Document:

<PAGE>

                                                                     Exhibit 4.2

                                (NEUROCHEM LOGO)

                                 NEUROCHEM INC.

                             ANNUAL INFORMATION FORM

                    SIX-MONTH PERIOD ENDED DECEMBER 31, 2003

                                                                    MAY 12, 2004
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                    <C>
ITEM 1 - COVER PAGE....................................................i

ITEM 2 - CORPORATE STRUCTURE...........................................1

   2.1     NAME AND INCORPORATION......................................1
   2.2     INTERCORPORATE RELATIONSHIPS AND REORGANIZATION.............1

ITEM 3 - GENERAL DEVELOPMENT OF THE BUSINESS...........................1

   3.1     THREE-YEAR HISTORY..........................................1

ITEM 4 - NARRATIVE DESCRIPTION OF THE BUSINESS.........................7

   4.1     GENERAL: OUR BUSINESS.......................................7

ITEM 5 - SELECTED CONSOLIDATED FINANCIAL INFORMATION..................18

   5.1     ANNUAL INFORMATION.........................................18
   5.2     DIVIDENDS..................................................19

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS.........................19

   6.1     QUARTERLY INFORMATION......................................19

ITEM 7 - MARKET FOR SECURITIES........................................19

ITEM 8 - DIRECTORS AND OFFICERS.......................................19

ITEM 9 - AUDIT COMMITTEE FINANCIAL EXPERT.............................22

ITEM 10 - PRINCIPAL ACCOUNTANT FEES AND SERVICES......................22

ITEM 11 - ADDITIONAL INFORMATION......................................24
</TABLE>

                                       ii
<PAGE>
As used in this Annual Information Form, unless the context otherwise requires,
the terms "we", "us", "our", "Neurochem" or the "Corporation", mean or refer to
Neurochem Inc. and, unless the context otherwise requires, its subsidiaries and
its Affiliates (as such term is defined in this Annual Information Form). Except
as otherwise stated, all dollar amounts and references to $ are to Canadian
dollars and US$ refers to United States dollars.

ITEM 2 - CORPORATE STRUCTURE

2.1  NAME AND INCORPORATION

Neurochem was incorporated on June 17, 1993 under the Canada Business
Corporations Act in association with Parteq Research and Development
Innovations, the technology transfer office at Queen's University of Kingston,
Ontario. On June 20, 2000, the Corporation amended its share capital (i) to
change all of the then issued and outstanding Class "A" Shares into Common
Shares and cancel the Class "A" Shares as an authorized class and (ii) to create
a class of Preferred Shares, issuable in series.

2.2  INTERCORPORATE RELATIONSHIPS AND REORGANIZATION

As of May 2003, the corporate structure of the Neurochem group of companies was
changed. Currently, Neurochem Inc. has an indirect wholly-owned subsidiary,
Neurochem (International) Limited, a Swiss corporation. Neurochem
(International) Limited is wholly-owned by Neurochem Holdings Limited, a Swiss
corporation which is, in turn, wholly-owned by Neurochem Luxco II S.A.R.L., a
Luxembourg corporation. Neurochem Luxco II S.A.R.L. is wholly-owned by Neurochem
Luxco I S.C.S., a Luxembourg limited partnership whose sole limited partner is
Neurochem Inc. and whose sole general partner is Neurochem Luxco I S.A.R.L., a
Luxembourg corporation wholly-owned by Neurochem Inc. Neurochem Inc. is also the
sole shareholder of Neurochem U.S. LLC, a Delaware limited liability company.
All of such entities, other than Neurochem Inc., are sometimes collectively
referred to in this annual information form as our "Affiliates".

ITEM 3 - GENERAL DEVELOPMENT OF THE BUSINESS

3.1  THREE-YEAR HISTORY

We are a biopharmaceutical company focused on the development and
commercialization of innovative therapeutics for neurological disorders. Our
pipeline of proprietary, disease-modifying, oral products addresses unmet
medical needs. We have three programs in clinical trials and one lead compound
in pre-clinical development, each targeting disorders for which there are
currently no known cures.

Over the past three years, the Corporation has successfully advanced three
programs from pre-clinical to clinical trials namely, Alzhemed(TM), for the
treatment of Alzheimer's Disease; Fibrillex(TM), for the treatment of Amyloid A
Amyloidosis; and Cerebril(TM), for the prevention of Hemorrhagic Stroke caused
by Cerebral Amyloid Angiopathy.

We changed our year end during 2003 from June 30 to December 31. As a result,
our fiscal year ended December 31, 2003 is represented by the six-month period
then ended.

                                       1
<PAGE>
SIX-MONTH PERIOD ENDED DECEMBER 31, 2003

For the six-month period ended December 31, 2003, we expanded our management and
scientific team, and raised significant funds in a cross-border offering, as our
lead product candidates continue to advance to the marketplace.

CLINICAL ADVANCES:

     -    On December 9, 2003, we issued a press release reporting the positive
          interim results on cognitive function as measured by ADAS-cog of
          patients suffering from mild-to-moderate Alzheimer's Disease in an
          open-label Phase II extension study of Alzhemed(TM). The report is
          based on results of patients in the ongoing study who had completed
          nine and also 12 months of treatment on the highest dose (300mg daily)
          of Alzhemed(TM).

COLLABORATIVE AGREEMENTS, GRANTS AND FINANCINGS:

     -    On September 23, 2003, we completed the initial public offering of our
          Common Shares in the United States and a new issue of Common Shares in
          Canada. In connection with this offering, the Common Shares were
          approved for quotation on the Nasdaq National Market ("NASDAQ") under
          the "NRMX" trading symbol. We issued 5.75 million Common Shares at a
          price of US$10.87 per share. The aggregate net proceeds from the
          offering, including the proceeds from the over-allotment option
          granted to the underwriters of the offering, were approximately $78.1
          million (US$59 million), net of underwriting fees and commissions and
          issue expenses. We intend to use these proceeds to fund clinical
          trials of our lead product candidates, as well as to further complete
          pre-clinical and research and development programs. We also intend to
          use the proceeds for capital expenditures and the balance for working
          capital and general corporate purposes.

INTELLECTUAL PROPERTY PORTFOLIO:

     -    U.S. Patent no. 6,670,399 entitled "Compounds and Methods for
          Modulating Cerebral Amyloid Angiopathy" was issued to us on December
          30, 2003.

     -    As of December 31, 2003, our portfolio contained over 200 patents and
          pending patent applications.

LITIGATION:

     -    Neurochem executed an agreement (the "CTA") with Immtech International
          Inc. ("Immtech") of Vernon Hills, Illinois in 2002 pursuant to which
          Immtech provided Neurochem with certain compounds for testing and
          granted Neurochem an option to license such compounds. On August 12,
          2003 Immtech filed certain legal proceedings with the federal district
          court for the Southern District of New York, U.S.A., with respect to
          the agreement. Neurochem has and will continue to vigorously defend
          against the claims brought by Immtech.

RECENT ANNOUNCEMENTS:

     -    On November 13, 2003, we announced that we had been selected for
          addition to the NASDAQ Biotechnology Index pursuant to our listing
          which took effect in September 2003.

     -    At our annual and special meeting of shareholders held on December 9,
          2003, Dr. Frederick H. Lowy, Rector and Vice-Chancellor of Concordia
          and Graeme K.

                                       2
<PAGE>
          Rutledge, Consultant, Chartered Accountant and former senior partner
          of Deloitte & Touche LLP, Canada, an accounting firm, were elected to
          our Board of Directors.

     -    On December 19, 2003, we announced that we were added to the S&P/TSX
          Composite Index, the Capped Health Care Index, as well as to the
          Global Industry Classification Standard Index.

     -    Effective December 31, 2003, we changed our fiscal year-end from June
          30 to December 31. Our year-end will now be consistent with that of
          most other companies in our industry.

FISCAL YEAR ENDED JUNE 30, 2003

During the fiscal year ended June 30, 2003, we transitioned our business from a
research and development focused company to a product-driven company and
concentrated our activities on neurological disorders. In a strategic move aimed
at focusing on our core expertise, we completed a technology transfer pertaining
to our Diabetes program to Innodia Inc. ("Innodia"), a company focused
exclusively on the development of therapeutic treatments for Diabetes, in
exchange for an equity interest in Innodia. We also invested $500,000 in a
private placement concluded by Innodia. As at June 30, 2003, we indirectly owned
a 31% equity interest in Innodia. This strategy will eliminate funding
requirements associated with our Diabetes program while allowing us to share in
the program's economic potential as an indirect shareholder of Innodia.

CLINICAL ADVANCES:

     -    Our product pipeline made significant progress during the fiscal year.
          We completed patient recruitment for the Phase II/III clinical trial
          of Fibrillex(TM), our most advanced product candidate to treat Amyloid
          A Amyloidosis ("AA Amyloidosis"). We completed a Phase II clinical
          trial in respect of Alzhemed(TM), our next most advanced product
          candidate for the treatment of Alzheimer's Disease. We initiated a
          Phase II clinical trial during the year in respect of Cerebril(TM),
          our product candidate to treat Hemorrhagic Stroke due to Cerebral
          Amyloid Angiopathy ("CAA"). We continued to advance a compound for the
          treatment of epileptic seizures following Traumatic Brain Injury
          ("TBI") through pre-clinical testing.

     -    In June 2003, we reported the successful results of the Phase II
          clinical trial for Alzhemed(TM). Positive findings from the 12-week
          trial involving patients with mild-to-moderate Alzheimer's Disease
          showed Alzhemed(TM) to be safe and well tolerated. Alzhemed(TM) was
          able to change the level of amyloid in the cerebrospinal fluid ("CSF")
          in Alzheimer's Disease patients in a dose-related fashion.
          Alzhemed(TM) also demonstrated its ability to overcome the major
          challenge of crossing from the bloodstream to the brain through the
          protective blood-brain-barrier ("BBB"). Interim results also revealed
          that patients treated for six months on the highest dose of
          Alzhemed(TM) showed stable or improved cognitive function.

GRANTS AND FINANCINGS:

     -    In January 2003, the lead investigator for Cerebril(TM) was awarded
          approximately US$1 million from the National Institutes of Health.

     -    On July 25, 2002, we issued 2.8 million units at a price of $2.50 per
          unit to P.P. Luxco Holdings II S.A.R.L., a wholly-owned subsidiary of
          Picchio Pharma Inc. ("Picchio Pharma"). The holdings and purchases of
          Common Shares by Picchio Pharma through P.P. Luxco Holdings II
          S.A.R.L. are referred to in and for the purposes of this annual

                                       3
<PAGE>
          information form as being holdings and purchases of Picchio Pharma.
          Each unit was comprised of one Common Share and one warrant to
          purchase an additional Common Share at any time and from time to time
          within a three-year period from issuance at an exercise price of
          $3.13. In connection with this investment, we covenanted to cause a
          total of three nominees of Picchio Pharma to be included in the list
          of management nominees to be proposed for election to our Board of
          Directors at each meeting of our shareholders called therefor. The
          subscription agreement provides that this obligation shall terminate
          on the date Picchio Pharma ceases to beneficially hold at least 15% of
          the outstanding Common Shares (including shares issuable upon exercise
          of the warrants issued to Picchio Pharma on July 25, 2002). Dr.
          Bellini and Messrs. Kruyt and Nordmann are the current nominees of
          Picchio Pharma.

     -    P.P. Luxco Holdings II S.A.R.L. made an additional investment in the
          Corporation on February 18, 2003 when the Corporation issued 1.2
          million units. Each unit was comprised of one Common Share and one
          warrant to purchase an additional Common Share at any time and from
          time to time within a three-year period from issuance at an exercise
          price of $7.81. The disinterested shareholders of the Corporation
          approved, confirmed and ratified the issuance of the units at a
          shareholders meeting held on February 18, 2003. Shares held by Picchio
          Pharma and its associates were excluded from voting in respect of such
          issuance.

INTELLECTUAL PROPERTY PORTFOLIO:

     -    We were issued two additional patents covering (a) methods and
          compounds for inhibiting amyloid deposits and (b) phosphonocarboxylate
          compounds for treating amyloidosis, bringing the total to 16 patents
          granted worldwide.

     -    We filed 38 new patent applications, including eight new cases.
          Overall, we have more than 150 patent applications pending in the
          United States, Canada and internationally.

RECENT ANNOUNCEMENTS:

     -    In November 2002, Dr. Francesco Bellini was appointed Chief Executive
          Officer, adding to his other responsibilities as Director and Chairman
          of the Board.

     -    In January 2003, we announced the appointment of Dr. Phillipe Calais
          as our President. The Company also appointed Mr. David Skinner as
          Director of Legal Affairs, General Counsel and Corporate Secretary in
          April 2003.

     -    Over the course of the year, we appointed Mr. Richard Cherney,
          co-managing partner of the law firm Davies Ward Phillips & Vineberg
          LLP and Dr. Emil Skamene, Scientific Director of the Research
          Institute of the McGill University Health Centre to our Board of
          Directors.

FISCAL YEAR ENDED JUNE 30, 2002

In fiscal 2002, we achieved many advances and several important milestones in
our clinical and drug development programs. The highlights of such advances and
milestones were as follows:

CLINICAL ADVANCES:

     -    Alzhemed(TM) - Alzheimer's Disease: We completed three Phase I
          clinical trials for Alzhemed(TM). In these trials, the drug candidate
          was shown to be safe and well tolerated at the anticipated therapeutic
          dose in both young and elderly volunteers. We also

                                       4
<PAGE>
          established an international Clinical Advisory Board ("CAB") for
          Alzhemed(TM) comprised of distinguished experts in the fields of
          Alzheimer's Disease and Neurology.

     -    Cerebril(TM) - Hemorrhagic Stroke due to CAA: We put in place a CAB
          for Cerebril(TM), comprised of world-renowned researchers and
          clinicians.

     -    Fibrillex(TM) - AA Amyloidosis: We received a prestigious $1.4 million
          grant from the Food and Drug Administration ("FDA") in the United
          States for the Phase II/III clinical trial for Fibrillex(TM). Orphan
          Medicinal Product status for the drug in Europe was also obtained,
          typically allowing for 10 years of market exclusivity upon
          commercialization. With a total of 13 submissions to regulatory
          authorities for Investigational New Drug ("IND") status and subsequent
          approvals in the U.S., Europe and Israel, we initiated the Phase
          II/III clinical trial and patient recruitment worldwide.

EXTERNAL VALIDATION OF THE CORPORATION:

     -    We were selected by the Montreal Business Magazine as one of the top
          30 Montreal-based growth companies.

COLLABORATIVE AGREEMENTS, GRANTS AND FINANCING:

     -    We announced an important new collaboration with the United
          Kingdom-based Amersham Health (a division of Amersham PLC), for the
          creation of a diagnostic imaging tool for Alzheimer's Disease.

