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November 4, 2003

NUCRYST Pharmaceuticals announces third quarter results

Wakefield, MA, USA -- -  

For immediate release

Wakefield, Massachusetts – November 4, 2003 – NUCRYST Pharmaceuticals, a subsidiary of The Westaim Corporation, today announced third quarter total revenue of $2.2 million, an increase of 83 percent over the $1.2 million posted in the same period last year. Total revenue results reflect a record performance in the current quarter for product-based revenue of $2.0 million, an increase of 67 percent over the same quarter in 2002.

Year to date, total revenue for NUCRYST is $8.8 million, compared to $3.7 million during the first nine months of 2002. The results for the first nine months include a $3.0 million milestone payment in the first quarter from NUCRYST’s wound care partner Smith & Nephew for achievement of additional regulatory approvals in Europe.

“NUCRYST continues to make substantial progress both the wound care business and the pursuit of new pharmaceutical drugs based on our proprietary nanocrystalline silver technology,” said Scott H. Gillis, President of NUCRYST. “We are continuing to generate favorable data from our dermatological formulation and expect to begin clinical efficacy trials within the next several months.”

NUCRYST is conducting clinical trials of a novel dermatology cream containing its proprietary formulation of silver Rx nanocrystals. NUCRYST is developing this new drug (NPI 32101) for the treatment of atopic dermatitis, or eczema, and other skin conditions. The company believes that its nanocrystalline silver with dual anti-inflammatory and antimicrobial properties will address both the inflammation associated with atopic dermatitis and the secondary infections that often accompany the disease.

The market in the United States alone for topical anti-inflammatory products was more than $800 million in 2002. NUCRYST believes that, unlike other traditional treatments, its product will not be burdened with steroidal side effects, which the company expects will represent a major advantage for dermatologists and their patients.

Since successfully completing its first Phase 1 safety trial in normal volunteers earlier this year, NUCRYST has completed the safety and pre-clinical work required to begin its first Phase 2 human efficacy study for atopic dermatitis. The company is in the process of engaging clinical investigators and expects to begin the trial early in 2004.

NUCRYST will also increase investment in research and development for additional therapeutic products using its silver nanocrystals. The favorable progress achieved in dermatology and encouraging preliminary research results with a solution for inhalation has led to a decision to pursue new indications to address respiratory tract diseases where inflammation and/or infection is a common problem.

In partnership with Smith & Nephew, the world’s leading wound care company, NUCRYST develops and manufactures Acticoat™ dressings using its proprietary SILCRYST™
nanocrystalline coating. Building on North American success, Smith & Nephew’s global rollout is progressing with Acticoat™ dressings now sold in 26 countries. Acticoat™ is used extensively for serious wounds including burns and chronic wounds.

Sales of Acticoat™ dressings to end users continue to grow by approximately 50 percent year over year. Smith & Nephew expects continued sales growth in the near future as it continues to devote significant marketing and selling effort to the Acticoat™ product line in 26 countries. While the product has always been eligible for reimbursement in the hospital, in the third quarter, Acticoat™ dressings also became eligible for government reimbursement in the United Kingdom when used to treat wounds in the community. This expanded reimbursement has favorably affected sales of Acticoat™ dressings in the United Kingdom.

Also today, The Westaim Corporation announced its results for the third quarter ended September, 2003. As a Canadian company, Westaim reports in Canadian dollars (CDN). For the quarter, it recorded a net loss of CDN$7.8 million, or 10 cents per share on revenue of CDN$10.5 million. In the same quarter last year, the company recorded a net loss of CDN$40.3 million, or 52 cents per share, on revenue of CDN$35.4 million. At September 30, 2003, Westaim had CDN$76.9 million in cash and short-term investments, and no debt.

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

The Westaim Corporation’s technology investments include: NUCRYST Pharmaceuticals, which researches, develops and commercializes pharmaceutical and wound care products based on its nanocrystalline silver technology; and iFire Technology, which has developed a revolutionary low-cost and high-definition flat panel television display. Westaim's common shares are listed on NASDAQ under the symbol WEDX and on The Toronto Stock Exchange under the trading symbol WED.

For more information contact:
David Wills
Investor Relations
The Westaim Corporation
(416) 504-8464
info@westaim.com
www.westaim.com

All figures are in US dollars unless otherwise stated
SILCRYST™ is a trademark of NUCRYST Pharmaceuticals Corp.
Acticoat™ is trademark of Smith & Nephew plc

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