According to the American Cancer Society, prostate cancer is the second leading cause of cancer death in men with approximately 232,100 new cases and 30,400 deaths in the United States in 2005. The mortality from this disease is expected to rise significantly in the United States with the aging of the “baby boomer” generation. The Prostate Cancer Foundation forecasts that without new interventions the number of deaths from prostate cancer in the United States will grow to approximately 68,000 annually by 2025.

Breast cancer is the most frequently diagnosed cancer in women in the United States and is a major public health problem. In 2005 in the United States alone, an estimated 211,200 women were newly diagnosed with this disease and approximately 40,400 women died from the disease.

Nearly 1.2 million patients are diagnosed with malignant tumors each year in the United States. The large majority of solid tumors have hypoxic areas, which are relatively resistant to standard anti-cancer treatment, including radiation therapy and chemotherapy. A non-toxic, tissue-specific agent that treats the hypoxic areas of tumors and effectively combines with other agents to enhance their anti-cancer activities should increase the overall efficiency of cancer cell killing, reduce tumor recurrence and improve the prognosis for a significant number of patients with cancer.

GBM is one of the most aggressive and rapidly progressing tumors, with the median survival for newly diagnosed cases of 42 to 50 weeks. According to the American Cancer Society, there were approximately 18,500 new cases and 12,800 deaths from brain and other nervous system tumors in the United States in 2005. Brain tumors account for 85% to 90% of all primary central nervous system tumors and GBM is the most commonly diagnosed brain tumor.

The Company is developing DN-101 as a novel, oral anti-cancer agent with applicability to multiple tumor types and for use in combination with a number of chemotherapeutic agents. The Company is targeting AIPC as its initial indication for DN-101. The Company is currently conducting a 900-patient Phase 3 clinical trial, referred to as ASCENT-2, for the treatment of patients with AIPC that seeks to confirm the survival and safety results observed in its ASCENT Phase 2/3 clinical trial.

The Company is developing vinorelbine oral as an oral formulation of vinorelbine intravenous, or vinorelbine I.V., for the treatment of breast or lung cancer. Vinorelbine I.V. is a chemotherapeutic agent that has been administered to over 1,000,000 patients since its first approval in France in 1989. The Company views vinorelbine oral as a more convenient version of an established chemotherapeutic agent with a relatively benign safety profile. The Company believes that vinorelbine oral has the opportunity to be approved in the United States in the same indications for which the intravenous formulation is currently approved, as well as new cancer indications. Based on the significant clinical and marketing experience and data generated to date in the United States and in Europe, the Company intends to advance vinorelbine oral into a registration trial in the United States in 2006. The Company licensed U.S. and Canadian development and commercialization rights to vinorelbine oral from Pierre Fabre Medicament, S.A., or Pierre Fabre, in July 2005.

The Company is developing AQ4N as a tissue-targeted cytotoxic prodrug for the treatment of solid tumors. The Company is studying AQ4N as a monotherapy and in combination with other chemotherapy agents and/or radiation. As a prodrug, AQ4N is inert until activated to become AQ4, a potent, well-characterized, topoisomerase II inhibitor. The activation is designed to occur in cells and tissue that are oxygen starved, or hypoxic, and in lymphoid tissues. Hypoxic conditions are most frequently found in cancerous tumors. The Company currently anticipates starting a Phase 1/2 clinical trial this year that will evaluate AQ4N in the treatment of glioblastoma multiforme, or GBM in combination with radiation and chemotherapy. In addition, the Company plans to initiate an additional investigator-sponsored Phase 1 or Phase 2 clinical trial in additional tumor types, including B-cell malignancies. The Company acquired North American rights to develop and commercialize AQ4N from KuDOS in December 2003.

Research and development expenses for the nine months ended September 30, 2005 were $12.7 million compared to $11.4 million for the nine months ended September 30, 2004, an increase of $1.3 million.

General and administrative expenses for the nine months ended September 30, 2005 were $4.8 million compared to $4.3 million for the nine months ended September 30, 2004.

Interest and other income, net for the nine months ended September 30, 2005 was $0.8 million compared to $0.6 million for the nine months ended September 30, 2004.