     -    We announced an agreement with H. Lundbeck A/S ("Lundbeck") of Denmark
          pursuant to which the Corporation regained the full ownership and
          control of its anti-amyloid drug molecules program for Alzheimer's
          Disease at no cost to the Corporation.

     -    We entered into a collaborative agreement with the University Medical
          Center-Utrecht in the Netherlands for the Corporation's Diabetes Type
          2 program, focusing on islet amyloid formation using the Corporation's
          glycosaminoglycan ("GAG") mimetic technology.

     -    We announced an agreement with Picchio Pharma for the acquisition of
          2.8 million units of the Corporation at a cost of $2.50 per unit for a
          total of $7 million. The transaction closed in July 2002. The units
          were comprised of one Common Share of the Corporation and one warrant
          to purchase a Common Share exercisable any time within a three-year
          period with a 25% premium over the issue price. Assuming the exercise
          of warrants, the total possible investment by Picchio Pharma under the
          transaction is $15.75 million. We planned to use the proceeds of the
          investment for working capital to advance the Corporation's pipeline
          of products. Dr. Francesco Bellini, O.C., chairman of Picchio Pharma,
          assumed the position of chairman of the Corporation.

INTELLECTUAL PROPERTY PORTFOLIO:

     -    Four additional patents issued which enhanced the Corporation's
          commercial and scientific assets. The patents covered:
          anti-epileptogenic agents (U.S. patent), methods and compositions to
          treat GAG-associated molecular interactions (U.S. patent),
          phosphonocarboxylate compounds (U.S. patent) and method for treating
          Amyloidosis (Mexico patent).

                                       5
<PAGE>
RECENT ANNOUNCEMENTS:

     -    Unanimous recommendation was received by Neurochem's independent Data
          Safety Monitoring Board to advance the Phase II/III clinical trial for
          Fibrillex(TM), in patients suffering from AA Amyloidosis.

     -    Two IND applications for Phase II clinical trials took effect with the
          FDA in the United States, which allowed us to advance to Phase II
          clinical trials for Alzhemed(TM) and Cerebril(TM) in patients
          suffering from Alzheimer's Disease and Hemorrhagic Stroke due to CAA.

     -    We recruited Mr. Claude Michaud to our management team as Senior
          Vice-President, Finance and Chief Financial Officer.

     -    We appointed two new board members to our board of directors, Mr.
          Peter Kruyt, Vice-President, Power Corporation of Canada, and Mr.
          Ronald M. Nordmann, Co-President, Global Health Associates, LLC.

RECENT AND EXPECTED DEVELOPMENTS

JANUARY - DECEMBER 2004:

     -    On January 14, 2004, we received our third unanimous recommendation to
          continue our pivotal Phase II/III clinical trial for Fibrillex(TM).
          The recommendation by the independent Data Safety Monitoring Board
          members was based on their recent review of the safety data from 183
          patients, of whom 77 have completed at least 12 months of the Phase
          II/III clinical study.

     -    On January 20, 2004, we issued a press release announcing that we are
          advancing our efforts to prevent and treat Alzheimer's Disease by
          forming a strategic alliance with the National Research Council of
          Canada's Institute for Biological Sciences, and more specifically,
          with Dr. Harold J. Jennings, in relation to the development of a novel
          synthetic vaccine to prevent and treat Alzheimer's Disease. We have
          also entered into a licensing agreement with PRAECIS PHARMACEUTICALS
          INCORPORATED, a leading biopharmaceutical company, relating to certain
          A(beta) amyloid peptides for use in the development of such a vaccine.

     -    On January 22, 2004, we issued a press release reporting additional
          positive results on cognitive function, as measured by the ADAS-cog
          test, of patients suffering from mild-to-moderate Alzheimer's Disease
          in an open-label Phase II extension study of Alzhemed(TM). The report
          is based on the results of 30 patients in the ongoing study who have
          completed both the three-month randomized Phase II clinical trial and
          an additional nine months of treatment in the open-label Phase II
          extension study with Alzhemed(TM).

     -    On February 11, 2004, the U.S. FDA designated Fibrillex(TM) as a fast
          track product ("FTP") for the treatment of Amyloid A Amyloidosis. The
          FTP designation expedites the development and review of new drugs.

     -    On April 8, 2004, we issued a press release announcing that we had
          signed a conditional agreement to purchase the former Shire BioChem
          facilities located in the Parc scientifique et de la haute technologie
          in Laval, Quebec, for a purchase price of $10.5 million. Upon
          completion of the transaction, we will relocate our headquarters and
          corporate and

                                       6
<PAGE>
          scientific employees to the same site. The transaction will be
          financed by asset-backed funding and cash on-hand.

     -    On April 14, 2004, we issued a press release reporting additional
          positive results on cognitive function, as measured by the ADAS-cog
          test, of patients suffering from mild-to-moderate Alzheimer's Disease
          in an open-label Phase II extension study of Alzhemed(TM). The report
          is based on the results of 23 patients in the ongoing study who have
          completed both the three-month randomized Phase II clinical trial and
          an additional 13 months of treatment in the open-label Phase II
          extension study with Alzhemed(TM). It was also announced that the
          complete data on all patients who participated in the Phase II
          clinical trial and the open-label Phase II extension study for a
          period of up to 20 months will be presented at the 9th International
          Conference on Alzheimer's Disease and Related Disorders to be held in
          Philadelphia, Pennsylvania, U.S.A., from July 17 through July 22,
          2004.

     -    On April 26, 2004, we issued a press release reporting that we had
          received our fourth consecutive positive recommendation from Data
          Safety Monitoring Board to continue Phase II/III clinical trial for
          Fibrillex(TM).

     -    We expect to initiate the first Phase III clinical trial for
          Alzhemed(TM).

     -    On April 27, 2004, we issued a press release reporting promising Phase
          II results for Cerebril(TM)'s. 24 CAA patients with lobar cerebral
          hemorrhage were randomized to receive three different doses of
          Cerebril(TM) (100, 200 and 300 mg) for a period of 12 weeks. The data
          showed no safety findings of concern based on patient's clinical
          laboratory tests, vital signs and electrocardiograms during follow-up
          physical exams. The most frequent adverse events, namely nausea and
          vomiting, were mid-to-moderate at all doses tested and transient in
          the patients receiving 100 mg or 200 mg daily of Cerebril(TM). Five
          patients withdrew prematurely; three because of nausea and vomiting
          and two because of expected complications of CAA.

ITEM 4 - NARRATIVE DESCRIPTION OF THE BUSINESS

4.1  GENERAL: OUR BUSINESS

A.   COMPANY OVERVIEW

We are a biopharmaceutical company focused on the development and
commercialization of innovative therapeutics for neurological disorders. Our
strategy is to in-license early-stage products and to focus our resources on the
management of clinical development and the commercialization of novel products.
We design and manage the clinical trials for our product candidates which are
carried out by recognized contract research organizations. We have three
programs in clinical trials and one product candidate in pre-clinical
development, each targeting disorders for which there are currently no known
cures. Because our drugs target what are known or believed to be the causes of
disorders and potentially inhibit their progression, they are known as "disease
modifiers".

As people age, specific types of normal proteins can change structure to become
long strands called amyloid fibrils. There are at least 21 different proteins
recognized as, or believed to be, causative agents of severe amyloid-related
disorders. All of these proteins can change structure by binding to components
of proteins known as glycosaminoglycans or "GAGs", generate amyloid fibrils and
accumulate as deposits in parts of the body, including various organs such as
the brain and kidneys. See "4.1 General: Our Business -- F. Our Product
Technology Platforms". These amyloid deposits can kill cells and lead to organ
failure. When deposits of a certain type of amyloid protein appear in the brain,
they may cause

                                       7
<PAGE>
Alzheimer's Disease or Hemorrhagic Stroke due to CAA. When deposits of a
different type of amyloid protein appear in several peripheral organs like the
kidneys, they can induce systemic disorders such as AA Amyloidosis.

Our product candidates consist of a new class of small molecules that mimic
specific properties of the GAGs. We call these molecules "GAG mimetics". By
binding to the amyloid protein, our molecules inhibit both the formation of
fibrils and the resulting toxic deposits. Fibrillex(TM), Alzhemed(TM) and
Cerebril(TM), our product candidates in clinical trials, are based on our GAG
mimetics technology.

In addition, our focus in neurology has led to the development of compound
candidates to prevent the development of epileptic seizures following TBI. These
compounds are designed to protect the brain from neuronal damage often
associated with TBI.

Fibrillex(TM), our most advanced product candidate, is in a Phase II/III
clinical trial. Fibrillex(TM) is designed to treat AA Amyloidosis, a systemic
disorder resulting in significant illness, organ failure (particularly of the
kidney, spleen and liver), and ultimately death.

Alzhemed(TM), our next most advanced product candidate, is our drug for the
treatment of Alzheimer's Disease, a degenerative neurological disorder that
progressively impairs a person's cognitive functions and gradually destroys the
brain. We have completed a Phase II clinical trial for Alzhemed(TM) and are
currently designing Phase III efficacy trials.

Cerebril(TM), our third program, is designed to treat Hemorrhagic Stroke due to
CAA, a fatal neurological disorder that is characterized by recurrent brain
hemorrhage. We have completed a Phase II clinical trial for Cerebril(TM), and
currently intend on designing a Phase IIb clinical trial to test efficacy.

We are also conducting pre-clinical testing on a compound, NC-1461, to prevent
the development of epileptic seizures following TBI.

The following table illustrates the stage of development, the estimated date of
FDA NDA filing and the patent expiration date for each of our product
candidates:

<TABLE>
<CAPTION>
                                                                                       ESTIMATED       PATENT
      PRODUCT                     TARGET                         STAGE OF               US NDA       EXPIRATION
     CANDIDATE                   DISORDER                       DEVELOPMENT           FILING (1)         (2)
   -------------            -------------------         ---------------------------   ----------     ----------
<S>                         <C>                         <C>                           <C>            <C>
   Fibrillex(TM)              AA Amyloidosis            Phase II/III clinical trial      2005           2014
   Alzhemed(TM)             Alzheimer's Disease          Phase III clinical trials       2007           2016
                                                              in preparation
   Cerebril(TM)             Hemorrhagic Stroke            Phase II clinical trial         --            2016
                                due to CAA                       completed
      NC-1461               Epileptic seizures             Pre-clinical testing           --            2018
                              induced by TBI
</TABLE>
----------

(1)  The actual date of NDA filing, if any, can vary widely depending on a
     variety of factors. There is no assurance that FDA approval will be
     obtained following NDA filing and there is typically a period of many
     months from filing to approval of a product. In addition, we may not be
     able to successfully commercialize our products, even if they are approved.

(2)  See "4.1 General: Our Business -- H. Intellectual Property" for a more
     detailed discussion of our patent portfolio.

B.   OUR BUSINESS STRATEGY

Our goal is to become a leading biopharmaceutical company in the development and
commercialization of innovative therapeutics for neurological disorders. To
achieve this goal, we are pursuing the following strategies:

                                       8
<PAGE>
TARGET UNMET MEDICAL NEEDS: Each of our product candidates addresses a disorder
for which there is currently no known cure. To our knowledge, Fibrillex(TM) is
the only amyloid-targeting product in advanced clinical development to treat AA
Amyloidosis. Contrary to currently available Alzheimer's Disease therapies which
treat only the symptoms of the disease, Alzhemed(TM) targets what is believed to
be its main underlying cause. To our knowledge, Cerebril(TM) is the only product
candidate targeting the underlying cause of Hemorrhagic Stroke due to CAA and
NC-1461 is a compound candidate with a novel mechanism of action targeting the
underlying cause of epileptic seizures induced by TBI. We intend to continue to
target opportunities in related neurological areas where medical needs are
unmet.

EXPEDITE CLINICAL DEVELOPMENT: We leverage our scientific and clinical
development expertise to optimize the time it takes for our product candidates
to reach market. We have already successfully brought forward three programs to
Phase II and Phase II/III clinical trials. In addition to the Phase II/III
clinical trial for Fibrillex(TM), we expect to have Alzhemed(TM) and
Cerebril(TM) in Phase III trials.

MAXIMIZE OWNERSHIP AND CONTROL OF OUR PRODUCTS: We will continue to maximize
ownership of our products throughout their development and commercialization
phases by conducting clinical development and marketing activities on our own,
or in partnership with others where appropriate. We intend to retain full
commercialization rights for products and in markets that we can adequately
exploit on our own. In cases where extensive clinical trials are required and a
commercialization strategy with global reach is needed, we intend to enter into
collaborative agreements with industry partners to develop and to co-market our
products. The decision whether to partner with respect to the development and
commercialization of our product candidates and the terms and conditions of such
agreements will be product and market specific in order to maximize our economic
benefits.

MAINTAIN A PRODUCT PIPELINE AT VARIOUS STAGES OF DEVELOPMENT THROUGH INTERNAL
DEVELOPMENT AND IN-LICENSING: We pursue sustained development by maintaining a
portfolio of products at different stages. We intend to continue feeding our
product pipeline to leverage our drug development and commercialization
infrastructure over time. In addition to developing products on our own, we
intend to continue to in-license lead compounds at early stages of development.

LEVERAGE MANAGEMENT'S SCIENTIFIC, PRODUCT DEVELOPMENT AND COMMERCIALIZATION
EXPERTISE: We are led by an experienced group of individuals with significant
industry expertise. Dr. Francesco Bellini, O.C., Chairman and Chief Executive
Officer of the Corporation, was the co-founder and former Chairman and Chief
Executive Officer of Biochem Pharma Inc., an innovative biopharmaceutical
company which was merged with Shire Pharmaceuticals Plc in 2001 in a transaction
worth approximately US$4 billion. Other members of our management team include
scientists experienced in drug discovery and development, and pharmaceutical
industry professionals having significant expertise in the areas of new product
launches, sales and marketing and finance.

C.   OUR PRODUCTS

FIBRILLEX(TM) -- OUR SOLUTION TO AA AMYLOIDOSIS

Fibrillex(TM) is our product candidate for the treatment of AA Amyloidosis. AA
Amyloidosis is a chronic, systemic disorder characterized by the over-expression
of Serum Amyloid A ("SAA"), a protein found in the blood that is produced in
response to inflammation. SAA is a precursor to an amyloid protein known as the
AA protein. In AA Amyloidosis, the AA protein forms fibrils that accumulate in
the kidney, spleen, liver and other internal organs, compromising their
function. AA Amyloidosis results from certain chronic inflammatory diseases,
such as Rheumatoid Arthritis and Inflammatory Bowel Disease, certain chronic
infections such as Tuberculosis, and from a genetic disease named Familial
Mediterranean Fever. As AA Amyloidosis progresses, it results in serious
illness, organ failure (particularly of the kidney, spleen and liver), and
ultimately death. There is at present no known cure for the disorder, and
patients with AA Amyloidosis normally have a life expectancy of five to 15
years. It is estimated that approximately 270,000 patients suffer from AA
Amyloidosis in industrialized areas and countries, including North America,
Europe and Japan.

