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MERGER PROPOSED — YOUR VOTE IS VERY IMPORTANT

     QLT Inc. and Atrix Laboratories, Inc. have agreed to the merger of Atrix and QLT under the terms of a merger agreement. We are proposing the merger because we believe it will benefit the shareholders of both companies by creating a bio-pharmaceutical company with a stronger, growing and more diverse revenue base, a more robust commercial and clinical product pipeline, access to platform drug delivery technologies and the financial resources to create greater shareholder value than either company might achieve independently.

     When the merger is completed, the holders of Atrix common stock will be entitled to receive one QLT common share and U.S.$14.61 in cash for each share of Atrix common stock that they own (subject to possible adjustment as described on page 92 of this joint proxy statement/ prospectus), and the holders of Atrix preferred stock will be entitled to receive that number of QLT common shares and that amount of cash that they would have been entitled to receive if they had converted their preferred stock into common stock immediately before the merger. We estimate that QLT will issue approximately 23.2 million QLT common shares in the merger (excluding shares issuable upon exercise of outstanding Atrix options, but including shares issuable upon exercise of the outstanding Atrix warrant) and that immediately after the merger Atrix stockholders will hold approximately 25.0% of the then-outstanding QLT common shares, based on the number of QLT common shares and shares of Atrix capital stock outstanding on September 30, 2004. QLT common shares are traded on the NASDAQ National Market under the trading symbol “QLTI” and listed on the Toronto Stock Exchange under the trading symbol “QLT.” On October 13, 2004, QLT common shares closed at U.S.$15.45 per share as reported on the NASDAQ National Market. QLT shareholders will continue to own their existing shares, which will not be affected by the merger.

     It is a condition to completion of the merger that the Atrix stockholders adopt the merger agreement and approve the merger and the QLT shareholders approve the issuance of QLT common shares pursuant to the merger agreement. The obligations of QLT and Atrix to complete the merger are also subject to the satisfaction or waiver of several conditions, including receiving clearance from regulatory agencies. More information about QLT, Atrix and the merger is contained in this joint proxy statement/prospectus. We encourage you to read this joint proxy statement/prospectus, including the section entitled “Risk Factors” beginning on page 21 before voting.

     The board of directors of QLT has unanimously approved the merger agreement and the issuance of QLT common shares pursuant to the merger agreement. The board of directors of Atrix has unanimously approved the merger and the merger agreement. The QLT board of directors unanimously recommends that QLT shareholders vote “FOR” the proposal to approve the issuance of QLT common shares pursuant to the merger agreement. The Atrix board of directors unanimously recommends that Atrix stockholders vote “FOR” the proposal to adopt the merger agreement and approve the merger.

     QLT and Atrix have each scheduled special meetings in connection with the respective votes required. The dates, times and places of the meetings are as follows:

     Your vote is very important. Whether or not you plan to attend your company’s special meeting, please take the time to vote by marking your votes on the enclosed proxy card, if you are an Atrix stockholder, or instrument of proxy, if you are a QLT shareholder, signing and dating it, and returning it to your company in the enclosed envelope.

Sincerely, Paul J. Hastings President and Chief Executive Officer QLT Inc.		Sincerely, David R. Bethune Chairman of the Board and Chief Executive Officer Atrix Laboratories, Inc.

     Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

     This joint proxy statement/prospectus is dated October 14, 2004, and is first being mailed to QLT shareholders and Atrix stockholders on or about October 18, 2004.

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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

To the Shareholders of QLT Inc.:

      NOTICE IS HEREBY GIVEN that a special meeting of Shareholders of QLT Inc. will be held at QLT’s offices at 887 Great Northern Way, Vancouver, British Columbia, Canada, on November 19, 2004, at 9:00 a.m., Pacific time, for the following purposes:

	1. To consider and vote upon a proposal to approve the issuance of QLT common shares, pursuant to the Agreement and Plan of Merger, dated as of June 14, 2004 (the “merger agreement”), by and among QLT, Aspen Acquisition Corp., which is a wholly owned subsidiary of QLT, and Atrix Laboratories, Inc., all as more particularly described in the joint proxy statement/prospectus accompanying this notice.
	2. To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

      These items of business are described in the attached joint proxy statement/prospectus, which is a management information circular for purposes of Canadian securities laws. Only shareholders of record at the close of business on October 6, 2004, the record date for the special meeting, are entitled to notice of, and to vote at, the special meeting or any adjournment or postponement thereof. It is a condition to the closing of the merger that the share issuance is approved by the affirmative vote of the holders of a majority of QLT common shares present or represented by proxy and voting at the special meeting.

