Westaim Announces Amalgamation Agreement with NUCRYST Pharmaceuticals

TORONTO, Nov. 10 /PRNewswire-FirstCall/ - The Westaim Corporation (TSX: WED)
today announced the execution of an amalgamation agreement with NUCRYST
Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Under the agreement, NUCRYST
will amalgamate with a newly-formed, wholly-owned subsidiary of Westaim (the
"Amalgamation"). Under the terms of the Amalgamation, each holder of NUCRYST
common shares (other than Westaim) will receive one redeemable preferred share
in the capital of the amalgamated company, which will be redeemed for US$1.77
in cash upon completion of the Amalgamation. Pursuant to the Amalgamation,
Westaim will receive all of the common shares of the amalgamated company.
The Amalgamation follows the execution of a definitive agreement between
NUCRYST and subsidiaries of Smith & Nephew plc. (LSE: SN; NYSE: SNN) under
which NUCRYST has agreed to sell all of its operations and assets including
all rights to its proprietary nanocrystalline silver technology to Smith &
Nephew for cash considerations of US$21 million, plus the value of working
capital, and subject to certain adjustments (the "Sale Transaction"). The
closing of the Sale Transaction is subject to customary conditions including
the approval of NUCRYST shareholders. In this regard, Westaim has entered into
an agreement with Smith & Nephew under which it has agreed to vote its shares
in NUCRYST in favour of the Sale Transaction, subject to certain limited
exceptions applicable where a financially superior proposal has been made.
The completion of the Amalgamation is subject to certain conditions including
the closing of the Sale Transaction and the approval of NUCRYST shareholders
including the approval by a simple majority of the votes cast by NUCRYST
shareholders other than Westaim and the directors and officers of NUCRYST. The
Sale Transaction and the Amalgamation will be submitted to the shareholders of
NUCRYST for consideration at a special meeting to be called for such purpose.
Details regarding the Smith & Nephew Sale Transaction and the Amalgamation
agreement will be included in NUCRYST's management information circular which
is expected to be mailed to shareholders in late November, 2009 for a
shareholders meeting to be held in December, 2009.
"We believe that the amalgamation of Westaim and NUCRYST is in the best
interest of the shareholders in both companies," said Cameron MacDonald,
President & CEO of Westaim. "This transaction will strengthen Westaim's cash
position as we review opportunities to deploy our capital and maximize the
value of our assets."
Following the completion of the Amalgamation, NUCRYST intends to delist from
the TSX and NASDAQ stock exchanges.

About The Westaim Corporation

The Westaim Corporation invests, directly and indirectly, through
acquisitions, joint ventures and other arrangements, with the objective of
providing its shareholders with capital appreciation and real wealth
preservation. Westaim holds an approximate 75 per cent interest in NUCRYST
Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS). Westaim's common shares are
listed on The Toronto Stock Exchange under the trading symbol WED.

About NUCRYST Pharmaceuticals Corp.

NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST; TSX: NCS) develops, manufactures
and commercializes medical products that fight infection and inflammation
using SILCRYST(TM), its patented atomically disordered nanocrystalline silver
technology. NUCRYST licensed world-wide rights for SILCRYST(TM) wound care
coating products to Smith & Nephew plc, which markets these products in over
30 countries under their Acticoat(TM) trademark. NUCRYST has developed its
proprietary nanocrystalline silver in a powder form, referred to as NPI 32101,
for use in medical devices and as an active pharmaceutical ingredient.

Certain portions of this press release as well as other public statements by
Westaim, contain forward-looking statements. Such forward-looking statements
include but are not limited to statements concerning the transactions
described herein; investment strategies and expected rates of return;
strategic alternatives to maximize value for shareholders; commercialization
strategies; capital expenditures; statements regarding earnings from Nucryst's
wound care products; projections regarding Nucryst's manufacturing cost
reimbursement revenues; statements regarding expected Nucryst cost savings and
the use or consequence of any such savings; statements relating to the
sufficiency of cash and cash equivalents to fund the activities and operations
of Nucryst or Westaim; restructuring costs, corporate costs, capital
expenditures and capital commitments; statements regarding ABCP generally,
including without limitation in respect of replacement notes and their rating
and value, the value and liquidity of Westaim's ABCP holdings; the likely
effect of changes in internal control over financial reporting; and the impact
of changes in significant accounting policies on Westaim's consolidated
financial statements. These statements are based on current expectations that
are subject to risks, uncertainties and assumptions and Westaim can give no
assurance that these expectations are correct. Westaim's actual results could
differ materially from those anticipated by forward-looking statements for
various reasons generally beyond our control, including but not limited to:
(i) failure to complete one or both of the transactions described herein; (ii)
changes in market conditions or deterioration in underlying investments; (iii)
general economic, market, financing, regulatory and industry developments and
conditions; (iv) cost estimates based upon assumptions which may prove to be
unrealistic; (v) delays or problems in receiving regulatory approvals for
Nucryst's products; (vi) the degree to which Smith & Nephew plc succeeds in
selling Acticoat(TM) products; (vii) unexpected obstacles or complexities
associated with Nucryst's technology, manufacturing processes and new
applications; (viii) patent and technical hurdles which might inhibit or delay
the ability of Nucryst to develop or commercialize technologies or products;
and (ix) other risk factors set forth in Westaim's Annual Report or Annual
Information Form. Westaim disclaims any intention or obligation to revise
forward-looking statements whether as a result of new information, future
developments or otherwise except as required by law. All forward-looking
statements are expressly qualified in their entirety by this cautionary
statement.

SOURCE Westaim Corporation

Jeff Sarfin, Chief Financial Officer, The Westaim Corporation, (416) 203-2253,
info@westaim.com