                                       9
<PAGE>
OUR PRODUCT

Fibrillex(TM), our most advanced product candidate, is in a two-year Phase
II/III clinical trial. We have received a grant from the FDA of approximately
US$900,000 for this Phase II/III trial, which is designed to investigate the
safety and efficacy of Fibrillex(TM) in 183 patients suffering from AA
Amyloidosis at 27 sites across the United States, Europe and Israel. To our
knowledge, Fibrillex(TM) is the first amyloid-targeting drug candidate to
undergo advanced clinical testing for AA Amyloidosis. The Phase II/III clinical
trial completed patient enrolment in January 2003 and is expected to be
completed in January 2005. All patients who complete the Phase II/III clinical
trial are invited to join an open-label extension study and receive
Fibrillex(TM) for an additional two-year period. No safety issues have been
reported to us by the independent Data Safety Monitoring Board we have
established to monitor the safety of patients during the trial.

Fibrillex(TM) is a small molecule that was selected to interact with the AA
protein prior to its forming fibrils. Animal studies have shown that
Fibrillex(TM) inhibits amyloid deposition in tissues by binding to the AA
protein.

To date, the safety, tolerability and pharmacokinetic profiles of Fibrillex(TM)
have been investigated in four Phase I clinial studies in either healthy adult
volunteers or volunteers with renal impairment due to non-amyloid-related
diseases. Fibrillex(TM) was well tolerated in these studies, and no major
adverse events were reported. Fibrillex(TM) exhibited a well-characterized
pharmacokinetic profile in both subject groups. In pre-clinical trials,
Fibrillex(TM) was shown to be an effective and potent inhibitor of amyloid
fibril formation and amyloid deposition in the affected organs and to be
specific for the AA protein.

CURRENT THERAPEUTIC ALTERNATIVES

There is, at the present time, no known specific treatment for AA Amyloidosis.
Current therapies attempt to control the chronic infection or inflammatory
disease which leads to the disorder. It is thought that treatment that
suppresses the inflammation or infection will also decrease the production of
SAA and will slow the progression of the disorders. Historically, efficient
anti-inflammatory or immunosuppressor treatments have been shown to suppress or
halt the development of AA Amyloidosis in some patients with Rheumatoid
Arthritis. Patients with severe Rheumatoid Arthritis are currently being treated
through a new anti-cytokine therapy (e.g. Remicade(TM) by Centocor, Inc.,
Enbrel(TM) by Wyeth and Amgen Inc.) to minimize the inflammatory response
characteristic of Rheumatoid Arthritis. These new therapies might have an impact
on the onset and progression of AA Amyloidosis by partly controlling the
production of the precursor protein SAA. However, scientific and clinical
reports on the benefits of such new therapies for the treatment of AA
Amyloidosis are not yet available.

Several studies have demonstrated improved renal function in patients with
rheumatic conditions complicated by AA Amyloidosis following treatment with
alkylating agents. Regression of amyloid deposits has been documented in
patients with chronic infections following successful surgical excision (for
example, excision of bone in osteomyelitis). In AA Amyloidosis associated with
Familial Mediterranean Fever, treatment with colchinine has shown some
beneficial effects. In addition, an injectable compound is being tested by the
Centre for Amyloidosis and Acute Phase Proteins, Department of Medicine, Royal
Free and University College Medical School, London.

Consequently, while there are a variety of therapeutic alternatives being
investigated, none has been shown to be a safe and effective curative treatment
for AA Amyloidosis.

ALZHEMED(TM) -- OUR SOLUTION TO ALZHEIMER'S DISEASE

Alzhemed(TM) is our product candidate for Alzheimer's Disease. According to the
American Alzheimer's Association, it is estimated that over four million North
Americans are currently afflicted with Alzheimer's Disease. Alzheimer's Disease
is reported to be the third most expensive disease in terms of health care cost
in the United States, behind heart disease and cancer. The patient population is
expected to grow

                                       10
<PAGE>
significantly over the next decade, primarily due to an increasing elderly
population. In addition, the combination of awareness campaigns and the
anticipated introduction of a number of diagnostic products is expected to
markedly increase the total number of estimated cases, as previously undiagnosed
patients are confirmed and the disease is detected at an earlier stage and age.

Alzheimer's Disease is a degenerative neurological disease that progressively
impairs a person's cognitive functions and gradually destroys the brain. There
is no cure currently available for Alzheimer's Disease, and existing drugs only
treat symptoms such as cognitive function deficit for a limited period of time.
In its early stages, Alzheimer's Disease may cause only minor incidences of
memory loss or forgetfulness. However, as it progresses, the symptoms multiply
and intensify and the patient experiences the deterioration of both cognitive
and motor functions, leading ultimately to death within an average of seven to
10 years. Although popularly perceived as a disease associated with old age,
Alzheimer's Disease is increasingly being diagnosed in individuals in their 50s
and 60s.

The pathogenesis of Alzheimer's Disease is still somewhat ill-defined. It is now
well recognized in published scientific material that, although there is an
early onset form of the disease that is genetically inherited, the vast majority
of cases have no known genetic cause and occur later in life. However, common to
all cases of Alzheimer's Disease is the deposition of amyloid fibrils in the
brain. These fibrils result when the Amyloid (beta) protein ("A(beta)"),
interacts with naturally occurring GAGs. We have therefore chosen to pursue an
amyloid-based approach in developing a treatment for Alzheimer's Disease.

OUR PRODUCT

Alzhemed(TM) is designed to stop the progression of Alzheimer's Disease in
patients, whether the disease occurs sporatically or has a genetic basis. We are
currently designing two Phase III efficacy trials for Alzhemed(TM) in North
America and in Europe. The North American trial is scheduled to begin in the
first half of 2004, while the European trial is anticipated for the first half
of 2005. The trials will be large multi-center, international, randomized,
double-blind, placebo-controlled and parallel group studies that will include,
in total, approximately 1,900 patients with mild-to-moderate Alzheimer's
Disease. It is anticipated that patients will be treated for 18 months. The
effects of Alzhemed(TM) on disease progression will be measured through
cognitive function and global performance tests. We will also be examining
changes in brain volume using magnetic resonance imaging ("MRI") techniques. The
clinical study protocols are being developed in collaboration with our
Alzhemed(TM) Clinical Advisory Board and the regulatory authorities.

Alzhemed(TM) is a small molecule that binds to soluble non-fibrillar A(beta) and
prevents it from interacting with naturally occurring GAGs. By inhibiting the
binding of GAGs to soluble A(beta), Alzhemed(TM) can prevent the A(beta) protein
from assuming its fibrillar structure, thus preventing amyloid deposition in
brain tissue and the associated toxicity and neuronal damage. Alzhemed(TM) has
been shown to decrease amyloid deposition and to favor A(beta) clearance from
the brain in an animal model of Alzheimer's Disease.

In order to be effective, Alzhemed(TM) must overcome the challenge of crossing
from the blood to the brain through the protective BBB. Alzhemed(TM) has been
found to be present in both the brain of animals and in the CSF of humans
participating in our trials, suggesting that Alzhemed(TM) has the ability to
cross the BBB. The in vivo brain pharmacokinetic profile obtained in two animal
species showed brain uptake of the drug with a half-life in the brain which is
markedly longer than that found in plasma.

Our Alzhemed(TM) Phase II clinical study, which concluded in March 2003 and the
results of which were released in June 2003, primarily investigated the safety,
tolerability, pharmacokinetic and pharmacodynamic profiles of Alzhemed(TM) over
a 12-week period in patients with mild-to-moderate Alzheimer's Disease. There
were no safety findings of concern in the Phase II clinical trial. Alzhemed(TM)
was detected in CSF, indicating an ability to cross the BBB. As secondary
objectives, the trial evaluated, on an exploratory basis, the effect of
Alzhemed(TM) on amyloid protein levels in CSF and on the cognitive function of
the Alzheimer's Disease patients participating in the study. Alzhemed(TM) was
found, after 12 weeks of use, to decrease the level of A(beta)(42) (the more
fibrillogenic form of the two A(beta) proteins) in CSF

                                       11
<PAGE>
in a dose-related fashion. A 21-month open-label extension study was initiated
in January of 2003, with patients invited to join the extension study as they
completed the Phase II trial. Patients enrolling in this open-label extension
study are given the highest dose of Alzhemed(TM). The results in standard
cognitive tests at 16 months were consistent with a stabilizing effect of
Alzhemed(TM) on cognitive function tests.

We have completed four Phase I clinical studies to assess the safety,
tolerability and pharmacokinetic profiles of Alzhemed(TM) (and Cerebril(TM),
being the same compound as Alzhemed(TM)) in 117 healthy volunteers (including 37
elderly persons). Alzhemed(TM) has also undergone extensive toxicology and
pharmacokinetic investigations in two animal species. In these studies, no
safety findings of concern were found and Alzhemed(TM)'s pharmacokinetic profile
was well characterized.

CURRENT THERAPEUTIC ALTERNATIVES

None of the existing treatments for Alzheimer's Disease is curative. Patients
with the disease are treated with drugs which target only its symptoms. These
drugs enhance patients' cognitive functions and general behaviour for a certain
period of time but do not stop the progression of the disease.

Patients with Alzheimer's Disease are usually treated with drugs designed to
improve their cognitive function using compounds which maintain a higher
concentration of neurotransmitters which results in improved cognitive function
and behavior. The most prescribed drugs in this category are Aricept(TM) (Pfizer
Inc./Eisai Company, Ltd.), Exelon(TM) (Novartis AG), Reminyl(TM) (Shire
Pharmaceuticals Group Plc and Janssen Pharmaceutica Products, L.P.), Ebixa(TM)
(Merz Pharma GmbH & Co. KgaA) and Namenda(TM) (Forest Laboratories Inc.), which
is the trade name used in the U.S. for Ebixa(TM).

Several pharmaceutical companies have drug development efforts aimed at the
development of drugs to stop the progression of Alzheimer's Disease. The
majority of these programs target different aspects of the amyloid protein. The
different strategies consist in stopping the production of A(beta), blocking the
fibril formation or clearing the deposits from the brain. The major companies
working on an amyloid-based therapeutic approach are Merck & Co., Bristol-Myers
Squibb Company, Prana Biotechnology Limited, Axonyx Inc., PRAECIS
PHARMACEUTICALS INCORPORATED, Eunoe Incorporated, GlaxoSmithKline plc and Elan
Corporation, plc. However, to our knowledge, Alzhemed(TM) is the only
orally-administered disease modifying product candidate with preliminary
pharmacological proof-of-concept in humans scheduled to enter Phase III clinical
trials.

CEREBRIL(TM) -- OUR SOLUTION TO HEMORRHAGIC STROKE DUE TO CAA

Cerebril(TM) is our product candidate to treat Hemorrhagic Stroke due to CAA.
Hemorrhagic Stroke due to CAA is a syndrome of recurrent strokes caused by
amyloid deposits that cause blood vessels in the brain to rupture or otherwise
malfunction. This type of stroke represents approximately seven percent of all
strokes, with the incidence increasing as the population ages. It is typically
diagnosed in patients aged 55 years or older with multiple hemorrhages confined
to lobar brain regions and no other cause of hemorrhage. CAA can appear alone in
some patients and is also a common pathology found in 50% or more of patients
with Alzheimer's Disease. Approximately five percent of patients with
Alzheimer's Disease experience Hemorrhagic Stroke due to CAA. It is estimated
that approximately 135,000 patients suffer from Hemorrhagic Stroke due to CAA
each year (either alone or in association with Alzheimer's Disease).

Hemorrhagic Stroke due to CAA remains a largely untreated disorder which is
often undiagnosed unless it is confirmed by an autopsy. It ranges in severity
from asymptomatic amyloid deposition in otherwise normal cerebral vessels to
lobar hemorrhages resulting from progressive invasion of the vascular wall by
amyloid fibrils. 70% to 80% of lobar hemorrhages are not fatal in their first
occurrence, providing the opportunity for therapeutic intervention. However,
recurrent lobar hemorrhages are frequent and are often fatal within just a few
years.

                                       12
<PAGE>
OUR PRODUCT

Cerebril(TM) is designed to prevent the recurrence of Hemorrhagic Stroke due to
CAA by reducing the deposit of amyloid fibrils within the microvasculature of
the brain. The active ingredient in Cerebril(TM) is the same compound, and
Cerebril(TM) has the same properties, as Alzhemed(TM).

Cerebril(TM) has completed a Phase II clinical trial for which our lead
investigator, Dr. Steven M. Greenberg of Massachusetts General Hospital in
Boston has been awarded a grant of approximately US$1 million from the National
Institute of Health. Enrollment was completed in October 2003 and the trial was
being conducted in five centers in the United States. The study involved a
12-week treatment and was primarily investigating the safety, tolerability,
pharmacokinetic and pharmacodynamic profiles of the product candidate in 24
patients who have suffered a lobar hemorrhage. The Phase II study also aimed to
determine the optimal dosing regimens for subsequent testing of efficacy.
Secondary objectives included assessing the effect of Cerebril(TM) on
neurological function and the occurrence of new lesions detectable by MRI. An
independent Data Safety Monitoring Board was established to monitor the safety
of patients throughout the duration of the study. The first meeting of our Data
Safety Monitoring Board for Cerebril(TM) was held after the first eight patients
had completed two weeks of treatment, and no safety findings of concern were
reported to us.

Cerebril(TM) has been found to markedly reduce CAA in an animal model.
Cerebril(TM), being the same compound as Alzhemed(TM), has undergone
comprehensive pre-clinical and clinical trials. See "Alzhemed(TM) -- Our
solution to Alzheimer's Disease".

CURRENT THERAPEUTIC ALTERNATIVES

No effective therapy has yet been developed for Hemorrhagic Stroke due to CAA.
Patients experiencing Hemorrhagic Stroke due to CAA are currently offered
palliative therapies which are not directed at treating the disorder. To our
knowledge, no specific treatment aimed at preventing the recurrence of
Hemorrhagic Stroke due to CAA through the inhibition of amyloid fibril formation
and deposition is available.

Novartis AG, Aventis and Pfizer Inc. have reported work done in research in CAA,
mostly using animal models where CAA has been observed, but to our knowledge
none has identified a specific treatment approach to the disorder or advanced to
a pre-clinical stage of development.

