WAKEFIELD, MA, Sept. 7 /CNW/ - NUCRYST Pharmaceuticals Corp., a
subsidiary of The Westaim Corporation, today announced results from its
initial Phase 2a efficacy and safety study of NPI 32101 in a cream formulation
in adult patients with mild to moderate atopic dermatitis. NPI 32101 is a
topical form of NUCRYST's proprietary silver Rx nanocrystals.

This double-blind, randomized, placebo-controlled study in 224 adult
patients with mild to moderate symptoms of atopic dermatitis, involved 23
clinical sites across the United States. Patients were treated twice daily for
a six-week period with one of two concentrations of NPI 32101, 0.5% and 1.0%,
in a cream formulation or with the vehicle alone. The purpose of the study was
to evaluate the safety and effectiveness of topical NPI 32101 in improving the
signs and symptoms of atopic dermatitis.

Efficacy in this study was assessed using three commonly-used statistical
methods. Using the intent-to-treat analysis (including all randomized patients
who had at least one post-treatment efficacy assessment) with last observation
carried forward method, statistical significance was not met in investigator
overall assessment of disease improvement. However, statistical significance
was achieved with 1.0% NPI 32101 compared to vehicle using intent-to-treat
patients who completed six weeks of treatment method (i.e. without last
observation carried forward data imputation method). In addition, in patients
who completed the study in accordance with the protocol (the per protocol
completers method), statistical significance was achieved with 1.0% NPI 32101.
NPI 32101 was well tolerated and there were no serious adverse events. Any
adverse events reported were not unusual for a topical drug and did not occur
with a greater statistical frequency than was observed in the vehicle group.
For example, application site reactions occurred in 11.4%, 10.3% and 15.7% in
the vehicle, 0.5% and 1.0% creams, respectively. Additional studies will
continue to be conducted to more fully understand the safety profile of
NPI 32101.

"Based on the findings in this exploratory Phase 2a study, it is
Westaim's intention to continue with further human clinical trials," said
Barry M. Heck, President & CEO of Westaim. "This study provided compelling
evidence to support the premise that NUCRYST's Rx nanocrystals have commercial potential in pharmaceutical applications."

Atopic dermatitis is a chronic inflammatory disease of the skin, which
affects five to seven per cent of the general population. The cause of atopic
dermatitis is unknown and the inflammation often is associated with secondary
skin infection. Preclinical laboratory studies have demonstrated that
NPI 32101 possesses both anti-inflammatory and broad spectrum antimicrobial
activities. This combination of pharmacological properties may have additional
therapeutic uses beyond dermatology.

"This clinical trial demonstrated that our topical silver Rx nanocrystals
can be beneficial in the treatment of dermatological diseases and we are eager
to continue its development based on these results," said Scott H. Gillis,
President of NUCRYST. "NPI 32101 represents the first pharmaceutical
application of our nanotechnology. We believe our silver Rx nanocrystals hold
great promise in treating many conditions where inflammation and infection are
present."

"These results indicate that additional clinical trials of NUCRYST's
silver Rx nanocrystals are warranted," said Michael Weintraub, MD, former
Director, Office of Drug Evaluation, FDA, Rockville, MD and currently Senior
Scientist at the Lash Group and member, NUCRYST's Scientific Advisory Board.
"Findings in this study provide NUCRYST with important guidance to optimize
the product, protocol and study design for future clinical trials."
Using information obtained from these results, NUCRYST plans to design
and conduct additional Phase 2 clinical studies in order to prepare for the
larger Phase 3 clinical trials of NPI 32101. NPI 32101 is still
investigational and has not been approved by any regulatory agencies for
marketing.

NUCRYST Pharmaceuticals Corp. (www.nucryst.com) researches and develops
medical device and pharmaceutical products based on noble metal
nanocrystalline technology. Potential products are in development for
dermatology and severe respiratory conditions. The company also has profitably
commercialized its technology for wound care with Acticoat(TM) antimicrobial
dressings for serious wounds including life-threatening burns, using NUCRYST's
proprietary SILCRYST(TM) nanocrystalline technology. These products are
marketed, sold and distributed by Smith & Nephew, the world's leading advanced
wound care company.

In addition to NUCRYST Pharmaceuticals, The Westaim Corporation's
technology investments include iFire Technology, which has developed a
revolutionary low-cost flat panel display. Westaim's common shares are listed
on NASDAQ under the symbol WEDX and on The Toronto Stock Exchange under the trading symbol WED.

SILCRYST(TM) is a trademark of NUCRYST Pharmaceuticals Corp.
Acticoat(TM) is a trademark of Smith & Nephew plc

This news release may contain forward-looking statements. These
statements are based on current expectations that are subject to risks and
uncertainties, and the Company can give no assurance that these expectations
are correct. Various factors could cause actual results to differ materially
from those projected in such statements, including financial considerations,
the outcome of further clinical trials and those predicting the applicability
of Nucryst's Rx nanocrystals for the treatment of other conditions. The
Company disclaims any intention or obligations to revise forward-looking
statements whether as a result of new information, future developments or
otherwise. All forward-looking statements are expressly qualified in their
entirety by this Cautionary Statement.

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For further information: David Wills, Investor Relations, The Westaim
Corporation, (416) 504-8464, info@westaim.com, www.westaim.com;
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http://www.newswire.ca and click on reports@cnw.