Bioenvision Reports 2005 Year-End Financial Results

-- Patient enrollment completed in a Phase II clinical trial for treatment of chronic hepatitis C with Virostat

-- Patient enrollment commenced in Phase II pre-menopausal and Phase IV post-menopausal advanced breast cancer trials with Modrenal

-- Public offering Bioenvision stock raised $56.4 million

-- Revenues increased 50.0%

Prior to the fourth quarter of 2005, we tested for impairment ourmethylene blue intangibles acquired in connection with the Pathagonacquisition and determined that, based on our assumptions, the sum ofthe expected future cash flows, undiscounted and pertaining solely andexclusively to approved indications, exceeded the carrying value ofits long-lived assets and therefore we did not recognize animpairment. At June 30, 2005, we estimated that our undiscountedfuture cash flows, again relating solely and exclusively to approveduses of methylene blue, were less than the carrying value. As aresult, we recognized a non-cash impairment loss of $5,276,000, equalto the difference between the estimated future cash flows for approveduses of methylene blue, discounted at an appropriate rate, and thecarrying amount of the asset.

"We have made considerable progress in developing our productportfolio over the past 12 months and now have multiple products inclinical trials," commented Christopher B. Wood, M.D., chairman andchief executive officer of Bioenvision. "We have submitted a MarketingAuthorization Application, the European equivalent of a U.S. New DrugApplication, with the European Medicines Evaluation Agency (EMeA) forEuropean approval of clofarabine in relapsed or refractory pediatricacute leukemia. We anticipate an opinion from the EMeA in theimmediate future, which is our next important clofarabine-relatedmilestone."

Dr. Wood continued, "In addition, we are currently selling oursecond product, Modrenal(R), in the United Kingdom using our own salesforce. Modrenal(R) is approved in the U.K. for the treatment ofpost-menopausal advanced breast cancer. In addition to these approvedcancer therapeutics, the Company has completed enrollment of a PhaseII clinical trial with Virostat for the treatment of Hepatitis C.

"We were delighted to have reported in the past quarter goodresults from the ongoing clinical studies of clofarabine in pediatricand adult acute leukemia trials. These encouraging results, to date,compare favorably to those reported in the Phase II pivotal trial,which led to FDA approval of clofarabine for the treatment ofrelapsed/refractory pediatric Acute Lymphoblastic Leukemia (ALL). Weexpect to use these data to support our current MarketingAuthorization Application in Europe for pediatric leukemia. It alsooffers an encouraging sign for our adult AML trial."

For the three months ended June 30, 2005 and 2004, Bioenvisionrecorded revenues of $991,000 and $1.3 million, respectively. Thisdecrease of 26.3% is due to a decrease in license and royalty revenueof $350,000 and R&D contract revenue of $250,000 offset by an increasein product sales of $247,000. The decrease in R&D contract revenue isdue to the Company's exclusion of approximately $1.1 million ofrevenues. However, based upon the provisions in the contract with ourco-development partner, these revenues, if not paid, can be offset byfuture royalty earnings from European sales.

SG & A expenses for the three months ended June 30, 2005 and 2004were approximately $3.3 million and $2.0 million, respectively. Thisincrease of 64.6% is due both to an increase in costs associated withan increase in head count in both the New York and Edinburgh officesand increases in consulting and legal fees due to the expansion ofregulatory and investor relations initiatives, and the restatement ofthe Company's financial statements included in the Company's 2004annual report on Form 10-KSB.

Research and development costs for the three months ended June 30,2005 were $4.9 million, compared with $2.3 million for the threemonths ended June 30, 2004. This increase of 110.0% is due to costsprimarily associated with the increased development activities andongoing clinical trials for clofarabine for pediatric leukemia inEurope, adult AML (Acute Myeloid Leukemia) and Virostat for ongoing,multi-center investigator sponsored Phase II clinical trials beingconducted in Egypt and Southern Europe.

Net loss available to shareholders was $14.2 million, or $0.31 pershare for the three months ended June 30, 2005, compared with net lossavailable to shareholders of $3.1 million, or $0.13 per share for thethree months ended June 30, 2004.