      The board of directors of QLT unanimously recommends that you vote “FOR” approval of the issuance of QLT common shares pursuant to the merger agreement.

      Whether or not you plan to attend the special meeting, please sign, date and return the enclosed instrument of proxy. Executed proxies with no instructions indicated thereon will be voted “FOR” approval of the share issuance. Even if you have returned your instrument of proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a brokerage firm, securities dealer, trust company, bank or other nominee and you wish to vote at the meeting, you must strike out the names of management’s representatives named in the instrument of proxy and insert your name in the blank space provided or, in the case of a voting instruction form, contact your intermediary. If you fail to return your instrument of proxy or to vote in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting.

	By Order of the Board of Directors,
	PAUL J. HASTINGS
	President and Chief Executive Officer

Vancouver, British Columbia, Canada

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NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To the Stockholders of Atrix Laboratories, Inc.:

     NOTICE IS HEREBY GIVEN that a special meeting of Stockholders of Atrix Laboratories, Inc. will be held at The Fort Collins Marriott, 350 East Horsetooth Road, Fort Collins, Colorado, on November 19, 2004, at 10:00 a.m. Mountain time, for the following purposes:

	1. To consider and vote upon a proposal to adopt the Agreement and Plan of Merger, dated as of June 14, 2004 (the “merger agreement”), by and among QLT Inc., Aspen Acquisition Corp., which is a wholly owned subsidiary of QLT, and Atrix and approve the merger, pursuant to which Atrix will merge with a wholly owned subsidiary of QLT, each outstanding share of Atrix common stock will be converted into the right to receive one QLT common share and U.S.$14.61 in cash, and each outstanding share of Atrix Series A Convertible Exchangeable Preferred Stock will be converted into the right to receive that number of QLT common shares and that amount of cash that the holder of such share would have been entitled to receive if the holder had converted the share into Atrix common stock immediately prior to completion of the merger.
	2. To transact such other business as may properly come before the special meeting or any adjournments or postponements of the special meeting.

     These items of business are described in the attached joint proxy statement/prospectus. Only holders of record of shares of Atrix common stock at the close of business on October 6, 2004, the record date for the special meeting, are entitled to notice of and to vote at the special meeting and any adjournments or postponements of the special meeting. It is a condition to the closing of the merger that the merger agreement is adopted by the affirmative vote of the holders of a majority of the shares of Atrix common stock outstanding at the close of business on the record date.

     The board of directors of Atrix unanimously recommends that you vote “FOR” adoption of the merger agreement and approval of the merger.

     Under Delaware law, holders of Atrix common stock who do not vote in favor of the adoption of the merger agreement and approval of the merger and holders of Atrix Series A Convertible Exchangeable Preferred Stock will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for an appraisal prior to the vote on the merger agreement and if they comply with the Delaware law procedures explained in the accompanying document. See “Dissent and Appraisal Rights” on page 144.

     Whether or not you plan to attend the special meeting, please sign, date and return the enclosed proxy card. Executed proxies with no instructions indicated thereon will be voted “FOR” adoption of the merger agreement and approval of the merger. Even if you have returned your proxy, you may still vote in person if you attend the special meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain from the record holder a proxy issued in your name. If you fail to return your proxy or to vote in person at the special meeting, your shares will not be counted for purposes of determining whether a quorum is present at the special meeting, and will effectively be counted as a vote against the adoption of the merger agreement and approval of the merger.

     Please do not send any certificates representing your Atrix stock at this time.

	By Order of the Board of Directors,
	DAVID R. BETHUNE
	Chairman of the Board and Chief Executive Officer

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ADDITIONAL INFORMATION

      This joint proxy statement/prospectus, which is a management information circular for purposes of Canadian securities laws, incorporates important business and financial information about QLT and Atrix from other documents that are not included in or delivered with this joint proxy statement/prospectus. For a listing of the documents incorporated by reference into this joint proxy statement/prospectus, please see the section entitled “Where You Can Find More Information” beginning on page 148.

      QLT will provide you with copies of this information relating to QLT, without charge, upon written or oral request to:

QLT Inc.