NC-1461 -- OUR SOLUTION TO THE DEVELOPMENT OF EPILEPTIC SEIZURES FOLLOWING TBI

We have identified a series of compounds, of which NC-1461 is the lead
candidate, to prevent the development of epileptic seizures following TBI.

In the United States, approximately 1.5 million people sustain a TBI each year.
TBI causes severe damage to the brain with internal bleeding, inflammation and
neuronal cell death. TBI can lead very early on to an imbalance between the
activities of two specialized types of neuronal cells. This imbalance is due to
the uncontrolled up-regulation of excitatory neurons, coupled with a strong
down-regulation of inhibitory neurons. The imbalance leads to an uncontrolled
electrical discharge which manifests itself as an epileptic seizure.
Approximately 13% of patients who have had a TBI will start experiencing
epileptic seizures 12 to 18 months following their injury. The brain tissue
which is damaged as a result of TBI and which exhibits the neurological
imbalance is called an "epileptic focus" and the process is referred to as
"epileptogenesis".

Since it is impossible to identify patients with a TBI who will develop
epileptic seizures, all patients who have suffered a TBI would benefit from
treatment early on following the injury to prevent the later development of
seizures.

                                       13
<PAGE>
OUR PRODUCTS

In collaboration with Dr. Don Weaver, formerly of Queen's University of
Kingston, Ontario, and now at Dalhousie University of Dalhousie, Nova Scotia, we
have identified a series of compounds, of which the lead candidate is NC-1461,
that we are developing as a treatment for patients at risk of developing
epileptic seizures following a TBI. NC-1461 has been shown to cross the BBB and
to have anti-epileptogenic activity in an animal model of spontaneous recurrent
seizures following chemically-induced brain injury.

Our compounds are designed to have dual action to: (i) bring down the activity
of the excitatory neurons while (ii) increasing the activity of the inhibitory
neurons. To achieve such an activity profile, the molecules need to act at the
level of both the excitatory and inhibitory responses. This type of activity
profile (although weak) has already been observed with (beta)-alanines. A series
of (beta)-alanine analogs was therefore developed to identify compounds which
would possess this activity profile and be able to maintain normal neuronal
electrical activities early-on following a TBI, therefore preventing the
establishment of epileptic foci. In pre-clinical studies, NC-1461 has indicated
a potential for a dual mechanism of action. Promising results have also been
achieved in animal models of epileptogenesis.

CURRENT THERAPEUTIC ALTERNATIVES

Presently, no treatment is available to TBI patients to prevent the
establishment of the epileptic foci and the resulting onset of epileptic
seizures. Drugs currently on the market aim only at preventing the onset
epileptic seizures. None of these anti-convulsant drugs has been shown to
prevent or treat the neurological damage resulting from TBI which leads to the
development of epileptic foci and the resulting seizures.

Although several pharmaceutical companies are focusing on developing more
effective therapeutics to treat epileptic seizures, we are not aware of any
other company developing a therapy based on compounds with dual activity or with
the same mechanism of action as our compounds. NeuroSearch A/S of Denmark has
reported anti-epileptogenic activity with a compound which is presently in a
Phase II trial for the treatment of seizures in patients already suffering from
Epilepsy. UCB Pharma SA of Belgium has also reported anti-epileptogenic activity
with a compound presently in Phase I trials which is being developed as an
anti-convulsant drug.

D.   SALES AND MARKETING

We intend to pursue different commercialization strategies for our products in
different parts of the world. We intend to retain full commercialization rights
for products in markets that we can adequately exploit on our own. In other
markets, we intend to partner with third parties through collaborative
arrangements, including co-marketing agreements. In addition, in various
designated markets, we intend to enter into out-licensing arrangements.

FIBRILLEX(TM): Because AA Amyloidosis is a disorder affecting a specific patient
population and treated by a well-defined pool of specialists, we intend to
develop and deploy our own sales and marketing force for the commercialization
of Fibrillex(TM) in North America and in Europe in order to take advantage of
local commercialization expertise while maximizing ownership for our products,
and to out-license in the Japanese market due to specific clinical development
and regulatory requirements there. We intend to capitalize on any benefits which
result from Fibrillex(TM) having been granted Orphan Drug status in the United
States and Europe and the Fast Track Product Designation in the United States.

ALZHEMED(TM): Alzheimer's Disease is characterized by a large and growing
patient population and a broad prescriber base composed of general
practitioners, internists and specialists. We therefore intend to partner with a
leading pharmaceutical company possessing a global marketing and commercial
network for the commercialization, marketing and sale of Alzhemed(TM).

                                       14
<PAGE>
CEREBRIL(TM): Cerebril(TM) targets a small and well-defined population primarily
treated by a relatively small group of specialists. Therefore, our
commercialization strategy for Cerebril(TM) is similar to our strategy for
Fibrillex(TM). Cerebril(TM) will require targeted sales efforts and will provide
us with the opportunity to expand our anticipated Fibrillex(TM) sales force in
North America, while seeking a distribution partner in Europe and an out-license
arrangement in Japan. Since Cerebril(TM) and Alzhemed(TM) are made up of the
same compound, potential commercialization synergies between the two products
will be evaluated as we explore partnership arrangements for Alzhemed(TM).

E.   OTHER PRODUCT CANDIDATES

In addition to our ongoing clinical work, we have an active research and
development program aimed at feeding our product pipeline.

SECOND GENERATION ANTI-AMYLOID COMPOUNDS

Know-how acquired through the development of Alzhemed(TM) has led to the design
and synthesis of a second generation of anti-amyloid compounds based on our GAG
mimetics technology. The compounds present, both in vitro and in vivo, a
promising anti-amyloid activity profile. We have already conducted preliminary
studies on approximately 200 of these compounds.

VACCINE

Our approach to Alzheimer's Disease has been to focus on targeting the A(beta)
protein before it organizes into fibrils and causes neuronal damage. One
approach to block the development of Alzheimer's Disease is to prevent the
damage caused by A(beta) by intervening early using a vaccine strategy. Our
vaccine approach consists of a modified fragment of A(beta) peptide to induce an
immune response which targets soluble A(beta) (prior to any structural change
which leads to fibril formation).

Preliminary in vivo studies have shown promising results where immune
recognition of soluble A(beta) reduces brain amyloid protein levels but does not
attack fibrillar deposits, thereby minimizing the risk of brain inflammation.

LIBRARY OF PRODUCT CANDIDATES

To date, we have produced a library of potential product candidates of over
2,000 molecules through traditional organic chemistry. The library comprises
several different classes of potential pharmacophores, sulfates, sulphonates,
phosphonates, carboxylates and a number of other functional groups, all of which
address amyloid proteins. In addition, we have access to compound libraries
through alliances, collaborations and commercial arrangements.

Through our portfolio of in vitro and in vivo screening assays, we have
identified lead drug molecules with potent anti-amyloid activity, the most
promising of which are undergoing further research and development.

F.   OUR PRODUCT TECHNOLOGY PLATFORMS

GAG MIMETICS FOR AMYLOID-RELATED DISORDERS

Our therapeutic approach to amyloid-related disorders aims at preventing the
onset and arresting the progression of the targeted disorders. We have
identified small molecules which can inhibit the formation of amyloid deposits
and thereby prevent amyloid-induced toxicity.

A variety of neurological as well as systemic disorders are mediated by a class
of proteins known as amyloids. Amyloids are naturally occurring proteins found
in the central nervous system, the blood and elsewhere in the body. To date, at
least 21 different unrelated proteins have been found to be capable of

                                       15
<PAGE>
changing structure, depositing in different tissues and causing different types
of amyloid diseases. During amyloid fibril formation, the amyloid protein
associates with other proteins, such as GAGs, which bind to the amyloid protein,
promote fibril formation and protect the fibrils from being degraded by enzymes.
Our molecules, designed to mimic specific properties of the GAGs and therefore
called "GAG mimetics", attach to the amyloid protein and inhibit the development
of amyloid deposits and associated toxicity.

The first of the following diagrams illustrates the interaction between GAGs and
an amyloid protein during the process of fibril formation. The next diagram
shows how our GAG mimetics can block the amyloid fibril formation process. By
binding to the amyloid protein, our molecules can prevent the natural GAGs from
binding to the amyloid protein, preventing the promotion of amyloid fibril
formation. We believe that our GAG mimetic approach presents an effective
therapeutic intervention which may ultimately either be combined with or replace
other approaches which treat only the symptoms of the disorders we are
targeting.

<TABLE>
<S>                                                          <C>
         "(GRAPHIC SHOWING WITHOUT GAG MIMETICS)"                     "(GRAPHIC SHOWING WITH GAG MIMETICS)"
The amyloid fibril formation and associated elongation of    Our compounds act as mimetics and target GAG binding
the fibrils is modulated by the presence of GAGs. The GAGs   sites on the amyloid protein. In this capacity, they
are involved in promoting amyloid fibril formation and its   compete with natural GAGs which results in interference
interaction with cells.                                      with amyloid fibril formation and prevention of
                                                             cellular toxicity which damages the surrounding cells.
</TABLE>

DUAL ACTION ANTI-EPILEPTOGENICS

Our drug design aims at correcting the neurotransmitter imbalance created early
on following a TBI using compounds capable of dual action: (i) bringing down the
activity of the excitatory neurons and (ii) up-regulating the activity of the
inhibitory neurons, thereby restoring the natural balance.

We have developed and synthesized a library of approximately 300 (beta)-alanine
analogs which demonstrate this dual activity. In addition, we are evaluating the
anti-epileptogenic and anti-convulsion activities of a small library of uracil
and dihydrouracil compounds. In in vivo and in vitro experiments, we have found
that these compounds (which may get metabolized into (beta)-alanine analogs in
vivo) are capable of (i) preventing the development of epileptogenesis following
a TBI or (ii) blocking the onset of epileptic seizures. We believe that such an
activity profile is unique to our compounds and may lead to the development of
therapeutics addressing both epileptogenesis and the control of epileptic
seizures.

                                       16
<PAGE>
G.   IMPORTANCE OF IDENTIFIABLE INTANGIBLE PROPERTIES

RESEARCH ALLIANCES, LICENSE AGREEMENTS AND GOVERNMENT FUNDING AGREEMENTS

We have entered into licensing agreements with Queen's University (Kingston,
Ontario, Canada) with respect to amyloid and Epilepsy research; research
alliances with University of Montreal -- Ste. Justine Hospital (Montreal,
Quebec, Canada) to test animal models relating to our development of compounds
to prevent epileptic seizures following TBI; and service agreements with the
National Research Council of Canada (Montreal, Quebec, Canada) to develop
techniques to measure A(beta) protein. Neurochem has also concluded a strategic
alliance with the National Research Council of Canada and Dr. Harold J. Jennings
(Ottawa, Ontario, Canada) to collaborate on the discovery and assessment of
certain vaccine approaches in animal models, and work towards the development of
a specific vaccine using amyloid protein fragment conjugates. This collaboration
also includes the possibility of preclinical and clinical development, as well
as future commercialization in the field of A(beta)-peptide-protein conjugates.
Through a licensing agreement with PRAECIS PHARMACEUTICALS INCORPORATED
(Waltham, Massachusetts, U.S.A.), Neurochem is expanding its pool of
intellectual property relating to specific A(beta)-derived peptide sequences for
use in the development of a novel synthetic vaccine to prevent and treat
Alzheimer's Disease.

In addition, we have entered into an agreement with Technology Partnerships
Canada ("TPC") regarding financial assistance to be provided by the Government
of Canada for the development of one or more oral therapeutic products for the
treatment of Alzheimer's Disease. To date, we have received approximately $6.7
million under this agreement and we will pay to TPC a royalty equal to 7.24% of
gross revenues from the commercialization of effective orally-administered
therapeutics for the treatment of Alzheimer's Disease until June 30, 2010. After
June 30, 2010, we may have to continue to pay royalties to TPC until such time
as the aggregate amount of royalties paid pursuant to the agreement reaches
$20.5 million.

H.   INTELLECTUAL PROPERTY

We, and the pharmaceutical industry in general, attach significant importance to
patents and the protection of industrial secrets for new technologies, products
and processes. Accordingly, our success depends, in part, on our ability to
obtain patents or rights thereto, protect our commercial secrets and carry on
our activities without infringing the rights of third parties. Our strategic
approach is to build a portfolio which provides broad protection of our
technology, as well as a tiered patent claim structure to provide back-up patent
positions in commercially significant areas. We have established internal
mechanisms for developing strategy and identifying patentable technology,
including a patent committee and frequent status reports from our scientific
personnel. We have filed for patent protection on our novel compositions,
methods of therapy, screening assays for identifying new lead drug candidates,
and diagnostic procedures. We generally seek to protect our proprietary
treatment methods and drug discovery techniques by filing patent applications
unless we believe that keeping an invention as a trade secret is preferable. In
addition, it is our policy to require our employees, consultants, members of the
scientific and clinical advisory boards and parties to collaborative agreements
to enter into agreements which typically provide (among other things) that
specified information obtained or developed during the relationship remain
confidential and that work product belongs to us.

We currently hold rights to a number of patents and patent applications in the
United States and Canada relating to our technology, as well as foreign
counterparts for many of these patents and patent applications. A number of
these patents and patent applications were filed by Queen's University and
licensed to us. Other patents and patent applications are co-owned by Queen's
University and us or by us and the University of British Columbia. A number of
other patents and patent applications were filed by us. With respect to our
product candidates and product pipeline, our patent portfolio is continually
expanding, focusing on our commercialization and clinical efforts.

We are a party to license agreements under which we have obtained rights to use
certain technologies to develop our product candidates. The licenses to which we
are a party impose various milestones,

                                       17
<PAGE>
commercialization, sublicensing, royalty and other payment, insurance,
indemnification and other obligations on us and are subject to certain
reservations of rights.

The following sets forth the status of our trademarks and trademark applications
for our product candidates:

<TABLE>
<CAPTION>
                TRADEMARK               COUNTRY           STATUS
              ----------------       -------------        -------
<S>                                  <C>                  <C>
              Fibrillex(TM)...           Canada           Allowed
              Fibrillex(TM)...       United States        Allowed
              Fibrillex(TM)...          Germany           Allowed
              Fibrillex(TM)...           Spain            Allowed
              Fibrillex(TM)...           Japan            Allowed
              Alzhemed(TM)....           Canada           Allowed
              Alzhemed(TM)....       United States        Pending
              Cerebril(TM)....           Canada           Pending
              Cerebril(TM)....       United States        Pending
              Neuroxil(TM)....           Canada           Allowed
</TABLE>

We are currently in discussion with Alza Corporation of California regarding an
opposition it has filed to our registration of the trademark Alzhemed(TM) in the
United States.

