FDA Meeting Provides Several Potential Paths Forward

Vancouver, BC, CANADA – June 3, 2004 – Micrologix Biotech Inc. (“Micrologix”) (TSX: MBI; OTC: MGIXF) has entered into an exclusive negotiation period to license MBI-226 (omiganan pentahydrochloride 1% gel), an antimicrobial cationic peptide in Phase III clinical development for the prevention of catheter-related infections, to a US-based specialty pharmaceutical company (“Specialty Pharma”).

The negotiation period is for up to 60 days (the “Exclusivity Period”) during which Micrologix will negotiate exclusively with Specialty Pharma the terms of a definitive license agreement for MBI-226.  Micrologix will receive a non-refundable fee as compensation for suspending licensing discussions with other parties during the Exclusivity Period.  Further terms have not been disclosed.

Micrologix has also met with the United States Food and Drug Administration (“FDA”) regarding the MBI-226 regulatory path forward. Based on the meeting, several options remain available for advancing the program toward market approval. The FDA encouraged Micrologix to complete a confirmatory Phase III trial using, as the primary endpoint, statistically significant data from the first Phase III study completed in July 2003 (see “About MBI-226” below), specifically local catheter site infections (“LCSIs”).  Although a more challenging path, the meeting also resulted in the opportunity to submit a New Drug Application (“NDA”) for catheter-related bloodstream infections (“CRBSIs”) based on statistically significant data from the first Phase III study.  Other options for advancing MBI-226 also resulted from the meeting.  Further discussions with the FDA are anticipated in order to address the timing and process for an NDA filing, including any supportive information or studies that might be of use in such a submission. The regulatory path and process will also be managed further with Specialty Pharma during negotiations and after execution of the definitive license agreement.  

Jim DeMesa, M.D., President & CEO of Micrologix added, “I am very proud of our team for advancing            MBI-226 to this stage, since great progress has been made toward a viable market opportunity.  In addition, entering into a commercial partnership is in line with our business model and will allow us to focus on our other high priority and value-driving clinical programs, such as MBI-3253 (entering Phase II for the treatment of hepatitis C virus infections) and MITO-4509 (entering Phase II for Alzheimer’s disease, subject to the completion of our announced acquisition of MitoKor)”.  

About MBI-226

MBI-226 is a topical cationic antimicrobial peptide in Phase III clinical development for the prevention of catheter-related infections. In July 2003, Micrologix completed a pivotal Phase III clinical study of MBI-226, which included over 1400 patients in 29 centers in the US.  The primary endpoint, a reduction in CRBSIs, resulted in a 15% improvement as compared to the accepted standard of care, povidone-iodine, which was not statistically significant. Both secondary endpoints of the study, reduction of catheter colonization and local catheter site infections (widely recognized precursors to CRBSIs), achieved a high level of statistical significance compared to the standard of care (p=0.002 and p=0.004, respectively).  A meeting with the FDA in January 2004 determined that data from the secondary endpoints of the above Phase III study could be used in support of an NDA.    

About Micrologix

Micrologix Biotech Inc. is engaged in the research, development, and commercialization of drugs that advance therapy, improve health, and enrich lives. The Company has four product candidates in human

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June 3, 2002