      In addition, you may obtain copies of the information relating to QLT, without charge, by sending an e-mail to ir@qltinc.com.

      Atrix will provide you with copies of this information relating to Atrix, without charge, upon written or oral request to:

Atrix Laboratories, Inc.

      In addition, you may obtain copies of the information relating to Atrix, without charge, by sending an e-mail to ir@atrixlabs.com.

      In order for you to receive timely delivery of the documents in advance of the QLT and Atrix special meetings, QLT or Atrix should receive your request no later than November 12, 2004.

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QUESTIONS AND ANSWERS ABOUT THE TRANSACTION AND THE SPECIAL MEETINGS

General Questions and Answers

A:	QLT and Atrix have agreed to the merger of Atrix and QLT under the terms of a merger agreement that is described in this joint proxy statement/prospectus. A copy of the merger agreement is attached to this joint proxy statement/prospectus as Annex A.

	In order to complete the merger, QLT shareholders are required to approve the issuance of QLT common shares pursuant to the merger agreement and Atrix stockholders must adopt the merger agreement and approve the merger.
	QLT will hold a special meeting of its shareholders and Atrix will hold a special meeting of its stockholders to obtain these approvals. This joint proxy statement/ prospectus contains important information about the transaction and the special meetings, and you should read it carefully. The enclosed voting materials allow you to vote your shares without attending your special meeting.
	Your vote is important. We encourage you to vote as soon as possible.

A:

We believe that the merger will benefit the shareholders of both companies by creating a biopharmaceutical company with a stronger, growing and more diverse revenue base, a more robust commercial and clinical product pipeline, access to platform drug delivery technologies and the financial resources to create greater shareholder value than either company might achieve independently. To review the reasons for the merger in greater detail, see pages 58 and 61.

A:

QLT will acquire 100% of the outstanding stock of Atrix. A wholly owned subsidiary of QLT will merge with and into Atrix, following which Atrix will merge with and into another wholly owned subsidiary of QLT. The surviving corporation in this second merger will continue as a wholly owned subsidiary of QLT. The first merger is sometimes referred to in this joint proxy statement/prospectus as the “merger”, and both mergers are sometimes collectively referred to as the “mergers” or the “transaction.”

A:

As a result of the merger, holders of Atrix common stock (other than holders who properly exercise their appraisal rights as described below) will be entitled to receive one common share of QLT and $14.61 in cash for each share of Atrix common stock they own (subject to possible adjustment as described on page 92 of this joint proxy statement/prospectus). Holders of Atrix Series A Convertible Exchangeable Preferred Stock (other than holders who properly exercise their appraisal rights as described below), which we refer to generally as Atrix preferred stock, will be entitled to receive the same number of QLT common shares and amount of cash that they would be entitled to receive pursuant to the merger agreement if they were to convert their shares into Atrix common stock immediately prior to the first merger.

	Based on the number of QLT common shares and shares of Atrix capital stock outstanding on September 30, 2004 (excluding shares issuable upon exercise of outstanding Atrix options, but including shares issuable upon exercise of the outstanding Atrix warrant), we estimate that QLT will pay to the Atrix stockholders approximately $338 million and issue approximately 23.2 million common shares pursuant to the merger agreement. Immediately after the merger, the former holders of Atrix capital stock, in the aggregate, will own approximately 25.0% of the then outstanding QLT common shares, or 22.6% if we also assume that all of the QLT 3.0% Convertible Senior Notes due 2023 were converted to QLT common shares.
	Example: If you currently own 100 shares of Atrix common stock, then as a result of the merger you will be entitled to receive 100 QLT common shares and $1,461 in cash.

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A:	Yes, QLT common shares are currently listed on the NASDAQ National Market and the Toronto Stock Exchange, and it is a condition to completion of the merger that the QLT common shares to be issued pursuant to the merger agreement be listed on the NASDAQ National Market and the Toronto Stock Exchange.

	The QLT common shares received pursuant to the merger agreement will be freely transferable under United States federal securities laws, except for common shares held by persons who are deemed to be “affiliates” (as defined under the United States Securities Act of 1933, or the Securities Act) of Atrix prior to the merger.

A:	Nothing. Each QLT common share currently outstanding will remain outstanding as a QLT common share.

