Chondrogene Reports 2004 Fourth Quarter and Year End Financial Results

TORONTO, CANADA (April 6, 2005): ChondroGene™ Limited (TSX Venture: CDG) announced its financial results today for the fourth quarter and year ended December 31, 2004.

For the fourth quarter of 2004, ChondroGene reported revenues of $1,560,119 compared to revenues of $1,535,993 for the fourth quarter of 2003. The net loss for the quarter was $422,071 or $0.01 per share, compared to a net loss of $87,957 or $0.00 per share for the quarter ended December 31, 2003.

ChondroGene reported revenues of $2,226,807 for the year ended December 31, 2004, compared to revenues of $3,767,129 for the year ended December 31, 2003. Revenues for the year were attributable to the research collaboration with Pfizer Inc (NYSE:PFE). The net loss for the year was $5,617,146 or $0.16 per share, compared to a net loss of $342,803 or $0.01 per share for the year ended December 31, 2003. As of December 31, 2004, the Company had $6,381,870 in cash and cash equivalents. Subsequent to the year-end, ChondroGene received a payment of US$4.0 million pursuant to the terms of the new Pfizer osteoarthritis collaboration entered into in December 2004.

"The past year was a very positive one for our company, highlighted by some key events. We successfully completed our Pfizer osteoarthritis collaboration in October and entered into a new, broader 2-year collaboration with Pfizer to continue the work that was begun in the initial collaboration. We raised US$5 million through Rodman and Renshaw in New York, which not only provided additional capital for growth, but also increased our visibility in the US financial and biotech markets", stated K. Wayne Marshall, President & CEO of ChondroGene. "In addition, we made tremendous strides in applying our Sentinel Principle™ approach in a wide variety of disease areas including neuropsychiatric conditions, cardiovascular diseases and cancer. Based on the results from our preliminary studies, we are currently pursing the development of diagnostic assays which we expect to offer within the next 12 months."

2004 Highlights

• Dr. Victor Dzau, Chancellor for Health Affairs at Duke University and President and CEO of the Duke University Health System, was appointed as a Senior Scientific Advisor to ChondroGene. Dr. Dzau is involved in cardiovascular research with a particular interest in the molecular and genetic mechanisms of cardiovascular disease and applied genomic and gene transfer technologies to develop novel therapeutic approaches.
• Four major scientific papers were published in the year:
  1. Human genome project and cardiovascular disease genes was published in July in the Second Edition of Kenneth Chien's landmark textbook, Molecular Basis of Cardiovascular Disease: A Companion to Braunwald's Heart Disease;
  2. First Comprehensive Mapping of Cartilage Transcripts to the Human Genome was published in the August issue of Genomics;
  3. Genetic Markers: Progress and Potential for Cardiovascular Disease was published in the August 2004 Supplement to Circulation entitled Markers of Malign Across the Cardiovascular Continuum: Interpretation and Application;
  4. Assessing the Validity of Blood-Based Gene Expression Profiles for the Classification of Schizophrenia and Bipolar Disorder: A Preliminary Report was published in the American Journal of Medical Genetics Part B: Neuropsychiatric Genetics in January 2005.
• ChondroGene completed a US$5.5 million private placement in August with US$5 million raised in the US through Rodman and Renshaw and US$0.5 million raised in Canada through PowerOne Capital Markets.
• In October, ChondroGene successfully completed its initial research collaboration with Pfizer Inc to identify biomarkers for osteoarthritis (OA) and identify new drug targets for disease modifying OA drugs.
• ChondroGene entered into a new research collaboration with Pfizer in December to continue on the work that was begun in the first collaboration. The new agreement is valued at US$7.3 million compared to US$4.7 million for the initial deal and is broader in scope than the initial collaboration.
• During the year, the Company expanded the application of the Sentinel Principle approach outside of osteoarthritis to a variety of disease areas including cancer, cardiovascular disease, and central nervous system disorders. Preliminary data was obtained in over 40 specific human disease indications.

Annual Meeting

The Company's Annual General Meeting of Shareholders will be held on Monday June 13, 2005 at 4:30 PM, in the Ketchum Room at the Toronto Board of Trade, 1 First Canadian Place, Toronto, Ontario.

Financial statements are available in the attached pdf document:

About GeneNews

GeneNews is focused on the application of functional genomics to enable early diagnosis and personalized therapeutic intervention based on disease-specific biomarkers. The Company has developed a novel approach, the Sentinel Principle™, to detect and stage virtually any disease or medical condition from a simple blood sample. GeneNews is currently applying the Sentinel Principle™ in major areas with unmet clinical needs such as cancer, arthritis, cardiovascular disease and neurological disorders. GeneNews' first product, ColonSentry™, is a convenient and patient-friendly blood-based test that can assess an individual's current risk for colorectal cancer. For more information on GeneNews, visit www.genenews.com.

This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. The Company disclaims any obligation to update these forward-looking statements.