NUCRYST Announces Distribution of Supplemental Information In Connection with Special Meeting of Shareholders

PRINCETON, NJ, Jan. 15 /PRNewswire-FirstCall/ - NUCRYST Pharmaceuticals Corp. ("Nucryst") (TSX:NCS/NASDAQ:NCST) today announced that it will be distributing to shareholders an additional supplement (the "Supplement") to the Notice and Information Circular dated November 25, 2009 previously delivered to shareholders in connection with the Special Meeting of Shareholders that was adjourned on December 31, 2009. The special meeting was originally held to consider a special resolution (the "Amalgamation Resolution") to approve the proposed amalgamation of NUCRYST with a newly formed subsidiary of The Westaim Corporation ("Westaim") to form Amalco (the "Amalgamation"). The meeting was adjourned until January 22, 2010 to afford NUCRYST additional time to allow for the United States regulatory review process associated with a going private transaction. The Supplement is being distributed in response to comments received from the United States Securities and Exchange Commission in order to provide shareholders with additional information regarding the matter to be voted upon at the reconvened meeting. On January 22, 2010, the Company expects to further adjourn the meeting until February 8, 2010 to allow shareholders adequate time to consider the information provided in the Supplement.

At the reconvened meeting on February 8, 2010, shareholders will be asked to consider and, if deemed appropriate, to re-approve the Amalgamation Resolution. After reviewing the information in the Supplement, Shareholders that have previously voted on the Amalgamation Resolution may change their vote prior to the reconvened meeting by following the instructions provided in the Supplement. For those shareholders who have previously voted in respect of the Amalgamation Resolution and do not wish to change their vote, no action is required. Under the Amalgamation as proposed, Nucryst shareholders other than Westaim will receive for each issued and outstanding share in Nucryst one redeemable preferred share in the capital of Amalco, which will be redeemed for US$1.77 in cash upon the completion of the Amalgamation. If the Amalgamation is ultimately approved by shareholders and completed, Nucryst intends to delist from the TSX and NASDAQ stock exchanges.

This news release is for information purposes only and is not a substitute for the definitive agreements or other disclosures provided in the Information Circular, Supplement and previous supplements provided to shareholders in relation to the Amalgamation. There can be no assurance that the closing conditions of the Amalgamation will be satisfied, or that the transaction will be completed as proposed or at all.

About NUCRYST Pharmaceuticals Corp.

NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS) sold its Acticoat business, constituting substantially all of its assets, on December 22, 2009. The Company now consists primarily of cash and short-term investments and no longer has any operating income. The Company retains a few employees who are working towards the completion of the proposed Amalgamation.

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada (collectively "forward-looking statements"). Forward-looking statements in this news release include, but are not limited to, statements regarding the completion of the proposed Amalgamation described. With respect to the forward-looking statements contained in this news release, readers are cautioned that numerous risks, uncertainties and other factors could cause actual results or events to differ materially from those indicated in these statements including, but not limited to: the failure to satisfy any of the conditions to closing of the amalgamation agreement; future shareholder actions with respect to the proposed Amalgamation; our ability to satisfy regulatory and stock exchange standards and requirements to complete the proposed Amalgamation; the uncertainty of our future operating results following the completion of the sale of the business. Although we have attempted to identify the important risks, uncertainties and other factors that could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements in this release, there may be other factors that cause actual results or events to differ from those expressed or implied in forward looking statements. For a more thorough discussion of the risks associated with our business, see the "Risk Factors" section in our Annual Report on Form 10-K for the year ended December 31, 2008 and in our Quarterly Reports on Form 10-Q for 2009 as filed with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov and with securities authorities in Canada on SEDAR at www.sedar.com. All forward-looking statements are expressly qualified in their entirety by this cautionary statement and NUCRYST disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future developments or otherwise after the date hereof.

SOURCE NUCRYST Pharmaceuticals Corp.