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November 4, 2004

NUCRYST Pharmaceuticals announces third quarter results

Wakefield, MA, USA -- -

For immediate release

NUCRYST Pharmaceuticals announces third quarter results
NUCRYST earns US$5-million milestone payment

Wakefield, Massachusetts – November 4, 2004 – NUCRYST Pharmaceuticals, a subsidiary of The Westaim Corporation, today announced third quarter total revenue of US$8.3 million, compared to US$2.2 million posted in the same period last year.

In the first nine months of 2004, NUCRYST Pharmaceuticals reported revenues of US$19.7 million compared to US$8.8 million in the same period of 2003.

During the quarter, NUCRYST Pharmaceuticals earned a US$5-million milestone from its wound care partner Smith & Nephew plc. Payment for the milestone was received in October. NUCRYST and Smith & Nephew have an agreement for the global sales and distribution of Acticoat™ dressings for serious wounds, including burns and chronic wounds. This milestone payment was achieved ahead of schedule and represents the second US$5-million milestone achieved by NUCRYST in 2004. NUCRYST has now earned US$14 million of a potential US$56.5 million in milestone payments as a result of strong customer acceptance of Acticoat™ dressings.

In partnership with Smith & Nephew, the world’s leader in advanced wound management, NUCRYST develops and manufactures Acticoat™ dressings using its proprietary SILCRYST™ nanocrystals. Acticoat™ dressings are sold in 30 countries, and sales have grown by more than 50 percent year over year since introduction in 1998.

NUCRYST has begun a $7-million (Canadian dollars – CDN) expansion of the SILCRYST Division’s facility in Fort Saskatchewan, Canada to meet rapidly growing demand for its Acticoat™ family of dressings. The expansion will include new production equipment and facility expansion. NUCRYST anticipates the facility expansion to be completed by the end of 2005.

In September 2004, NUCRYST 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. 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.

The Westaim Corporation announced today that for the third quarter ended September 30, 2004, it recorded a net loss of $2.5 million (CDN), or 3 cents per share on revenue of $10.5 million (CDN). In the same quarter last year, the company recorded a net loss of $8 million (CDN), or 10 cents per share, on revenues of $10.5 million (CDN). As a Canadian company, Westaim reports in Canadian dollars.

Westaim’s results for the first nine months of 2004 included income from discontinued operations of $3.8 million (CDN) compared to income from discontinued operations of $3.4 million (CDN) in the same period of 2003. The net income from discontinued operations in 2004 included a $5.4 million (CDN) gain on the sale of Westaim's Ambeon operating division. Ambeon was sold on January 29, 2004 for net proceeds of $33.4 million (CDN).

In the third quarter, Westaim closed a $50-million (CDN) equity financing from an offering of 14,705,883 common shares. At September 30, 2004, Westaim had $117.5 million (CDN) in cash and short-term investments, and no debt.

NUCRYST Pharmaceuticals Corp. ( researches and develops healthcare products based on noble metal nanocrystalline technology. Potential products are in development for dermatology and severe respiratory conditions. The company has an established, profitable medical coatings business called SILCRYST. SILCRYST’s first products are Acticoat™ antimicrobial dressings for burns and serious wounds. These products are marketed, sold and distributed by Smith & Nephew, the world’s leader in advanced wound care management.

In addition to NUCRYST, 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.

For more information contact:
David Wills
Investor Relations
The Westaim Corporation
(416) 504-8464

All figures are in US dollars unless otherwise stated
SILCRYST™ is a trademark of NUCRYST Pharmaceuticals Corp.
Acticoat™ is 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 but not limited to financial considerations and those predicting the development or upgrading of facilities and equipment, product development, profitability, and production and capital costs. The Company disclaims any intention or obligation 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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