For the years ended June 30, 2005 and 2004, Bioenvision recordedrevenues of $4.7 million and $3.1 million, respectively. This increaseof 50.0% is due to an increase in license and royalty revenue of$449,000, product sales of $611,000, and research and developmentcontract revenue of $489,000. The decrease in R&D contract revenue isdue to the Company's exclusion of approximately $1.1 million ofrevenues. However, based upon the provisions in the contract with ourco-development partner, these revenues, if not paid, can be offset byfuture royalty earnings from European sales.

SG & A expenses for the years ended June 30, 2005 and 2004 wereapproximately $10.2 million and $9.1 million, respectively. Thisincrease of 12.1% is due both to an increase in costs associated withan increase in head count in both the New York and Edinburgh officesand increases in consulting and legal fees due to the expansion ofregulatory and investor relations initiatives, and the restatement ofthe Company's financial statements included in the Company's 2004annual report on Form 10-KSB.

Research and development costs for the years ended June 30, 2005were $10.9 million, compared with $4.9 million for the year ended June30, 2004. This increase of 123.1% is due to costs primarily associatedwith the increased development activities and ongoing clinical trialsfor clofarabine for pediatric leukemia in Europe, adult AML (AcuteMyeloid Leukemia) and Virostat for ongoing, multi-center investigatorsponsored Phase II clinical trials being conducted in Egypt andSouthern Europe.

Net loss available to shareholders was $24.7 million, or $0.72 pershare for the year ended June 30, 2005, compared with net lossavailable to shareholders of $11.5 million, or $0.57 per share for theyear ended June 30, 2004.

Bioenvision had cash and cash equivalents and short-terminvestments at June 30, 2005 of $64.1 million, compared with $18.9million at June 30, 2004. The increase in the cash position is due tothe public offering of 7.5 million shares of common stock in February2005, which raised $56.4 million in net proceeds to the Company.

Conference Call

Bioenvision management will host a conference call to discussthese results on Thursday, October 13, 2005 at 8:00 a.m. EDT. Toparticipate in the live call by telephone, please dial 877-825-5811from the U.S. and Canada or 973-582-2767 from outside the U.S. Atelephone replay of the call will be available beginning at 10:00 a.m.EDT October 13, 2005 until 11:59 p.m. EDT October 27, 2005 by dialing877-519-4471 or 973-341-3080 and entering reservation number 6517269.

Those interested in listening to the conference call live via theInternet may do so by visiting Bioenvision's web site atwww.bioenvision.com. To listen to the live call, please go to the website 15 minutes prior to its start to register, download, and installthe necessary audio software. A replay will be available on the website for 14 days.

About Bioenvision

Bioenvision's primary focus is the acquisition, development anddistribution of compounds and technologies for the treatment ofcancer. Bioenvision has a broad pipeline of products for the treatmentof cancer, including: Clofarabine (in co-development with GenzymeCorporation), Modrenal(R) (for which Bioenvision has obtainedregulatory approval for marketing in the United Kingdom for thetreatment of post-menopausal breast cancer following relapse toinitial hormone therapy), and other products in clinical trials.Bioenvision is also developing anti-infective technologies, includingthe OLIGON technology; an advanced biomaterial that has beenincorporated into various FDA approved medical devices. For moreinformation on Bioenvision please visit our Web site atwww.bioenvision.com.