All of our intellectual property, with the exception of the commercialization
rights of our products in Canada and the applications for our Canadian
trademarks (which are owned by Neurochem Inc.), is owned by Neurochem
(International) Limited, a Swiss corporation and an indirect wholly-owned
subsidiary of Neurochem Inc. See "2.2 Corporate Structure -- Intercorporate
Relationships".

I.   HUMAN RESOURCES

We currently employ 128 people, the majority of which are involved in R&D and
drug development. Of these 128 people, 27 are scientists with Ph.D degrees and
21 are scientists with M.Sc. degrees.

ITEM 5 - SELECTED CONSOLIDATED FINANCIAL INFORMATION

5.1  ANNUAL INFORMATION

The following table sets forth selected consolidated financial data for the last
three fiscal years of the Corporation and should be read in conjunction with the
audited financial statements of the Corporation for the six-month period ended
December 31, 2003 and years ended June 30, 2003 and June 30, 2002.

                                       18
<PAGE>

<TABLE>
<CAPTION>
                            ----------------------    -----------------    -----------------
                            Six-month period ended    Fiscal year ended    Fiscal year ended
                               December 31, 2003        June 30, 2003        June 30, 2002
                            ----------------------    -----------------    -----------------
                                                               $                    $
                                (in thousand of dollars, except for earnings per share)
<S>                         <C>                       <C>                  <C>
Revenues(1)                             Nil                   Nil                 2,271
Net earnings (loss)                 (16,773)              (19,618)              (13,475)
  per share                           (0.63)                (0.90)                (0.75)
Total assets                         94,225                31,160                32,733
Long-term debt                          416                   633                 1,044
</TABLE>

5.2  DIVIDENDS

We have not declared any dividends since our incorporation. Any future
determination to pay dividends will remain at the discretion of our Board of
Directors and will depend on our financial condition, results of operation,
capital requirements and such other factors as our Board of Directors deems
relevant.

ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS

The "Management's Discussion and Analysis" on pages 9 through 20 of the Annual
Report with respect to the six-month period ended December 31, 2003, is
incorporated herein by reference.

6.1  QUARTERLY INFORMATION

The following table sets forth selected consolidated financial data for the last
eight quarters of the Corporation.

<TABLE>
<CAPTION>
                        ----------------------   -----------------------------------------      -----------------
                        Six-month period ended               Fiscal year ended                  Fiscal year ended
                          December 31, 2003                    June 30, 2003                      June 30, 2002
                        ----------------------   -----------------------------------------      -----------------
                             Q1         Q2         Q1          Q2         Q3          Q4          Q3          Q4
                             $           $          $           $          $           $           $           $
                                         (in thousands of dollars, except for earnings per share)
<S>                     <C>           <C>        <C>         <C>        <C>         <C>         <C>        <C>
Revenues                    Nil         Nil        Nil         Nil        Nil         Nil         Nil        Nil
Net earnings (loss)       (6,787)     (9,986)    (3,962)     (6,577)    (5,609)     (3,470)     (4,277)    (4,694)
  per share                (0.28)      (0.34)     (0.20)      (0.31)     (0.25)      (0.15)      (0.24)     (0.26)
  diluted                  (0.28)      (0.34)     (0.20)      (0.31)     (0.25)      (0.15)      (0.24)     (0.26)
</TABLE>

ITEM 7 - MARKET FOR SECURITIES

Our Common Shares are listed on The Toronto Stock Exchange since June 21, 2000
under the symbol "NRM", and quoted on the NASDAQ since September 18, 2003 under
the symbol "NRMX".

ITEM 8 - DIRECTORS AND OFFICERS

The following table lists our directors and executive officers. All members of
the Board of Directors will hold their positions until the next annual meeting
of shareholders of the Corporation.

                                       19
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                        YEAR FIRST
   NAME AND MUNICIPALITY                                                                                                  BECAME A
       OF RESIDENCE                                 PRINCIPAL OCCUPATION                         OFFICE                   DIRECTOR
-------------------------------------     ----------------------------------------   ------------------------------     ----------
<S>                                       <C>                                        <C>                                <C>
Dr. Francesco Bellini, O.C.(1).......      Chairman and Chief Executive Officer(2)    Chairman of the Board, Chief         2002
Montreal, Quebec                                                                     Executive Officer and Director

Dr. Colin Bier(3),(4)................                   Consultant                              Director                   1996
Montreal, Quebec

Richard Cherney......................                Co-Managing Partner,                       Director                   2003
Montreal, Quebec                             Davies Ward Phillips & Vineberg LLP
                                                        (a law firm)

Peter Kruyt(1),(4),(5)...............                  Vice President,                          Director                   2002
Montreal, Quebec                                Power Corporation of Canada
                                                 (a diversified management
                                                    and holding company)

Dr. Frederick H. Lowy(5).............            Rector and Vice-Chancelor                      Director                   2003
Montreal, Quebec                                  of Concordia University

John Molloy(3).......................      President and Chief Executive Officer,               Director                   1994
Kingston, Ontario                                   Parteq Research and
                                                  Development Innovations,
                                                    Queen's University
                                                 (a university technology
                                                   transfer organization)

Ronald M. Nordmann(1),(4),(5),(6)....                  Co-President,                            Director                   2002
Little Falls, New Jersey                       Global Health Associates, LLC
                                          (a consulting company to the healthcare
                                           and financial services industries)(7)

Graeme K. Rutledge(3)................                  Consultant(8)                            Director                   2003
Perth, Ontario

Dr. Emil Skamene(5)..................              Scientific Director,                         Director                   2002
Montreal, Quebec                             Research Institute of the McGill
                                                  University Health Centre
                                                (an academic health centre)

Dr. Philippe Calais..................                   President(9)                            President                    --
Hudson, Quebec

Claude Michaud.......................              Senior Vice-President,                 Senior Vice-President,             --
Montreal, Quebec                                Finance and Chief Financial            Finance and Chief Financial
                                                        Officer(10)                             Officer

Dr. Denis Garceau....................                 Vice-President,                        Vice-President,                 --
Montreal, Quebec                                     Drug Development                       Drug Development

Dr. Francine Gervais.................                 Vice-President,                        Vice-President,                 --
Montreal, Quebec                                 Research and Development               Research and Development

Dr. Lise Hebert......................                 Vice-President,                        Vice-President,                 --
Montreal, Quebec                               Corporate Communications(11)             Corporate Communications

Christine Lennon.....................                 Vice-President,                        Vice-President,                 --
Montreal, Quebec                                 Business Development(12)                 Business Development

Judith Paquin........................                 Vice-President,                        Vice-President,                 --
Montreal, Quebec                                    Human Resources(13)                      Human Resources

David Skinner........................            Director of Legal Affairs,            Director of Legal Affairs,            --
Montreal, Quebec                               General Counsel and Corporate         General Counsel and Corporate
                                                       Secretary(14)                          Secretary
</TABLE>

                                       20
<PAGE>
NOTES:

(1)  Pursuant to a subscription agreement dated July 25, 2002, by and between
     Picchio Pharma, P.P. Luxco Holdings II S.A.R.L. and the Corporation, the
     Corporation covenanted to cause a total of three nominees of Picchio Pharma
     Inc. to be included in the list of management nominees to be proposed for
     election to the Board at each shareholders meeting occurring following the
     date thereof. Picchio Pharma's right shall terminate on the date it ceases
     to beneficially hold at least 15% of the issued and outstanding Common
     Shares (including Common Shares issuable upon exercise of the warrants
     issued to them concurrently). Dr. Bellini and Messrs. Kruyt and Nordmann
     are the current nominees of Picchio Pharma.

(2)  Prior to his appointment as Chief Executive Officer of the Corporation on
     December 11, 2002, Dr. Bellini's principal occupation was Chairman of
     Picchio Pharma, a biopharmaceutical investment company, a position he
     continues to hold. Prior to 2001, Dr. Bellini was Chairman and Chief
     Executive Officer of Biochem Pharma Inc. (now Shire Biochem Inc.), a
     biopharmaceutical company which he co-founded in 1986.

(3)  Member of the Audit Committee.

(4)  Member of the Compensation Committee.

(5)  Member of the Nominating and Corporate Governance Committee.

(6)  Mr. Nordmann is the Lead Director of the Corporation.

(7)  From 1994 through 1999, Mr. Nordmann was a partner at Deerfield Management
     Inc., a healthcare equity fund.

(8)  Prior to June 2002, Mr. Rutledge was a Senior Partner at Deloitte & Touche,
     Canada, an accounting firm.

(9)  Prior to January 2003, Dr. Calais was General Manager at Servier Canada
     Inc., part of the French private pharmaceutical group.

(10) Prior to 2002, Mr. Michaud was Vice-President and Chief Financial Officer
     of C-Mac Industries Inc., a global electronic manufacturing services
     company, and prior to 2001, was Managing Director, Investment Banking at
     Scotia Capital Inc., a Canadian investment bank.

(11) Dr. Hebert was promoted to Vice-President, Corporate Communications on
     December 12, 2002. Prior to that date, she was Director, Communications and
     Investor Relations.

(12) Prior to January 2004, Ms. Lennon was Venture Advisor for the Biotechnology
     and Life Sciences investment sector of CDP Capital Inc, a division of a
     pension fund. Prior to this, Ms. Lennon was Vice President, Global
     Commercial Development - Oncology of Biochem Pharma Inc. (now Shire Biochem
     Inc.), a biopharmaceutical company.

(13) Prior to January 2004, Ms. Paquin was Vice President, Human Resources of
     Schering Canada Inc., a biopharmaceutical company.

(14) Prior to April 2003, Mr. Skinner served as Commercial Counsel and Deputy to
     the Director of Commercial and Legal Affairs in the London, England office
     of Antfactory Limited, a global venture capital firm. Mr. Skinner also
     served in the corporate commercial departments of the law firms Freshfields
     Bruckhaus Deringer in London, England and Stikeman Elliott in Montreal,
     Budapest and London.

In our management proxy circular dated April 6, 2004, all of the above listed
directors were nominated by management for election as directors, except for Mr.
Richard Cherney. Management also proposed the additional nomination of Messrs.
Jean-Guy Desjardins and Francois Legault, both from Montreal, Quebec, as
directors.

As of May 11, 2004, the directors and executive officers, as a group,
beneficially owned or exercised control or direction over approximately
7,198,124 of the Common Shares outstanding.(1)

The following is a description of the current committees of the Board:

COMMITTEES OF THE BOARD

AUDIT COMMITTEE

The mandate of the Audit Committee includes assisting the Board in its oversight
of (i) the integrity of the Corporation's financial statements, financial
reporting process, system of internal controls over financial reporting, and
audit process, (ii) the Corporation's compliance with, and process for
monitoring compliance with, legal and regulatory requirements, (iii) the
independent auditors' qualifications and

--------
(1)     Included in this amount are 166,666 Common Shares owned directly by
Dr. Bellini and the 6,718,368 Common Shares owned indirectly by Picchio Pharma
of which the FMRC Family Trust is a 50% owner. Dr. Bellini is a beneficiary of
the FMRC Family Trust.

                                       21
<PAGE>
independence, and (iv) the performance of the independent auditors. The current
members of the Audit Committee are Mr. Graeme K. Rutledge (chair), Dr. Colin
Bier and Mr. John Molloy.

Under the listing requirements of NASDAQ to become effective July 31, 2005, no
director who is not independent may be appointed to the audit committee of a
company. Mr. Molloy would not be independent under these listing requirements
when they become effective, as he is the President and Chief Executive Officer
of Parteq Research and Development Innovations, Queen's University ("Parteq").
However, in accordance with those NASDAQ listing requirements, the Board has
resolved that the continued membership of Mr. Molloy on the Audit Committee is
required in the best interests of the Corporation and its shareholders because
of his knowledge of the Corporation and experience in such matters.

COMPENSATION COMMITTEE

The mandate of the Compensation Committee includes reviewing the compensation
arrangements for the Corporation's employees, including executive officers and
directors and making recommendations to the Board with respect to such
compensation arrangements, as well making recommendations to the Board with
respect to the Corporation's incentive compensation plans and equity-based plans
and to oversee succession planning. The Compensation Committee is also
responsible for preparing an annual report on executive compensation for
purposes of disclosure to shareholders. The current members of the Compensation
Committee are Dr. Colin Bier (chair), Mr. Peter Kruyt and Mr. Ronald M.
Nordmann.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

The mandate of the Nominating and Corporate Governance Committee is to develop
and recommend to the Board a set of corporate governance principles and to
prepare and review the disclosure with respect to, and the operation of, the
Corporation's system of corporate governance, before such disclosure is
submitted to the Board for its approval. In addition, the Nominating and
Corporate Governance Committee is responsible for the review and periodic update
of the Corporation's Code of Ethics which governs the conduct of the
Corporation's directors, officers and other employees. Moreover, the Nominating
and Corporate Governance Committee is mandated to examine, on an annual basis,
the size and composition of the Board and, if appropriate, recommend to the
Board a program to establish a Board comprised of members who facilitate
effective decision-making. Finally, the Nominating and Corporate Governance
Committee shall identify individuals qualified to become members of the Board,
recommend to the Board nominees to be put before shareholders at each annual
meeting and recommend to the Board a process for board, committee and director
assessment. The current members of the Nominating and Corporate Governance
Committee are Mr. Ronald M. Nordmann (chair), Dr. Frederick H. Lowy, Mr. Peter
Kruyt and Dr. Emil Skamene.

ITEM 9 - AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Graeme K. Rutledge is an audit
committee financial expert.

ITEM 10 - PRINCIPAL ACCOUNTANT FEES AND SERVICES

We have paid KPMG LLP ("KPMG"), our external auditors, the following fees in
each of the last two fiscal periods:

                                       22
<PAGE>
AUDIT FEES

The following sets forth the aggregate fees paid for each of the two past fiscal
periods for professional fees to KPMG for the audit of the annual financial
statements or for services normally provided by KPMG in connection with
statutory and regulatory filings or engagements for those fiscal periods.