A:

We are working to complete the merger as quickly as practicable. We currently expect that the merger will be completed shortly after the occurrence of the QLT and Atrix special meetings, provided the requisite approval of QLT shareholders and Atrix stockholders is obtained. However, because the merger is also subject to regulatory approvals and other closing conditions, some of which are beyond our control, we cannot predict the exact timing.

QLT Shareholder Questions and Answers

A:	QLT shareholders are being asked to approve the issuance of QLT common shares pursuant to the merger agreement, including the shares to be issued upon exercise of Atrix options to be assumed pursuant to the merger agreement and upon exercise of Atrix’s warrant, if still outstanding.

A:	The QLT special meeting will take place at QLT’s offices at 887 Great Northern Way, Vancouver, British Columbia, Canada, on November 19, 2004, at 9:00 a.m., Pacific time.

A:	The affirmative vote of the holders of a majority of the QLT common shares present or represented by proxy and voting at the QLT special meeting is required to approve the issuance of QLT common shares pursuant to the merger agreement.

A:

At least two shareholders, two proxyholders representing two shareholders, or one shareholder and a proxyholder representing another shareholder entitled to vote at the special meeting, present in person at the beginning of the meeting and collectively holding or representing by proxy in the aggregate not less than 5% of the issued QLT common shares will constitute a quorum for the QLT special meeting.

A:	Only shareholders who hold QLT common shares at the close of business on the record date, which is October 6, 2004, will be entitled to vote at the QLT special meeting.

A:	The QLT board of directors unanimously recommends that QLT shareholders vote “FOR” the proposal to approve the issuance of QLT common shares pursuant to the merger agreement. For a more complete description of the recommendation of the QLT board of directors, see page 46.

A:	Carefully read and consider the information contained or incorporated by reference in this joint proxy statement/prospectus, including its annexes. You should also determine whether you hold your shares directly in your name as a registered shareholder or through a broker or

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	other nominee, because this will determine the procedure that you must follow in order to vote. If you are a registered shareholder of QLT (that is, if you hold your QLT common shares in certificate form), you may vote in either of the following ways:

•	in person at the QLT special meeting;
•	by mail or facsimile — complete, sign and date the enclosed instrument of proxy and return it in the enclosed postage paid return envelope or by facsimile as soon as possible to QLT’s Registrar and Transfer Agent, Computershare Trust Company of Canada, Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, facsimile number: within North America at (866) 249-7775 or outside North America at (416) 263-9524.

If you hold your shares through a broker or other nominee, (meaning that your shares are held in “street name”), you should instruct your broker or other nominee to vote your shares by following the instructions provided by your broker or other nominee. Please refer to those voting instructions to see if you may submit voting instructions by telephone or over the Internet. If your shares are held in street name and you want to vote in person at the QLT special meeting, you should follow the instructions provided by, or contact, your broker or other nominee.

A:

If you properly return your instrument of proxy, but do not include instructions on how to vote, your shares will be voted “FOR” approval of the share issuance proposal. QLT’s management does not currently intend to bring any proposals to the QLT special meeting other than the share issuance proposal and does not expect any shareholder proposals. If other proposals requiring a vote of shareholders are brought before the QLT special meeting in a proper manner, the persons named in the enclosed instrument of proxy intend to vote the shares they represent in accordance with their best judgment.

A:	Your failure to return your instrument of proxy or otherwise vote will mean that your shares will not be counted in determining whether or not the issuance of QLT common shares pursuant to the merger agreement is approved nor will your shares be counted toward determining whether a quorum is present at the QLT special meeting.

A:

This means that you own QLT common shares that are registered under different names. For example, you may own some shares directly as a shareholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. It is necessary for you to vote, sign and return all of the instruments of proxy and follow the instructions for any alternative voting procedures you receive in order to vote all of the shares you own. Each instrument of proxy you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each instrument of proxy in the return envelope that accompanies that instrument of proxy.

A:	Yes. You can change your vote at any time before your shares are voted at the QLT special meeting. If you are a registered QLT shareholder, you can do this in either of the following ways:

•	by voting in person at the QLT special meeting; or
•	by a written instrument stating that the proxy is revoked, signed and delivered as described under “The QLT Special Meeting — Voting; Proxies; Revocation” below.

	If your shares are held in “street name,” you must contact your broker or other intermediary and follow the instructions provided to you in order to revoke your proxy.

