Altachem Pharma releases financial results for the six months ended July 31, 2005

Trading Symbol: AAF:TSX Venture Exchange

EDMONTON, Sept. 13 /CNW/ - Altachem Pharma Ltd. ("Altachem" or the
"Company") announces a summary of its financial results and highlights for the
six month period ended July 31, 2005.

Highlights of Q2, fiscal 2006 and subsequent events

-   Net consolidated loss for the three and six months ended July 31,
    2005 was $640,509 or $0.02 per share and $1,455,179 or $0.04 per
    share as compared to a consolidated loss of $1,231,733 or $0.04 per
    share and $2,235,539 or $0.07 per share for the three and six months
    ended July 31, 2004.

-   Awarded a $110,000 grant from Alberta Ingenuity Fund, receivable over
    two years, to help support the Company's program in Prostate Cancer.

-   Announced a reconstitution of the Company's Scientific Advisory
    Board.

-   Received positive China testing results for Bionex hand gel
    disinfectant.

-   Received Health Canada approval to commence a Phase I clinical trial
    for HB Topical.

-   Received approval from the Australian Patent Office for the
    immunotherapy applications of hypocrellin derivatives.

"Our net loss for the period was significantly lower than that for the
corresponding period last year and shows that Altachem has been successful in
reducing expenses and leveraging our own dollars with non-dilutive government
support" commented Dr. David Cox, President & CEO. "Despite this, we have been
able to accomplish some very important objectives, most notably the approval
from Health Canada to commence a phase I clinical trial for our lead product,
ACP-SL017. We anticipate the return of assets from one of our Chinese
subsidiaries very shortly which will extend our working capital considerably".

Financial Results

Net consolidated loss for the three and six months ended July 31, 2005
was $640,509 or $0.02 per share and $1,455,179 or $0.04 per share as compared
to a consolidated loss of $1,231,733 or $0.04 per share and $2,235,539 or
$0.07 per share for the three and six months ended July 31, 2004.
Research and development expenditures totalled $319,467 and $695,210 for
the three and six months ended July 31, 2005 compared to $393,812 and
$1,009,100 for the three and six months ended July 31, 2004. The decrease
relates to the Company's focus on its core drug development technologies and
also to government funding during the current periods which offset R&D
expenditures. General and administrative expenses were $233,066 and $625,462
for the three and six months ended July 31, 2005 compared to $433,893 and
$1,092,573 for the same periods in 2004. The decrease here relates to a
continued streamlining of the Company's administrative operations.
The Company generates revenue from two sources: sales of Accu-MAb(TM) a
whooping cough diagnostic test kit, and sales of pharmaceutical pellet core.
Sales of Accu-MAb(TM) were $32,450 and $80,671 for the three and six months
ended July 31, 2005 compared to $23,822 and $67,494 for the three and six
months ended July 31, 2004. The Company is looking to further expand sales of
Accu-MAb(TM) in Canada, the United States and to other countries. Pelletcore
sales were $9,370 and $27,652 for the three and six months ended July 31, 2005
compared to $9,067 and $32,247 for the three and six months ended July 31,
2004.
At July 31, 2005, cash and cash equivalents was $1,863,553 as compared to
$1,931,293 at January 31, 2005. Although the majority of Company's cash
balance is held by its Chinese subsidiary Shanghai Altachem Pharma
Biotechnology Ltd. ("SACP"), the Company has almost completed the collapse of
SACP and repatriation of SACP's assets back to Canada. This process is
expected to be completed by the end of the 3rd quarter of calendar 2005.
In May, 2005, the Company completed the second and final tranche of a
private placement of units for gross proceeds of $1,050,000 (net proceeds of
approximately $1,005,000). Each unit is comprised of one common share and one-
half share purchase warrant.
The Company has been awarded a grant from Alberta Ingenuity Fund to cover
salary expenditures related to the development of the Company's photodynamic
therapy for prostate cancer. The $110,000 grant is paid over a 24 month period
from May, 2005.
Additional information related to the Company, including the Company's
financial statements, and management discussion and analysis, is on SEDAR at
www.sedar.com.

Except for historical information, this press release may contain forward-
looking statements, which reflect the Company's current expectation regarding
future events. These forward-looking statements involve risk and
uncertainties, which may cause but are not limited to, changing market
conditions, the successful and timely completion of clinical studies, the
establishment of corporate alliances, the impact of competitive products and
pricing, new product development, uncertainties related to the regulatory
approval process and other risks detailed from time to time in the Company's
ongoing quarterly and annual reporting.

  TSX Venture Exchange has neither approved nor disapproved of the
                    information contained herein

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