Exhibit
99.5
Letter
to Shareholders
Dear
Shareholder:
I am
pleased to have the opportunity to share with you the highlights of 2008 and our
plans for 2009. Lorus has continued to make significant progress over the past
year that continues to bring us closer to our goal in the fight
against cancer.
Over
the past two years Lorus has made important strategic and operational changes to
better position the Company for success while our underlying philosophy and
mandate remains the same: focus on innovation and quality.
By repositioning our product portfolio and strategic focus, Lorus
continues to achieve mile stones on our path
to success.
Our
strength is in our people and the dedicated research expertise they have
brought. We are fortunate to have a team as dedicated
to increasing stakeholder value as they are to our most passionate pursuit
- -discovering and developing drugs with high safety profiles that will provide
cancer patients with an extended, high quality of life that is both rewarding
and productive. The near and long-term success of Lorus is based on the quality
of our science and we take pride in our abilities to discover and develop
novel products and technologies for the management of
cancer.
Key
Accomplishments in 2008
Product
Development
We
are very excited about the progress during the year in our promising small
molecule drug program. We initiated GLP toxicology studies for our lead
anticancer small molecule drug candidate LOR-253. The toxicology studies now
completed but awaiting final results are designed to support the filing of an
Investigational New Drug (IND) application with the U.S. FDA for LOR-253 to
initiate a Phase I clinical study in cancer indications. Lorus intends to submit
an IND for LOR-253 during the first quarter of calendar 2009,followingsuccessful
completion of the toxicology program.
We
continue to progress in the development of our lead clinical-stage drug
LOR-2040. During the year we announced the completion of a proof-of-concept
clinical trial in Acute Myeloid Leukemia (AML), and expansion of our LOR-2040
development program in this indication, with initiation of a more advanced Phase
II clinical trial with LOR-2040 and high dose Ara-C in refractory and relapsed
AML. The advanced Phase II clinical trial underway includes both an efficacy
study and a novel additional study to measure intracellular target
activities and pharmacological synergies between the
two agents.
In order
to increase the commercial opportunity of LOR-2040,
Lorus commenced a development program aimed at expanding the
therapeutic application of LOR-2040 for the treatment of superficial bladder
cancer. We believe local administration into the bladder provides the
opportunity to expose the bladder tumor to higher levels of drugs, with the
objective to prevent tumor cells from becoming invasive and spreading to other
organs, and represents a novel route of delivery for this compound. In August
2008 we announced the successful completion of GLP toxicology studies with
LOR-2040. Two studies were conducted to assess toxicity of LOR-2040 when
administered by intravesical (direct) administration into the bladder. In both
studies, no evidence of toxicity was seen following single or repeated doses of
LOR-2040 given with this method of administration. Toxicity was evaluated based
on a wide range of
observations including detailed examination of urinary tract
tissues.
Corporate
Developments
In
April 2008 Lorus signed an exclusive multinational license agreement with Zor
Pharmaceuticals LLC (“ZOR”) formed as a subsidiary of Zoticon Bioventures Inc.,
to further develop and commercialize Virulizin® for human therapeutic
applications. ZOR is responsible for the cost of all the clinical development,
regulatory submissions and commercialization of Virulizin® in North and South
America, Europe and Israel. Under the terms of the licensing agreement, we are
entitled to receive payments in excess
of US$10 million in upfront and various clinical and regulatory milestones
payments as well as royalties that vary from 10-20% depending on achieving of
sales of Virulizin®. Lorus also received
25% of the initial equity in ZOR. In addition, Lorus entered into a Service
Agreement with ZOR to assist in the transfer of
knowledge for moving forward with the clinical
development program for Virulizin®.
In
July 2007 Lorus completed a corporate reorganization resulting in approximately
$6.9 million in additional cash for Lorus without
diluting the equity interests of
existing securityholders.
In August
2008 we successfully completed a rights offering
to Lorus shareholders to raise gross proceeds of $3.71 million.
Each shareholder received one right for each common share and 4 rights entitled
the holder to purchase one unit. Each unit consisted of a common share and ½
purchase warrant priced at $0.18expiringonAugust 7, 2010.
Building
a Solid Foundation for 2009
Lorus
is engaged in the discovery and development of novel and targeted cancer
therapies. In fiscal 2009 we will continue to focus on the development of our
small molecule drug platform, as we are optimistic that additional product
candidates could be selected for clinical development. As part of our ongoing
strategic development Lorus will continue to evaluate our strategic options with
respect to partnerships and merger and acquisition opportunities. Developing new
drug candidates with novel mechanisms of action takes many years and requires
extensive experience and resources. Our business model for drug development
involves advancing selected programs through our own efforts and simultaneously
entering into partnerships with corporate partners that can provide drug
development expertise and resources to late-stage programs.
We
believe that we have set difficult, yet attainable, goals for 2009 and
achievement of those goals will increase the value of
Lorus as a partnership candidate and for our
shareholders. We remain committed to building Lorus, the leading
company engaged in the development of targeted therapies for the treatment of
cancer. I truly appreciate your continued support and look forward to keeping
you updated on our progress.
Sincerely
yours,
President
and Chief Executive Officer