<TABLE>
<S>                                                             <C>
         Fiscal year ended June 30, 2003                        $53,700

         Audit of consolidated financial statements
          for the six-month period ended December 31, 2003      $64,040
</TABLE>

AUDIT-RELATED FEES

The following sets forth additional aggregate fees to those reported under
"Audit Fees" in each of the last two fiscal periods for assurance and related
services by KPMG that are reasonably related to the performance of the audit or
review of the financial statements:

<TABLE>
<S>                                                             <C>
         Fiscal year ended June 30, 2003
         Review of interim financial statements                 $23,200
         Translation services                                   $16,200

         Six-month period ended December 31, 2003
         Review of interim financial statements                 $10,500
         Public offering                                        $206,000
         Comments on accounting treatment
          or requirements of various transactions               $43,870
         Translation services                                   $31,400
</TABLE>

NON-AUDIT AND TAX FEES

The following sets forth the aggregate fees billed in each of the last two
fiscal periods for professional services rendered by KPMG for assistance with a
corporate reorganization, tax compliance, tax advice, tax planning and review of
business opportunities:

<TABLE>
<S>                                                            <C>
         Fiscal year ended June 30, 2003
         Assistance with corporate reorganization
          and tax compliance work                              $119,700

         Six-month period ended December 31, 2003
         Review of various business opportunities,
          sales tax and US tax issues                          $38,300
</TABLE>

ALL OTHER FEES

The following sets forth the aggregate fees billed in each of the last two
fiscal periods for products and services provided by the principal accountant
not described above:

<TABLE>
<S>                                                             <C>
         Fiscal year ended June 30, 2003                        None

         Six-month period ended December 31, 2003               None
</TABLE>

Our Audit Committee pre-approves every engagement by KPMG to render audit or
non-audit services. All of the services described above were approved by the
audit committee.

                                       23
<PAGE>
Prior to the beginning of each fiscal period, we seek audit committee approval
for all services expected to be rendered by KPMG during the coming year. If
during the course of the year, we require a service to be performed that is not
contemplated in the list of pre-approved services we seek approval from the
Chairman of the audit committee for KPMG to proceed with such service, which
approval requires subsequent ratification at the next meeting of the audit
committee.

ITEM 11 - ADDITIONAL INFORMATION

We shall provide to any person, upon request to the Secretary of the
Corporation:

(a)  when our securities are in the course of a distribution under a preliminary
     short form prospectus or a short form prospectus,

     (i)   one copy of our annual information form, together with one copy of
           any document, or the pertinent pages of any document, incorporated by
           reference in the annual information form,

     (ii)  one copy of our comparative financial statements for our most
           recently completed financial year for which financial statements have
           been filed together with the accompanying report of the auditor and
           one copy of our most recent interim financial statements that have
           been filed, if any, for any period after the end of our most recently
           completed financial year,

     (iii) one copy of our information circular in respect of our most recent
           annual meeting of shareholders that involved the election of
           directors or one copy of any annual filing prepared instead of that
           information circular, as appropriate, and

     (iv)  one copy of any other documents that are incorporated by reference
           into the preliminary short form prospectus or the short form
           prospectus and are not required to be provided under clauses (i),
           (ii) or (iii) above; or

(b)  at any other time, one copy of any documents referred to in clauses (a)(i),
     (ii) and (iii), provided that we may require the payment of a reasonable
     charge if the request is made by a person or company who is not one of our
     security holders.

Additional information, including directors' and officers' remuneration and
indebtedness, principal holders of the Corporation's securities, options to
purchase securities and interests of insiders in material transactions, if
applicable, is contained in our information circular dated April 6, 2004 which
was prepared for the 2004 annual meeting of shareholders. Additional financial
information is provided in the Corporation's comparative financial statements
for the six-month period ended December 31, 2003.

The foregoing documents may be obtained by contacting the office of the
Secretary at the head office of the Corporation, 275 Armand Frappier Boulevard,
Laval, Quebec H7V 4A7.

                                       24<PAGE>

                                                                     Exhibit 4.3

                                (NEUROCHEM LOGO)

                            MANAGEMENT PROXY CIRCULAR

     This proxy circular is furnished in connection with the solicitation by the
management of Neurochem Inc. (the "Corporation") of proxies to be voted at the
annual meeting of shareholders of the Corporation (the "Meeting"), to be held at
the Montreal Museum of Fine Arts, Michal and Renata Hornstein Pavilion, Maxwell
Cummings Auditorium, 1379 Sherbrooke Street West, Montreal, Quebec, H3G 2T9, on
May 19, 2004, at 10:00 AM, Montreal time, for the purposes set forth in the
accompanying notice of the Meeting, and at any adjournment thereof. Except as
otherwise stated, the information contained herein is given as at March 31,
2004, and all dollar amounts and references to $ are to Canadian dollars and US$
refers to United States dollars.

SOLICITATION OF PROXIES

     THE ENCLOSED PROXY IS BEING SOLICITED BY THE MANAGEMENT OF THE CORPORATION
and the expenses of solicitation of proxies will be borne by the Corporation.
The solicitation will be made primarily by mail; however, officers and regular
employees of the Corporation may also solicit proxies by telephone, telecopier
or in person.

APPOINTMENT AND REVOCATION OF PROXIES

     THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY ARE DIRECTORS OR OFFICERS
OF THE CORPORATION. EACH SHAREHOLDER IS ENTITLED TO APPOINT ANY OTHER PERSON TO
REPRESENT HIM AT THE MEETING, AND AT ANY ADJOURNMENT THEREOF.

     A shareholder desiring to appoint another person (who need not be a
shareholder) to represent him at the Meeting, and at any adjournment thereof,
may do so either by striking out the names of the management nominees set forth
in the form of proxy and by inserting such person's name therein or by
completing another proper form of proxy and, in either case, sending the
completed proxy in the enclosed reply envelope for delivery before the Meeting,
or any adjournment thereof, or by depositing such proxy with the Chairman on the
day of the Meeting, at the Meeting or any adjournment thereof.

     A shareholder giving a proxy pursuant to this solicitation may revoke any
such proxy by instrument in writing executed by the shareholder or by his
attorney duly authorized in writing, or if the shareholder is a corporation,
executed under its corporate seal or by an officer or attorney duly authorized
in writing, and deposited with the Corporation, c/o Computershare Trust Company
of Canada, Attention: Proxy Department, 1500 University Street, Suite 700,
Montreal, Quebec, H3A 3S8, at any time up to and including the last business day
preceding the day of the Meeting, or any adjournment thereof, or with the
Chairman on the day of the Meeting, at the Meeting or any adjournment thereof,
before any vote is cast under the proxy's authority.

<PAGE>

                                      -2-

VOTING OF PROXIES

     The persons named in the enclosed form of proxy will vote or withhold from
voting the shares in respect of which they are appointed in accordance with the
directions of the shareholders appointing them.

     IN THE ABSENCE OF SUCH DIRECTIONS, SUCH SHARES WILL BE VOTED:

A.   FOR THE ELECTION AS DIRECTORS OF THOSE PERSONS HEREINAFTER NAMED AS
     MANAGEMENT'S NOMINEES; AND

B.   FOR THE APPOINTMENT OF KPMG LLP, CHARTERED ACCOUNTANTS, AS AUDITORS OF THE
     CORPORATION AND THE AUTHORIZATION OF THE AUDIT COMMITTEE TO FIX THE
     AUDITORS' REMUNERATION.

     All matters to be voted upon at the Meeting will be decided by a majority
of the votes cast by the shareholders entitled to vote thereon.

     The enclosed form of proxy confers discretionary authority upon the persons
named therein with respect to amendments or variations to matters identified in
the accompanying notice of the Meeting or with respect to such other matters as
may properly come before the Meeting, or any adjournment thereof. At the date
hereof, the management of the Corporation knows of no such amendments,
variations or other matters to be presented for action at the Meeting, or any
adjournment thereof. However, if any other matters which are not now known to
management should properly come before the Meeting, or any adjournment thereof,
the persons named in the enclosed form of proxy will vote on such matters in
accordance with their best judgment.

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

     As at March 31, 2004, 29,934,864 common shares of the capital of the
Corporation ("Common Shares") were issued and outstanding, each such share
entitling the holder thereof to one vote.

     Holders of Common Shares listed as shareholders at the close of business on
April 19, 2004, will be entitled to vote at the Meeting, or any adjournment
thereof, either in person or by proxy, in respect of all matters which may
properly come before the Meeting, or any adjournment thereof.

     To the knowledge of the directors and officers of the Corporation, as at
March 31, 2004, no person beneficially owned, directly or indirectly, or
exercised control or direction over, shares of the Corporation carrying more
than 10% of the voting rights attached to all outstanding voting shares of the
Corporation, except as follows:

<TABLE>
<CAPTION>
            NAME                     NUMBER OF COMMON SHARES    PERCENTAGE OF CLASS
----------------------------------   -----------------------    -------------------
<S>                                  <C>                        <C>
P.P. Luxco Holdings II S.A.R.L.(1)          6,718,368                    22.4%
</TABLE>

NOTE:

(1)  P.P. Luxco Holdings II S.A.R.L. is a wholly-owned subsidiary of Picchio
     Pharma Inc. ("Picchio Pharma"). The holdings and purchases of Common Shares
     by Picchio Pharma through P.P. Luxco Holdings II S.A.R.L. are referred to
     in and for the purposes of this management proxy circular as being holdings
     and purchases of Picchio Pharma.

RECENT DEVELOPMENTS

     On September 23, 2003, the Corporation completed the initial public
offering of its Common Shares in the United States and a new issue of Common
Shares in Canada. In connection with this offering, the Common Shares were
approved for quotation on the Nasdaq National Market ("NASDAQ") and trading
commenced on September 18, 2003, under the "NRMX" symbol. The Corporation
offered 5.75 million Common Shares at a price of US$10.87 per share. The
aggregate net proceeds from the offering were approximately US$59 million, net
of underwriting fees and commissions. The Corporation intends to use these
proceeds to fund clinical trials of its lead product candidates, as well as to
further complete pre-clinical and research and development

<PAGE>

                                      -3-

programs. The Corporation also intends to use the proceeds for capital
expenditures and the balance for working capital and general corporate purposes.

ELECTION OF DIRECTORS

     Ten directors are to be elected at the Meeting. The Board recommends that
shareholders vote for the election of the nominees whose names are set forth
below. THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY INTEND TO CAST THE VOTES
TO WHICH THE SHARES REPRESENTED BY SUCH PROXY ARE ENTITLED FOR THE ELECTION OF
THE NOMINEES WHOSE NAMES ARE SET FORTH BELOW UNLESS OTHERWISE DIRECTED BY THE
SHAREHOLDERS APPOINTING THEM.

     Management does not contemplate that any of the nominees will be unable to
serve as a director, but, if that should occur for any reason at or prior to the
Meeting, the persons named in the enclosed form of proxy reserve the right to
vote for another nominee at their discretion, unless instructions have been
received from a particular shareholder to withhold its shares from voting with
respect to the election of directors. Each director elected will hold office
until the next annual meeting of shareholders or until his successor is duly
elected, unless his office is earlier vacated in accordance with the by-laws of
the Corporation. Except as indicated, all of the persons named in the table
below are now members of the Board of Directors of the Corporation (the "Board")
and have been since the years indicated.

     The following table states the names of all the persons proposed by
management to be nominated for election as directors, their principal
occupation, their position in the Corporation (if any), the year in which they
first became directors of the Corporation and the number of Common Shares
beneficially owned, directly or indirectly, by each of them or over which they
exercise control or direction.

<PAGE>
                                      -4-

<TABLE>
<CAPTION>
                                                                                                                    NUMBER OF
                                                                                                                      COMMON
                                                                                                                      SHARES
                                                                                                                   BENEFICIALLY
                                                                                                       YEAR            OWNED,
                                                                                                       FIRST        CONTROLLED
        NAME AND MUNICIPALITY                                                                         BECAME A          OR
           OF RESIDENCE                          PRINCIPAL OCCUPATION                 OFFICE          DIRECTOR      DIRECTED(1)
--------------------------------------   -----------------------------------    -----------------     --------     ------------
<S>                                      <C>                                    <C>                   <C>          <C>
Dr. Francesco Bellini, O.C.(2)........      Chairman and Chief Executive         Chairman of the        2002              --(3)
Montreal, Quebec                             Officer of the Corporation            Board, Chief
                                                                                Executive Officer
                                                                                   and Director

Dr. Colin Bier(4), (5)................                Consultant                     Director           1996             900
Montreal, Quebec

Jean-Guy Desjardins...................       President and Chief Executive           Director             --         387,550
Montreal, Quebec                           Officer, Centria Inc. (a holding
                                                       company)(6)

Peter Kruyt(2), (5), (7)..............     Vice President, Power Corporation         Director           2002          25,200
Montreal, Quebec                                of Canada (a diversified
                                           management and holding company)

Francois Legault......................      President and Chief Operating            Director             --          10,000
Montreal, Quebec                          Officer, ViroChem Pharma Inc. (a
                                            biopharmaceutical company)(8)

Dr. Frederick H. Lowy(7)..............      Rector and Vice-Chancellor of            Director           2003             Nil
Montreal, Quebec                         Concordia University (a university)

John Molloy(4)........................      President and Chief Executive            Director           1994          20,000
Kingston, Ontario                           Officer, Parteq Research and
                                          Development Innovations, Queen's
                                             University (a university
                                          technology transfer organization)

Ronald M. Nordmann(2), (5), (7), (9)..      Co-President, Global Health              Director           2002             Nil
Little Falls, New Jersey                  Associates, LLC (a consulting
                                          company to the healthcare and
                                          financial services industries)

Graeme K. Rutledge(4).................              Consultant                       Director           2003             Nil
Perth, Ontario

Dr. Emil Skamene(7)...................     Scientific Director, Research             Director           2002             Nil
Montreal, Quebec                         Institute of the McGill University
                                         Health Centre (an academic health
                                                      centre)
</TABLE>

NOTES:

(1)  The information as to the Common Shares beneficially owned, controlled or
     directed, not being within the knowledge of the Corporation, has been
     furnished by the respective candidates individually.

(2)  Pursuant to a subscription agreement dated July 25, 2002, by and between
     Picchio Pharma, P.P. Luxco Holdings II S.A.R.L. and the Corporation, the
     Corporation covenanted to cause a total of three nominees of Picchio Pharma
     to be included in the list of management nominees to be proposed for
     election to the Board at each shareholders meeting occurring following the
     date thereof. Picchio Pharma's right shall terminate on the date it ceases
     to beneficially hold at least 15% of the issued and outstanding Common
     Shares (including Common Shares issuable upon exercise of the warrants
     issued to it concurrently). Dr. Bellini and Messrs. Kruyt and Nordmann are
     the current nominees of Picchio Pharma.

(3)  Dr. Bellini holds directly, 166,666 Common Shares. Dr. Bellini is a
     beneficiary of the FMRC Family Trust which holds indirectly, through its
     50% ownership of Picchio Pharma, 6,718,368 Common Shares and warrants to
     subscribe for four million Common Shares.

(4)  Member of the Audit Committee.

(5)  Member of the Compensation Committee.

(6)  Mr. Desjardins is also the President and Chief Executive Officer of Fiera
     Corporation Inc., a holding company. Prior to October 2001, Mr. Desjardins
     was President and Chief Executive Officer of TAL Global Asset Management
     Inc., a holding and management company.

(7)  Member of the Nominating and Corporate Governance Committee.

