, who, at all relevant times, for purposes of the Tax Act
and any applicable tax treaty or convention, is a non-resident or is deemed to be a
non-resident of Canada and does not use and is not deemed to use or hold Nymox common
shares in the course of carrying on a business in Canada. Special rules, which are not
discussed below, may apply to a non-resident that is an insurer which carries on business
in Canada and elsewhere.

Dividends Paid To
Non-Residents of Canada

Under the Tax Act, dividends paid or
credited to a non-resident are subject to withholding tax at the rate of 25% of the gross
amount of the dividends. This withholding tax may be reduced or eliminated pursuant to the
terms of an applicable tax treaty between Canada and the country of residence of the
non-resident. For example, for persons who are resident in the United States for purposes
of the Canada-United States Income Tax Convention, (the Convention) the rate
of withholding tax on dividends is reduced to 15% generally and 5% when the United States
resident is a company that beneficially owns at least 10% of the voting stock of the
company paying the dividends.

84

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Under the Convention, dividends paid
to certain religious, scientific, charitable and other similar tax-exempt organizations
and certain organizations that are resident in, and exempt from tax in, the United States
are exempt from Canadian non-resident withholding tax. Provided that certain
administrative procedures designed to establish with the Canadian tax authorities the
right of such entities to benefit from this withholding tax exemption are complied with by
the tax-exempt entities prior to the Distribution, Nymox would not be required to withhold
such tax on such payment. Alternatively, the above-described tax-exempt entities may claim
a refund of Canadian withholding tax otherwise withheld by Nymox on the distribution of
dividends.

Tax Treatment of Capital
Gains of Non-Residents of Canada

On a disposition or deemed
disposition of a Nymox common share, a non-resident holder will realize a capital gain (or
capital loss) equal to the amount by which the proceeds of disposition for the Nymox
common share exceed (or are less than) the aggregate of any costs of disposition and the
adjusted cost base to the non-resident holder of the Nymox common share immediately before
the disposition.

A non-resident of Canada is liable
for Canadian income tax on a capital gain realized on the disposition of property only
where that property constitutes taxable Canadian property. Pursuant to the Tax
Act and subject to certain transitional rules which apply in certain circumstances,
one-half of any capital gain from the disposition of taxable Canadian property is subject
to Canadian tax.

Under the Tax Act, shares of Nymox
will not constitute taxable Canadian property unless, at any time, in the five years
immediately preceding the disposition, the non-resident holder, persons with whom the
non-resident holder did not deal at arms length, or the non-resident holder together with
all such persons owned (or had a right to acquire) 25% or more of the shares of any class
of Nymox. Even in circumstances where shares of Nymox are taxable Canadian property to a
non-resident holder, the non-resident holder may be entitled to relief from Canadian tax
on any capital gain realized on the disposition thereof pursuant to the terms of an
applicable tax treaty between Canada and the country of residence of the non-resident. For
example, the Convention provides that gains realized by a resident of the United States on
the disposition or deemed disposition of shares of a company will generally not be subject
to tax under the Tax Act, provided that the value of the shares is not derived principally
from real property situated in Canada. Nymox believes that the value of its shares is not
currently derived principally from real property situated in Canada and it does not expect
this to change in the foreseeable future.

Provided that the Nymox common shares
remain listed on a prescribed stock exchange, which includes the NASDAQ SmallCap Market
System, a non-resident holder who disposes of Nymox common shares will not be required to
comply with the Canadian notification procedures generally applicable to dispositions of
taxable Canadian property.

# Documents on Display

The Company is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended. In
accordance with these requirements, the Company files reports and other information with
the Securities and Exchange Commission. These materials, including this Annual Report and
the exhibits hereto, may be inspected and copied at the Commissions Public Reference
Room at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of the materials may be
obtained from the Commissions Public Reference Room at prescribed rates.

# ITEM 11. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our principal exposure to market risk
relates to changes in interest rates. As of December 31, 2004, we have cash flow exposure
to the changing interest rates on notes payable, bearing interest at the prime rate plus
2%, in the amount of $500,000. The maturity dates on notes payable in the amount of
$500,000 outstanding at December 31, 2004 were extended from June 30, 2005 to December 31,
2005. Notes payable in the amount of $100,000 were repaid on January 12, 2005.

85

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# ITEM 12. DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

# PART II

# ITEM 13. DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES

None.

