In 2004, U.S. hormone replacement therapies sales for menopausal conditions were approximately $1.7 billion. This represents a 30% decline from the level of sales prior to publication of the findings of the clinical studies from the Women’s Health Initiative. Sales of hormone replacement products containing estrogen alone dropped from $1.5 billion in 2002 to $1.1 billion in 2004 in the United States, although still accounting for approximately 75% of total 2004 oral hormone replacement prescriptions. Estrogen therapy is often combined with other hormones, typically progestin, which is used to decrease the estrogen-related risk of uterine cancer. These combination therapies constituted approximately 25% of all U.S. oral hormone replacement prescriptions and had U.S. sales of $391 million in 2004, down from sales of $783 million in 2002.

In 2004, the market for prescription lipid disorder treatments reached approximately $26 billion worldwide, making it the single largest pharmaceutical category. Much of this growth was driven by statins, which accounted for approximately 87% of sales. Non-statin therapies, including fibrates, niacin and cholesterol absorption inhibitors, have also seen an increase in use, in particular in combination with low dose statins, a recent example being Vytorin, a cholesterol absorption inhibitor marketed by Merck/Schering-Plough.

Ospemifene is a selective estrogen receptor modulator, or SERM, an orally available small molecule that binds to estrogen receptors and selectively stimulates or blocks estrogen’s activity in different tissue types. The Company has completed two phase II clinical trials of ospemifene in which it has demonstrated beneficial effects on vaginal cell maturation, indicating improvement in the symptoms of vaginal atrophy. Based on its completed clinical and preclinical studies, the Company believes that, in addition to its beneficial effect on the symptoms of vaginal atrophy, ospemifene has a positive effect on bone density, does not increase the risk of breast and uterine cancer, and does not appear to induce hot flashes, a common side effect of SERMs.

Fispemifene is the Company’s product candidate for the treatment of the symptoms of andropause. Unlike testosterone replacement therapies that are typically topical or injection therapies, fispemifene is an oral treatment and is not a formulation of testosterone. Rather, fispemifene is a novel SERM that utilizes the body’s normal feedback mechanism to increase testosterone levels. In a multiple dose phase I trial, subjects treated with fispemifene demonstrated an increase in testosterone levels.

QRX-401 and QRX-431 are the Company’s two product candidates for the oral treatment of elevated levels of low-density lipoprotein cholesterol, or LDL cholesterol, the so-called “bad cholesterol.” In preclinical studies with monkeys, QRX-401 demonstrated the ability to lower LDL cholesterol as well as lipoprotein(a), also referred to as Lp(a), high levels of which are associated with an increased risk of stroke and coronary artery disease. The Company’s second product candidate for the treatment of elevated cholesterol levels, QRX-431, has demonstrated the ability to reduce LDL cholesterol and Lp(a) levels and cause weight loss in monkeys.

Expenses from research and development operations increased $1.0 million for the nine months ended September 30, 2005 compared to the same period in 2004.

General and administrative expenses increased $1.1 million to $2.2 million for the nine months ended September 30, 2005 compared to $1.1 million for the same period in 2004.