(8)  Since April 2002, Mr. Legault is also Chairman of the Board of Ecopia
     Biosciences Inc. and since December 2001, Mr. Legault is also been Chairman
     of the Board of Avance Pharma Inc., both of which are biopharmaceutical
     companies. Prior to May 2001, Mr. Legault was Executive Vice-President
     Corporate Development of Biochem Pharma Inc. (now ViroChem Pharma Inc.),
     also a biopharmaceutical company.

(9)  Mr. Nordmann is the Lead Director of the Corporation.

<PAGE>

                                      -5-

COMPENSATION OF DIRECTORS AND EXECUTIVES

     COMPENSATION OF DIRECTORS

     Directors are remunerated for services in that capacity with cash
compensation and options to acquire Common Shares. Members of the Board are paid
an annual fee of $12,000, an attendance fee of $1,000 per meeting and an annual
grant of 5,000 options to acquire Common Shares. Additionally, directors who
serve on committees of the Board are entitled to an annual fee of $2,000 ($3,000
for the chairman of the committee), an attendance fee of $750 per committee
meeting and an annual grant of 1,000 options to acquire Common Shares. Upon
joining the Board, a director is entitled to a one-time option grant of 25,000
options to acquire Common Shares.

     COMPENSATION OF EXECUTIVES

     Summary Compensation Table
     --------------------------

     The following table provides a summary of compensation earned during the
fiscal years ended December 31, 2003, June 30, 2003 and June 30, 2002 by the
current Chief Executive Officer and each of the four other most highly
compensated current senior executives of the Corporation and its affiliates
(collectively, the "Named Executive Officers").

<TABLE>
<CAPTION>
                                                                                               LONG-TERM
                                                                                              COMPENSATION
                                                            ANNUAL COMPENSATION                  AWARDS
                                                 ----------------------------------------     ------------
                                                                                               SECURITIES
                                                                                OTHER             UNDER
                                                                                ANNUAL           OPTIONS
                                                 SALARY          BONUS       COMPENSATION        GRANTED         ALL OTHER
NAME AND PRINCIPAL POSITION       FISCAL YEAR      ($)            ($)             ($)              (#)          COMPENSATION
-------------------------------   -----------    -------        ------       ------------     ------------      ------------
<S>                               <C>            <C>            <C>          <C>              <C>               <C>
Dr. Francesco Bellini, O.C.....      2003*            --(1)         --(1)          --(1)              --(1)         Nil
Chairman, Chief Executive            2003             --(1)         --(1)          --(1)         200,000            Nil
Officer and Director

Dr. Philippe Calais............      2003*       117,000        15,775          6,000                Nil            Nil
President                            2003        112,500(2)        Nil          6,000            200,000            Nil

Claude Michaud.................      2003*       104,000        25,500            Nil                Nil            Nil
Senior Vice-President,               2003        150,000(3)        Nil            Nil            250,000            Nil
Finance and Chief Financial
Officer

Dr. Denis Garceau..............      2003*       130,000        50,000          4,800                Nil            Nil
Vice-President,                      2003        250,000        38,500          9,600                Nil            Nil
Drug Development                     2002        192,500        38,500          9,600             84,500            Nil

Dr. Francine Gervais...........      2003*       117,000        36,900            Nil                Nil            Nil
Vice-President, Research and         2003        225,000        36,900            Nil                Nil            Nil
Development                          2002        184,800        37,000            Nil             84,500            Nil
</TABLE>

NOTES:

*    For 6 months ended December 31, 2003. Effective as of December 31, 2003,
     the fiscal year of the Corporation changed from June 30 to December 31.

(1)  Dr. Bellini was appointed Chief Executive Officer of the Corporation on
     December 11, 2002. Dr. Bellini is compensated for acting as Chief Executive
     Officer of the Corporation through a management services agreement dated
     March 1, 2003, amended as of October 30, 2003, by and between Picchio
     International Inc. ("Picchio International") and the Corporation (see
     "Interest of Insiders in Material Transactions").

(2)  Dr. Calais' employment with the Corporation began on January 6, 2003.

(3)  Mr. Michaud's employment with the Corporation began on October 1, 2002.

     Option Grants during Fiscal Year ended December 31, 2003
     --------------------------------------------------------

     No stock options were granted to the Named Executive Officers during the
fiscal year ended December 31, 2003.

<PAGE>
                                      -6-

     Aggregated Option Exercises During Most Recently Completed Fiscal Year and
     --------------------------------------------------------------------------
     Fiscal Year-End Option Values
     -----------------------------

     The following table indicates, for each of the Named Executive Officers,
the details as to the stock options exercised during the fiscal year ended
December 31, 2003, the total number of unexercised share purchase options held
at December 31, 2003 and the value of such unexercised options at that date.

<TABLE>
<CAPTION>
                                                                                                 VALUE OF
                                                                         OPTIONS               IN-THE-MONEY
                                       COMMON                           HELD AS AT          OPTIONS HELD AS AT
                                       SHARES        AGGREGATE       DECEMBER 31, 2003       DECEMBER 31, 2003
                                    ACQUIRED ON        VALUE           EXERCISABLE/            EXERCISABLE/
                                      EXERCISE        REALIZED        UNEXERCISABLE           UNEXERCISABLE
NAME                                    (#)             ($)                 (#)                   ($)(1)
-------------------------------     -----------      ---------       -----------------     -------------------
<S>                                 <C>              <C>             <C>                   <C>
Dr. Francesco Bellini, O.C ....           Nil             Nil         36,667/163,333         824,641/3,673,359
Dr. Philippe Calais ...........           Nil             Nil         36,667/163,333         824,641/3,673,359
Claude Michaud ................        15,000         120,000         63,125/171,875       1,597,063/4,348,438
Dr. Denis Garceau .............           Nil             Nil         233,250/43,750       6,644,083/1,207,563
Dr. Francine Gervais ..........        20,000         228,800         225,750/43,750       6,417,283/1,207,563
</TABLE>

NOTES:

(1)  The value of unexercised in-the-money options at financial year-end is the
     difference between the exercise price and the closing sale price of the
     Common Shares on the Toronto Stock Exchange (the "TSX") on December 31,
     2003. This gain has not been, and may never be, realized. The options have
     not been, and may never be, exercised and actual gains, if any, on exercise
     will depend on the value of the Common Shares on the date of exercise. The
     closing sale price of the Common Shares on the TSX, on December 31, 2003
     was $30.60.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

     No officers, directors, employees or former officers, directors and
employees of the Corporation were indebted to the Corporation as at March 31,
2004.

DIRECTORS' AND OFFICERS' INSURANCE

     The Corporation provides insurance for the benefit of its directors and
officers against liability incurred by them in these capacities. The current
aggregate policy limit is US$15,000,000, the first US$500,000 of certain claims
being deductible and payable by the Corporation. The annual premium is
US$765,000 for a one year term ending September 16, 2004. This annual premium,
which has not been specifically allocated between directors as a group and
officers as a group, was paid entirely by the Corporation.

TERMINATION OF EMPLOYMENT, CHANGE IN CONTROL AND EMPLOYMENT AGREEMENTS

     In case of termination of their employment for reason other than for just
cause or for good reason, and other than termination following a change of
control of the Corporation, Dr. Philippe Calais, Mr. Claude Michaud, Drs. Denis
Garceau and Francine Gervais are entitled, under their employment agreements, to
lump sum payments of $234,000, $208,000 plus bonus, $260,000, and $234,000,
respectively.

     In case of termination of their employment following a change of control of
the Corporation, Dr. Philippe Calais, Mr. Claude Michaud, Drs. Denis Garceau and
Francine Gervais are entitled, under their employment agreements, to lump sum
payments of $468,000, $416,000 plus bonus, $520,000, and $468,000, respectively.
Following a change of control of the Corporation, if Dr. Philippe Calais, Mr.
Claude Michaud, Drs. Denis Garceau or Francine Gervais elect to remain in their
function for at least six months following such change of control and, prior to
the expiry of two years following such change of control, decide to leave the
employment of the Corporation for any reason whatsoever, they are entitled,
under their employment agreements, to lump sum payments of $234,000, $208,000
plus bonus, $260,000, and $234,000, respectively.

<PAGE>
                                      -7-

COMPOSITION OF THE COMPENSATION COMMITTEE

     The Compensation Committee of the Board currently consists of Dr. Colin
Bier (Chair), Mr. Peter Kruyt and Mr. Ronald M. Nordmann. During the most
recently completed year, Dr. Francesco Bellini, O.C., the Corporation's Chairman
and Chief Executive Officer also served on the Compensation Committee. Dr.
Bellini is compensated for acting as Chief Executive Officer of the Corporation
through a management services agreement dated March 1, 2003, as amended as of
October 30, 2003, by and between Picchio International and the Corporation (see
"Interest of Insiders in Material Transactions").

REPORT ON EXECUTIVE COMPENSATION

     The Corporation's current compensation policy for its executive officers,
including the Named Executive Officers, emphasizes incentive-based compensation
over base salary. Through the granting of options to purchase Common Shares, the
executive officers of the Corporation, including the Named Executive Officers,
are provided with incentive to (a) advance the drug development programs of the
Corporation towards commercialization and (b) enhance the market value of the
Corporation's Common Shares. In order to establish base salary and bonus
compensation levels, the Corporation studies, among other things, the
competitive market environment.

     The members of the Compensation Committee, whose names are set out above,
have approved the issue of the foregoing report and its inclusion in this proxy
circular.

PERFORMANCE GRAPH

     The outstanding Common Shares began trading at the opening of business on
June 22, 2000, on the TSX (NRM).

     The following graph compares, as at the end of each quarter up to December
31, 2003, the cumulative total shareholder return on $100 invested in Common
Shares on June 30, 2000, with the cumulative total shareholder return on the
S&P/TSX Composite Index, assuming reinvestment of all dividends.

<PAGE>

                                      -8-

               (CHART SHOWING CUMULATIVE TOTAL SHAREHOLDER RETURN
              FOR THE PERIOD OF JUNE, 2000 THROUGH DECEMBER, 2003)

REPORT ON CORPORATE GOVERNANCE

     In 1995, the Toronto Stock Exchange Committee on Corporate Governance in
Canada issued its final report, establishing guidelines for corporate governance
for Canadian corporations (the "Guidelines"). The Guidelines relate to a number
of significant governance issues, including the proper role of the board of
directors, its structure and composition and its relationship with shareholders
and management. The TSX has adopted as a listing requirement that disclosure be
made by a listed corporation of its corporate governance practices with
reference to the Guidelines. A complete description of the Corporation's
corporate governance practices, with specific references to each of the
Guidelines is attached hereto as Schedule A. The Nominating and Corporate
Governance Committee, currently composed of Mr. Ronald M. Nordmann (chair), Dr.
Frederick H. Lowy, Mr. Peter Kruyt and Dr. Emil Skamene, has reviewed the
disclosure set out in Schedule A.

     Throughout 2003, the Corporation has reviewed its corporate governance
practices, particularly, in connection with its offering in the United States
and concurrent listing of the Common Shares for quotation on the NASDAQ. While
the Corporation has always been materially in compliance with the Guidelines, in
light of the quotation of its Common Shares on NASDAQ and changes in the
regulatory framework in the United States, most notably with the implementation
of the Sarbanes-Oxley Act, the Board concluded that it is was in the best
interests of the Corporation and its shareholders to implement certain changes
to its corporate governance practices. In addition to the Audit Committee and
the Compensation Committee, the Corporation created a Nominating and Corporate
Governance Committee, and a Disclosure Committee (which committee is comprised
solely of executive officers of the Corporation). Moreover, the Corporation
adopted a formal mandate of the Board of Directors, a charter for each of its
committees, a Disclosure and Trading Policy, a Code of Ethics and a Hiring
Policy for its independent auditors (to avoid any impairment of the independence
of the Corporation's independent auditors).

     The Board continues to review corporate governance proposals made by the
Toronto Stock Exchange, the Canadian Securities Administrators and NASDAQ. As
new standards come into force, the Board will review

<PAGE>
                                      -9-

and amend, where necessary and appropriate, its corporate governance practices
and the eligibility of the members of the Board on each committee and shall, if
necessary, make appropriate changes.

     The following is a description of the current committees of the Board:

     COMMITTEES OF THE BOARD

     Audit Committee
     ---------------

     The mandate of the Audit Committee includes assisting the Board in its
oversight of (i) the integrity of the Corporation's financial statements,
financial reporting process, system of internal controls over financial
reporting, and audit process, (ii) the Corporation's compliance with, and
process for monitoring compliance with, legal and regulatory requirements, (iii)
the independent auditors' qualifications and independence, and (iv) the
performance of the independent auditors. The current members of the Audit
Committee are Mr. Graeme K. Rutledge (chair), Dr. Colin Bier and Mr. John
Molloy.

     Under the listing requirements of NASDAQ, no director who is not
independent, may be appointed to the audit committee of a company. Mr. Molloy is
not independent under these listing requirements, as he is the President and
Chief Executive Officer of Parteq Research and Development Innovations, Queen's
University ("Parteq"). However, in accordance with the NASDAQ listing
requirements, the Board has resolved that the continued membership of Mr. Molloy
on the Audit Committee is required in the best interests of the Corporation and
its shareholders because of his knowledge of the Corporation and experience in
such matters.

     Compensation Committee
     ----------------------

     The mandate of the Compensation Committee includes reviewing the
compensation arrangements for the Corporation's employees, including executive
officers and directors, and making recommendations to the Board with respect to
such compensation arrangements, as well making recommendations to the Board with
respect to the Corporation's incentive compensation plans and equity-based plans
and to oversee succession planning. The Compensation Committee is also
responsible for preparing an annual report on executive compensation for
purposes of disclosure to shareholders. The current members of the Compensation
Committee are Dr. Colin Bier (chair), Mr. Peter Kruyt and Mr. Ronald M.
Nordmann.

     Nominating and Corporate Governance Committee
     ---------------------------------------------

     The mandate of the Nominating and Corporate Governance Committee is to
develop and recommend to the Board a set of corporate governance principles and
to prepare and review the disclosure with respect to, and the operation of, the
Corporation's system of corporate governance, before such disclosure is
submitted to the Board for its approval. The Nominating and Corporate Governance
Committee is responsible for the review and periodic update of the Corporation's
Code of Ethics which governs the conduct of the Corporation's directors,
officers and other employees. Moreover, the Nominating and Corporate Governance
Committee is mandated to examine, on an annual basis, the size and composition
of the Board and, if appropriate, recommend to the Board a program to establish
a Board comprised of members who facilitate effective decision-making. Finally,
the Nominating and Corporate Governance Committee shall identify individuals
qualified to become members of the Board, recommend to the Board nominees to be
put before shareholders at each annual meeting and recommend to the Board a
process for board, committee and director assessment. The current members of the
Nominating and Corporate Governance Committee are Mr. Ronald M. Nordmann
(chair), Dr. Frederick H. Lowy, Mr. Peter Kruyt and Dr. Emil Skamene.