# ITEM 14. MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

# ITEM 15. CONTROLS AND
PROCEDURES

(a)    Evaluation
of Disclosure Controls and Procedures. In accordance with Rule           13a-15(b) of
the Securities Exchange Act of 1934 (the Exchange Act),           the Companys
management, including the Companys Chief Executive           Officer and President,
and the Chief Financial Officer and Secretary-Treasurer,           evaluated the
effectiveness of the design and operation of the Companys           disclosure
controls and procedures (as defined in Rule 13a-14(c) under the           Exchange Act)
as of the end of the period covered by this Annual Report on Form           20-F and the
Chief Executive Officer and President, and the Chief Financial           Officer and
Secretary-Treasurer concluded that the disclosure controls and           procedures were
effective.

(b)    Changes
in Internal Controls over Financial Reporting. There were no           significant
changes in the Companys internal controls over financial           reporting or
other factors that could significantly affect these controls           subsequent to the
date of their evaluation, including any corrective actions           with regard to
significant deficiencies and material weaknesses.

# Item 16A. 
 AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined
that Dr. Hans Black, the Chairman of our Audit Committee, is an audit committee financial
expert and is an independent director.

# Item 16B. 
 CODE OF ETHICS

We have adopted a code of ethics that
is applicable to our officers, directors and employees in general and our principal
executive officer, principal financial officer, principal accounting officer or controller
and persons performing similar functions in particular. The code of ethics can be found on
our website, www.nymox.com.

# Item 16C. 
 PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our principal independent auditor is
KPMG LLP.

# Fees and Services

During the years ended December 31,
2004 and 2003, we paid the following fees for professional services to KPMG LLP:

86

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|                      
|----------------------
|(CAN$)                
|Audit Services        
|Audit-Related Services
|Tax Services          
|Other Services        
|                      
|Total                 

---

Audit Services are defined as
the standard audit work that needs to be performed each year in order to issue an opinion
on our consolidated financial statements and to issue reports on our statutory financial
statements. It also includes services that can only be provided by the auditor signing the
audit report such as auditing of non-recurring transactions and application of new
accounting policies, audits of significant and newly implemented system controls,
pre-issuance reviews of quarterly financial results, consents and comfort letters and any
other audit services required for U.S. Securities and Exchange Commission or other
regulatory filings.

Audit-Related Services include
those other assurance services provided by auditors but not restricted to those that can
only be provided by the auditor signing the audit report. They include amounts for
services such as acquisition due diligence, audits of pension and benefit plans,
contractual audits of third party arrangements, assurance services on corporate
citizenship reporting, and consultation regarding new accounting pronouncements.

Tax Services represent tax
compliance and other services and expatriate and executive tax return services.

# Policy on Pre-Approval
of Audit and Non-Audit Services of Independent Auditors

Our Audit Committee is responsible
for the oversight of our independent auditors work. Our Audit Committees
policy is to pre-approve all audit and non-audit services provided by KPMG. These services
may include audit services, audit-related services, tax services and other services. The
Audit Committee appoints the auditors and oversees and fixes the compensation for all such
services. KPMG and our management report to the Audit Committee on a quarterly basis
regarding the extent of services actually provided in accordance with the applicable
pre-approval, and regarding the fees for the services performed.

# ITEM 16D. EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

# ITEM 16E. PURCHASES OF
EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

|    
|----
|2001
|2002
|2003
|2004
|2005

*  denotes purchases up to June 7,
2005

87

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# PART III

# ITEM 17. FINANCIAL
STATEMENTS

The financial statements identified below
are included in Item 8 of this report and are incorporated by reference in this item.

| | At
and for the year ended December 31, 2004:
| | --------------------------------------------

| | Consolidated
Balance Sheets                   Consolidated Statements of Operations and Deficit
                  Consolidated Statements of Cash Flows                   Notes
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
and for the year ended December 31, 2003:
| | --------------------------------------------

| | Consolidated
Balance Sheets                   Consolidated Statements of Operations and Deficit
                  Consolidated Statements of Cash Flows                   Notes
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At
and for the year ended December 31, 2002:
| | --------------------------------------------

| | Consolidated
Statement of Operations and Deficit                   Consolidated Statements of Cash
Flows                   Notes
| | --------------------------------------------------------------------------------------------------------------------------------