Certain statements contained herein are "forward-looking"statements (as such term is defined in the Private SecuritiesLitigation Reform Act of 1995). Because these statements include risksand uncertainties, actual results may differ materially from thoseexpressed or implied by such forward-looking statements. Specifically,factors that could cause actual results to differ materially fromthose expressed or implied by such forward-looking statements include,but are not limited to: risks associated with preclinical and clinicaldevelopments in the biopharmaceutical industry in general and inBioenvision's compounds under development in particular; the potentialfailure of Bioenvision's compounds under development to prove safe andeffective for treatment of disease; uncertainties inherent in theearly stage of Bioenvision's compounds under development; failure tosuccessfully implement or complete clinical trials; failure to receivemarketing clearance from regulatory agencies for our compounds underdevelopment; acquisitions, divestitures, mergers, licenses orstrategic initiatives that change Bioenvision's business, structure orprojections; the development of competing products; uncertaintiesrelated to Bioenvision's dependence on third parties and partners; andthose risks described in Bioenvision's filings with the SEC.Bioenvision disclaims any obligation to update these forward-lookingstatements.
BIOENVISION, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30, June 30,
2005 2004
-------------------------
ASSETS
Current assets
Cash and cash equivalents $31,407,533 $18,875,675
Restricted cash 290,000 290,000
Short-term securities 32,746,948 -
Accounts receivable (less allowances for
bad debts of $869,220 and $0,
respectively) 1,785,779 2,627,773
Inventory 277,908 -
Other current assets 342,628 253,311
-------------------------
Total current assets 66,850,796 22,046,759

Property and equipment, net 279,778 47,857
Intangible assets, net 8,252,936 14,563,660
Goodwill 1,540,162 1,540,162
Security Deposits 209,665 79,111
Deferred costs 3,656,798 3,893,295
-------------------------

Total assets $80,790,135 $42,170,844
=========================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable $1,602,267 $1,495,866
Accrued expenses and other current
liabilities 4,581,444 1,322,584
Accrued dividends payable 56,404 90,141
Deferred revenue 498,607 551,828
-------------------------
Total current liabilities 6,738,722 3,460,419

Deferred revenue 7,437,598 7,909,598
-------------------------
Total liabilities 14,176,320 11,370,017
-------------------------
Stockholders' equity
Convertible Preferred stock - $0.001 par
value; 20,000,000 shares authorized;
2,250,000 and 3,341,666 shares issued and
outstanding at June 30, 2005 and
June 30, 2004, respectively (liquidation
preference $6,750,000 and $10,024,998,
respectively) 2,250 3,342
Common stock - $0.001 par value; 70,000,000
shares authorized; 40,558,948 and
28,316,163 shares issued and outstanding
at June 30, 2005 and June 30, 2004,
respectively 40,559 28,316
Additional paid-in capital 128,946,717 68,517,702
Deferred compensation (145,646) (223,990)
Accumulated deficit (62,331,005) (37,664,141)
Accumulated other comprehensive income 100,940 139,598
-------------------------
Stockholders' equity 66,613,815 30,800,827
-------------------------

Total liabilities and stockholders'
equity $80,790,135 $42,170,844
=========================


BIOENVISION, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

Year ended
June 30,
----------------------------
2005 2004
----------------------------
Revenue
License and royalty revenue $1,463,326 $1,014,717
Product sales 611,346 -
Research and development contract
revenue 2,576,502 2,087,497
----------------------------

Total revenue 4,651,174 3,102,214

Costs and expenses
Cost of products sold (including royalty
expense of $524,755 for the year ended
June 30, 2005) 921,262 -
Research and development 10,894,925 4,882,574
Provision for bad debts 869,220 -
Selling, general and administrative 10,181,711 9,082,420
(includes stock based compensation
expense of $793,761 and $3,491,252
for the years ended June 30, 2005 and
2004, respectively)
Depreciation and amortization 1,438,517 1,348,064
Loss on impairment 5,276,162 -

Total costs and expenses 29,581,797 15,313,058
----------------------------

Loss from operations (24,930,623) (12,210,844)

Interest income (expense)
Interest and finance charges (79,484) -
Interest income 747,322 99,763
----------------------------

Net loss before income tax benefit (24,262,785) (12,111,081)

Income tax benefit - 1,459,814
----------------------------

Net loss (24,262,785) (10,651,267)

Cumulative preferred stock dividend (404,079) (856,776)
----------------------------

Net loss available to common stockholders $(24,666,864) $(11,508,043)
============================

Basic and diluted net loss per share of
common stock $(0.72) $(.57)
============================

Weighted-average shares used in
computing basic and diluted
net loss per share of common stock 34,042,391 20,257,482
============================