     COMMUNICATIONS, INSIDER TRADING, CONFIDENTIAL INFORMATION AND DISCLOSURE
     POLICIES

     The Board is committed to an effective communications policy with all
stakeholders including shareholders, suppliers, advertisers, employees, agents
and members of the investment community. The Corporation is committed to
complying with all laws, regulations and policies which are applicable to it as
well as to best practices in the field. This commitment is evidenced, notably,
by the adoption in 2003 of a Disclosure and Trading Policy.

<PAGE>

                                      -10-

     The Board or the Audit Committee reviews in advance all press releases
which disclose financial results or other non-routine matters. Other statutory
documents or documents required to be prepared, filed and delivered including,
without limitation, the annual report, proxy materials and annual information
form are reviewed by members of the Board and, where required, these documents
are approved by the Board.

INTEREST OF INSIDERS IN MATERIAL TRANSACTIONS

     On March 1, 2003, the Corporation entered into a management services
agreement with Picchio International into which Picchio Pharma intervened
(Picchio Pharma and Picchio International are sometimes referred to collectively
in this management proxy circular as the "Picchio Group"). All of the shares of
Picchio International are owned by Dr. Francesco Bellini, O.C., and his spouse.

     The management services agreement provides that Picchio International shall
provide the services of Dr. Bellini as Chairman and Chief Executive Officer of
the Corporation and provide the services of other members of the Picchio Group,
including all senior managers of Picchio Pharma. Under the agreement, the
Picchio Group is currently providing, and will continue to provide, on-going
regular consulting and advisory services, including services related to
reviewing existing and potential research and development activities, and
existing potential clinical programs, financing activities, partnering and
licensing opportunities, commercialization plans and programs, and advising and
assisting in investor relations activities.

     In consideration of all services rendered under the agreement, Picchio
International receives a monthly fee of $80,000. This amount includes all direct
and indirect costs and expenses, including travel and all other out-of-pocket
expenses, incurred by Dr. Bellini and the Picchio Group relating to the services
provided pursuant to such agreement. The agreement was amended as of October 30,
2003, to provide for the payment, from time to time, to Picchio International of
a discretionary amount as a performance based fee for services rendered. The
amount of such performance based fee, if any, will be determined by the Board at
its sole discretion. The term of the agreement is two years and each party has
the right to terminate such agreement at any time upon sending a written prior
notice of 180 days. The agreement provides that it shall be automatically
renewed for successive one year terms unless either party sends a prior written
notice of non-renewal to the other party at least 90 days prior to the then
current termination date.

     The management services agreement provides that the Picchio Group shall
not, without the Corporation's written consent, during the term of such
agreement and for the 24 months following the termination of the agreement,
carry on or be engaged in any business which is the same or similar to or in
competition in any material way with any of the businesses which the Corporation
now or which the Corporation shall, during the term of the agreement, carry on
anywhere in the world. The Picchio Group also agreed not to hire any of the
Corporation's employees during the term of the agreement and for the twelve
months following its expiration.

AUDITORS OF THE CORPORATION

     KPMG LLP, Chartered Accountants, have been the auditors of the Corporation
since September 1995. The Board recommends that shareholders vote for the
appointment of KPMG LLP, Chartered Accountants, as auditors of the Corporation
and the authorization of the Audit Committee to fix the auditors' remuneration.
THE PERSONS NAMED IN THE ENCLOSED FORM OF PROXY INTEND TO CAST THE VOTES TO
WHICH THE SHARES REPRESENTED BY SUCH PROXY ARE ENTITLED FOR THE REAPPOINTMENT OF
KPMG LLP, CHARTERED ACCOUNTANTS, AS AUDITORS OF THE CORPORATION FOR THE TERM
EXPIRING WITH THE NEXT ANNUAL MEETING OF SHAREHOLDERS, AND TO AUTHORIZE THE
AUDIT COMMITTEE TO FIX THEIR REMUNERATION, UNLESS OTHERWISE DIRECTED BY THE
SHAREHOLDERS APPOINTING THEM.

2004 SHAREHOLDER PROPOSALS

     Shareholder proposals must be submitted no later than January 6, 2005 to be
considered for inclusion in the Management Proxy Circular for the purposes of
the Corporation's 2005 annual meeting of shareholders.

<PAGE>
                                      -11-

APPROVAL BY DIRECTORS

     The contents of this proxy circular and the sending thereof have been
approved by resolution of the Board.

     DATED at Montreal, Quebec, April 6, 2004.

                                                     /s/ DAVID SKINNER
                                                     David Skinner
                                                     Corporate Secretary

<PAGE>
                                   SCHEDULE A

                         CORPORATE GOVERNANCE PRACTICES

<TABLE>
<CAPTION>
                TSX GUIDELINE                                             CORPORATION'S PRACTICE
<S>                                              <C>
1.   The Board should explicitly assume          The Board has explicitly assumed responsibility for the stewardship of
responsibility for stewardship of the            the Corporation in a formal Mandate of the Board of Directors, which
corporation, and specifically:                   was adopted on August 18, 2003. Specifically, the Board has assumed
    (i)   adopt a strategic planning process,    responsibility for (i) the adoption of a strategic planning process,
    (ii)  identify principal risks of the        (ii) the identification of the principal risks for the Corporation and
          business and implement systems of      the implementation of appropriate risk management systems, (iii)
          risk management,                       succession planning, including appointing, training and monitoring senior
    (iii) provide for succession planning,       management; (iv) ensuring that the Corporation has in place a communications
          including appointing, training and     policy to enable the Corporation to communicate effectively with
          monitoring senior management,          shareholders, other stakeholders and the public generally by, notably,
    (iv)  a communications policy,               enacting a Disclosure and Trading Policy and (v) the integrity of
    (v)   assume responsibility for the          internal controls and management information systems.
          integrity of the Company's internal
          control and management information
          systems.

2.  The Board should be constituted with         The Board currently consists of a majority of unrelated directors as,
a majority of individuals who qualify as         of the nine directors currently serving on the Board, seven are
unrelated directors.                             considered unrelated, namely Dr. Colin Bier, Mr. Richard Cherney, Mr.
                                                 Peter Kruyt, Dr. Frederick H. Lowy, Mr. Ronald M. Nordmann, Mr. Graeme
                                                 K. Rutledge and Dr. Emil Skamene. The additional nominees, namely
                                                 Messrs. Jean-Guy Desjardins and Francois Legault, are also unrelated.
                                                 Dr. Francesco Bellini, O.C. and Mr. John Molloy are related directors.
                                                 Mr. Richard Cherney is not standing for re-election as director of the
                                                 Corporation.

                                                 The Corporation does not have a majority shareholder and therefore no
                                                 shareholder can exercise a majority of voting rights for the election of
                                                 directors, but pursuant to a subscription agreement dated July 25, 2002,
                                                 by and between Picchio Pharma, P.P. Luxco Holdings II S.A.R.L. and the
                                                 Corporation, the Corporation covenanted to cause a total of three nominees
                                                 of Picchio Pharma to be included in the list of management nominees to be
                                                 proposed for election to the Board at each meeting of shareholders occurring
                                                 following the date thereof. Picchio Pharma's right shall terminate on the
                                                 date it ceases to beneficially hold at least 15% of the issued and
                                                 outstanding Common Shares (including Common Shares issuable upon exercise of
                                                 the warrants issued to them concurrently). Dr. Bellini and Messrs. Kruyt and
                                                 Nordmann are the current nominees of Picchio Pharma.
</TABLE>

<PAGE>
                                      -2-

<TABLE>
<CAPTION>
                TSX GUIDELINE                                             CORPORATION'S PRACTICE
<S>                                              <C>
3.  The Board should disclose, for each          Dr. Francesco Bellini, O.C., Chairman and Chief Executive Officer ("CEO")
director, whether he or she is related and how   of the Corporation, is a related director as he is a member of the
that conclusion was reached.                     management of the Corporation. Mr. John Molloy is also a related
                                                 director, as he is President and Chief Executive Officer of Parteq, an
                                                 organization with whom the Corporation has entered into research alliances,
                                                 licensing agreements and service agreements.

                                                 Dr. Colin Bier, Mr. Richard Cherney, Mr. Peter Kruyt, Dr. Frederick H.
                                                 Lowy, Mr. Ronald M. Nordmann, Mr. Graeme K. Rutledge, Dr. Emil Skamene
                                                 and the additional nominees, namely Messrs. Jean-Guy Desjardins and
                                                 Francois Legault, are unrelated in that they are (i) independent of
                                                 management; and (ii) free from any interest and any business or other
                                                 relationship which could, or could reasonably be perceived to,
                                                 materially interfere with the director's ability to act with a view to
                                                 the best interests of the Corporation, other than interests and
                                                 relationships arising from shareholding.

                                                 Mr. Richard Cherney is a partner of Davies Ward Phillips & Vineberg LLP
                                                 which provides legal services to the Corporation and Picchio Pharma.
                                                 The Board considers that this professional relationship does not
                                                 materially interfere with Mr. Cherney's ability to act with a view to the
                                                 best interests of the Corporation.

4.  Appoint a committee of directors             The Corporation has created a Nominating and Corporate Governance
composed exclusively of outside, i.e.            Committee, responsible for the appointment and assessment of directors.
non-management directors, a majority of whom     All the members of this committee are unrelated and outside directors.
are unrelated directors, responsible for the
appointment and assessment of directors.

5.  Implement a process for assessing the        The Nominating and Corporate Governance Committee has the mandate,
effectiveness of the Board, its committees and   explicitly documented in its Charter, to implement a process for
individual directors.                            assessing the effectiveness of the Board, its committees and individual
                                                 directors.

6.  Provide an orientation and education         The Nominating and Corporate Governance Committee has the mandate,
program for new directors.                       explicitly documented in its Charter, to consider the appropriateness
                                                 of implementing formal programs for the orientation and education of
                                                 new directors.

7.  Examine the size of the Board, with          The Board presently consists of nine directors with a variety of
specific reference to its effectiveness.         backgrounds. Its size and composition are subject to periodic review of
                                                 the Nominating and Corporate Governance Committee, and the Board is of
                                                 the opinion that it will be most effective as it will be composed after
                                                 the Meeting.

8.  Review compensation of directors in light    The Compensation Committee has the mandate, explicitly documented in
of risks and responsibilities.                   its Charter, to review compensation of directors in light of risks and
                                                 responsibilities.

9.  Committees should generally be composed      The Board has three committees: the Audit Committee, the Compensation
of only outside directors, a majority of whom    Committee, and the Nominating and Corporate Governance Committee. All
are unrelated directors.                         members of the Audit Committee, the Compensation Committee and the
                                                 Nominating and Corporate Governance Committee are outside directors. All
                                                 committees are composed of a majority of unrelated directors.

                                                 The current Composition of each the committees is set out below.

                                                 AUDIT COMMITTEE
                                                 Graeme K. Rutledge                            Unrelated    Outside
                                                 Dr. Colin Bier                                Unrelated    Outside
                                                 John Molloy                                   Related      Outside
</TABLE>

<PAGE>

                                      -3-

<TABLE>
<CAPTION>
                TSX GUIDELINE                                             CORPORATION'S PRACTICE
<S>                                              <C>
                                                 COMPENSATION COMMITTEE
                                                 Dr. Colin Bier                                Unrelated    Outside
                                                 Peter Kruyt                                   Unrelated    Outside
                                                 Ronald M. Nordmann                            Unrelated    Outside
                                                 NOMINATING AND CORPORATE GOVERNANCE
                                                 COMMITTEE
                                                 Ronald M. Nordmann                            Unrelated    Outside
                                                 Dr. Frederick H. Lowy                         Unrelated    Outside
                                                 Peter Kruyt                                   Unrelated    Outside
                                                 Dr. Emil Skamene                              Unrelated    Outside

10. Assume or assign responsibility for          The Nominating and Corporate Governance Committee has the mandate,
corporate governance issues.                     explicitly documented in its Charter, to assume responsibility for
                                                 corporate governance issues.

11. Define management's responsibilities and     The Board has the responsibility, explicitly documented in the Mandate
approve corporate objectives to be met by the    of the Board of Directors, to approve a formal position description for
CEO.                                             the CEO. Moreover, the Nominating and Corporate Governance Committee of
                                                 the Board has the mandate, explicitly documented in its Charter, to
                                                 submit to the Board an assessment of the CEO against the corporate
                                                 objectives, which are approved by the Board and which the CEO is
                                                 responsible for meeting.

                                                 On March 1, 2003, the Corporation entered into a management services
                                                 agreement with Picchio International into which Picchio Pharma intervened
                                                 (Picchio Pharma and Picchio International are sometimes referred to
                                                 collectively in this management proxy circular as the "Picchio Group").
                                                 All of the shares of Picchio International are owned by Dr. Bellini and
                                                 his spouse. The management services agreement provides that Picchio
                                                 International shall provide the services of Dr. Francesco Bellini, O.C.,
                                                 as Chairman and CEO of the Corporation and provide the services of other
                                                 members of the Picchio Group, including all senior managers of Picchio
                                                 Pharma. Under the agreement, the Picchio Group is currently providing,
                                                 and will continue to provide, on-going regular consulting and advisory
                                                 services, including services related to reviewing existing and potential
                                                 research and development activities, and existing potential clinical
                                                 programs, financing activities, partnering and licensing opportunities,
                                                 commercialization plans and programs, and advising and assisting in
                                                 investor relations activities.

12. Establish structures and procedures          The Board endeavors to ensure that it can function independently of
to enable the Board to function independently    management. One measure taken to this end is the appointment of Mr.
of management. An appropriate structure would    Ronald M. Nordmann as Lead Director of the Corporation by the outside
be to appoint a chairman who is not a member     directors of the Corporation on December 9, 2003. However, given its
of management.                                   current state of development and the controls in place, the Board is of
                                                 the opinion that it is in the best interests of the Corporation and its
                                                 shareholders to have Dr. Francesco Bellini, O.C., act both as Chairman
                                                 and CEO of the Corporation.

13. The audit committee should be composed of    The Audit Committee is exclusively composed of outside directors. Its
outside directors and its role specifically      role is specifically defined in its Charter.
defined.

14. Implement a system to enable individual      Individual directors are able to engage outside advisers at the expense
directors to engage outside advisors, at the     of the Corporation, with the engagement of the adviser being subject to
Company's expense.                               the approval of the Nominating and Corporate Governance Committee, as
                                                 specifically documented in the mandate of the Board.
</TABLE>

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00078-of-00352.parquet"}]]