# ITEM 18. FINANCIAL
STATEMENTS

Not applicable

88

---

# ITEM 19. EXHIBITS

The
following exhibits are included with or incorporated by reference into this report:

|Exhibit No. | Description
|----------- | -----------

|1(a) | Articles
of Incorporation, as amended. (incorporated by reference to Exhibit 3.1                to
the Companys Form 20-F filed with the Commission December 9, 1996)
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1(b) | Bylaws
of the Company (incorporated by reference to Exhibit 3.2 to the                Companys
Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|4(a) | Memorandum
of Agreement between Paul Averback and the Company (incorporated by
               reference to Exhibit 10.1 to the Companys Form 20-F filed with the
               Commission December 9, 1996)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(b) | Share
Option Plan of the Company (incorporated by reference to Exhibit 10.2 to
               the Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(c) | Research
and License Agreement between the Massachusetts General Hospital
               Corporation and the Company (incorporated by reference to Exhibit 10.3 to
the                Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(d) | Research
and License Amendment between the Massachusetts General Hospital
               Corporation and the Company (incorporated by reference to Exhibit 10.5 to
the                Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(e) | Common
Stock Purchase Agreement between Nymox Pharmaceutical Corporation and
               Jaspas Investments Limited dated November 1, 1999 (incorporated by
reference to                Exhibit 2.0 to the Companys Form F-1 Registration
Statement filed with the                Commission February 29, 2000)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(f) | Registration
Rights Agreement between Nymox Pharmaceutical Corporation and                Jaspas
Investments Limited dated November 1, 1999 (incorporated by reference to
               Exhibit 2.1 to the Companys Form F-1 Registration Statement filed
with the                Commission February 29, 2000)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(g) | Escrow
Agreement among Nymox Pharmaceutical Corporation, Jaspas Investments
               Limited and Epstein, Becker & Green, P.C. dated November 1, 1999
               (incorporated by reference to Exhibit 2.2 to the Companys Form F-1
               Registration Statement filed with the Commission February 29, 2000)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(h) | Stock
Purchase Warrant to purchase common shares issued to Jaspas Investments
               Limited dated November 1, 1999 (incorporated by reference to Exhibit 2.3
to the                Companys Form F-1 Registration Statement filed with the
Commission                February 29, 2000)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(i) | Research
and License Agreement between the Rhode Island Hospital Corporation and
               the Company dated May 14, 1999 (incorporated by reference to Exhibit 10.10
to                the Companys Form 20-F filed with the Commission May 15, 2000).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(j) | Research
and License Amendment between the Rhode Island Hospital Corporation and
               the Company dated November 19, 2001 (incorporated by reference to Exhibit
10.10                to the Companys Form 20-F filed with the Commission June 28,
2002).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(k) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated January 27, 2003 (incorporated
by                reference to Exhibit 10.0 to the Companys F-3 Registration
Statement filed                with the Commission on March 12, 2003).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(l) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated August 25, 2003 (incorporated
by                reference to Exhibit 10.1 to the Companys 6-K Report filed with
the                Commission on November 13, 2003).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(m) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated October 6, 2004 (incorporated
by                reference to Exhibit 10.1 to the Companys 6-K Report filed with
the                Commission on November 15, 2004).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8 | List
of Subsidiaries of Nymox Pharmaceutical Corporation (incorporated by reference to Exhibit
8 to the Companys Form 20-F filed with the Commission June 30, 2004).
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11 | Code of
Business Conduct for the Officers, Directors and Employees of Nymox Pharmaceutical Corporation
(incorporated by reference to Exhibit 11 to the Companys Form 20-F filed with the
Commission June 30, 2004)
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12(a) | Certification of Principal Executive Officer Pursuant to Rule
13a-14(a) or 15d-14(a)
|----- | ------------------------------------------------------------------------------------

|12(b) | Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) or           15d-14(a)
|----- | ----------------------------------------------------------------------------------------------

|13(a) | Certification
of Chief Executive Officer Pursuant to 18 U.S.C. 1350, As Adopted           Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|13(b) | Certification
 of Chief  Financial  Officer  Pursuant  to 18 U.S.C.  1350,  As Adopted  Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------

89

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# SIGNATURES

Pursuant to the requirements of
Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets
all of the requirements for filing on Form 20-F and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly authorized.

| | NYMOX PHARMACEUTICAL CORPORATION
| | --------------------------------
| | (Registrant)                    
| | /S/ Paul Averback               
| | Paul Averback                   
| | Title: President                

Date: June 30, 2005

90

---

# EXHIBIT INDEXNYMOX
PHARMACEUTICAL CORPORATION

Form 20-F Annual Report

|Exhibit No. | Description
|----------- | -----------

|1(a) | Articles
of Incorporation, as amended. (incorporated by reference to Exhibit 3.1                to
the Companys Form 20-F filed with the Commission December 9, 1996)
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1(b) | Bylaws
of the Company (incorporated by reference to Exhibit 3.2 to the                Companys
Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------

|4(a) | Memorandum
of Agreement between Paul Averback and the Company (incorporated by
               reference to Exhibit 10.1 to the Companys Form 20-F filed with the
               Commission December 9, 1996)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(b) | Share
Option Plan of the Company (incorporated by reference to Exhibit 10.2 to
               the Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(c) | Research
and License Agreement between the Massachusetts General Hospital
               Corporation and the Company (incorporated by reference to Exhibit 10.3 to
the                Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(d) | Research
and License Amendment between the Massachusetts General Hospital
               Corporation and the Company (incorporated by reference to Exhibit 10.5 to
the                Companys Form 20-F filed with the Commission December 9, 1996)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(e) | Common
Stock Purchase Agreement between Nymox Pharmaceutical Corporation and
               Jaspas Investments Limited dated November 1, 1999 (incorporated by
reference to                Exhibit 2.0 to the Companys Form F-1 Registration
Statement filed with the                Commission February 29, 2000)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(f) | Registration
Rights Agreement between Nymox Pharmaceutical Corporation and                Jaspas
Investments Limited dated November 1, 1999 (incorporated by reference to
               Exhibit 2.1 to the Companys Form F-1 Registration Statement filed
with the                Commission February 29, 2000)
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(g) | Escrow
Agreement among Nymox Pharmaceutical Corporation, Jaspas Investments
               Limited and Epstein, Becker & Green, P.C. dated November 1, 1999
               (incorporated by reference to Exhibit 2.2 to the Companys Form F-1
               Registration Statement filed with the Commission February 29, 2000)
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(h) | Stock
Purchase Warrant to purchase common shares issued to Jaspas Investments
               Limited dated November 1, 1999 (incorporated by reference to Exhibit 2.3
to the                Companys Form F-1 Registration Statement filed with the
Commission                February 29, 2000)
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(i) | Research
and License Agreement between the Rhode Island Hospital Corporation and
               the Company dated May 14, 1999 (incorporated by reference to Exhibit 10.10
to                the Companys Form 20-F filed with the Commission May 15, 2000).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(j) | Research
and License Amendment between the Rhode Island Hospital Corporation and
               the Company dated November 19, 2001 (incorporated by reference to Exhibit
10.10                to the Companys Form 20-F filed with the Commission June 28,
2002).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(k) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated January 27, 2003 (incorporated
by                reference to Exhibit 10.0 to the Companys F-3 Registration
Statement filed                with the Commission on March 12, 2003).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(l) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated August 25, 2003 (incorporated
by                reference to Exhibit 10.1 to the Companys 6-K Report filed with
the                Commission on November 13, 2003).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4(m) | Common
Stock Private Purchase Agreement between Nymox Pharmaceutical Corporation
               and Lorros-Greyse Investments Limited dated October 6, 2004 (incorporated
by                reference to Exhibit 10.1 to the Companys 6-K Report filed with
the                Commission on November 15, 2004).
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8 | List
of Subsidiaries of Nymox Pharmaceutical Corporation (incorporated by reference to Exhibit
8 to the Companys Form 20-F filed with the Commission June 30, 2004).
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11 | Code of
Business Conduct for the Officers, Directors and Employees of Nymox Pharmaceutical Corporation
(incorporated by reference to Exhibit 11 to the Companys Form 20-F filed with the
Commission June 30, 2004)
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12(a) | Certification of Principal Executive Officer Pursuant to Rule
13a-14(a) or 15d-14(a)
|----- | ------------------------------------------------------------------------------------

|12(b) | Certification
of Principal Financial Officer Pursuant to Rule 13a-14(a) or           15d-14(a)
|----- | ----------------------------------------------------------------------------------------------

|13(a) | Certification
of Chief Executive Officer Pursuant to 18 U.S.C. 1350, As Adopted           Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------

|13(b) | Certification
 of Chief  Financial  Officer  Pursuant  to 18 U.S.C.  1350,  As Adopted  Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------