A:	No. Your broker will not be able to vote your QLT common shares unless you have properly instructed your broker on how to vote. If you do not provide your broker with voting instructions, your shares may be considered present at the QLT special meeting for purposes of

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	determining a quorum, but will not be included in the computation of any vote.

A:	No. Holders of QLT common shares do not have dissent rights in connection with the actions to be taken at the QLT special meeting.

A:	There are none since the ownership of your shares in QLT will not be altered by the transaction. For a more detailed description of the U.S. and Canadian federal income tax consequences of the transaction, see “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 81 and “The Merger — Material Canadian Federal Income Tax Consequences,” beginning on page 85.

A:	You may call QLT’s proxy solicitors and information agent, Georgeson Shareholder Communications, toll-free at 1-888-288-4571.

Atrix Stockholder Questions and Answers

A:	Holders of Atrix common stock are being asked to adopt the merger agreement and approve the merger.

A:	The Atrix special meeting will take place at The Fort Collins Marriott, 350 East Horsetooth Road, Fort Collins, Colorado, on November 19, 2004, at 10:00 a.m., Mountain time.

A:	The affirmative vote of the holders of at least a majority of the outstanding shares of Atrix common stock entitled to vote at the Atrix special meeting is required to adopt the merger agreement and approve the merger.

A:	A majority of the outstanding shares of common stock entitled to vote at the Atrix special meeting, present in person or represented by proxy, will constitute a quorum for the transaction of business.

A:	Only stockholders who hold Atrix common stock at the close of business on the record date, which is October 6, 2004, will be entitled to vote at the Atrix special meeting.

A:	The Atrix board of directors unanimously recommends that holders of Atrix common stock vote “FOR” adoption of the merger agreement and approval of the merger. For a more complete description of the recommendation of the Atrix board of directors, see page 50.

A:

Carefully read and consider the information contained or incorporated by reference in this joint proxy statement/prospectus, including its annexes. You should also determine whether you hold your shares directly in your name as a registered stockholder or through a broker or other nominee, because this will determine the procedure that you must follow in order to vote. If you are a registered holder of Atrix common stock (that is, if you hold your shares in certificate form), you may vote in any of the following ways:

•	in person at the Atrix special meeting — complete and sign the enclosed proxy card and bring evidence of your ownership of common stock with you to the special meeting (the evidence of your stock ownership will serve as your authorization to vote in person);
•	by mail — complete, sign and date the enclosed proxy card and return it in the enclosed postage paid return envelope as soon as possible to American Stock Transfer & Trust Co., 59 Maiden Lane, New York, New York 10038; or

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•	by telephone or over the Internet — follow the instructions included with your proxy card. The deadline for voting by telephone or over the Internet is 11:59 p.m. Eastern time on November 18, 2004.

	If you hold your shares through a broker or other nominee (meaning that your shares are held in “street name”), you should instruct your broker or other nominee to vote your shares by following the instructions provided by your broker or other nominee. Please refer to these voting instructions to see if you may submit voting instructions by telephone or over the Internet.

A:

If you properly return your proxy card, but do not include instructions on how to vote, your shares will be voted “FOR” adoption of the merger agreement and approval of the merger. Atrix’s management does not currently intend to bring any other proposals to the Atrix special meeting and does not expect any stockholder proposals. If other proposals requiring a vote of stockholders are brought before the Atrix special meeting in a proper manner, the persons named in the enclosed proxy card intend to vote the shares they represent in their discretion in accordance with their best judgment.

A:	If you return your proxy with instructions to abstain from voting on the proposal, your shares will be counted for purposes of determining whether a quorum is present at the special meeting. However, an abstention will have the legal effect of a vote “AGAINST” the proposal.

A:

Your failure to return your proxy card or otherwise vote will mean that your shares will not be counted towards determining whether a quorum is present at the Atrix special meeting, and will make it less likely that the required vote to adopt the merger agreement and approve the merger will be obtained. Failure to return your proxy card or otherwise vote will have the legal effect of a vote “AGAINST” the proposal to adopt the merger agreement and approve the merger.

A:

This means that you own shares of Atrix common stock that are registered under different names. For example, you may own some shares directly as a stockholder of record and other shares through a broker, or you may own shares through more than one broker. In these situations, you will receive multiple sets of proxy materials. It is necessary for you to vote, sign and return all of the proxy cards or follow the instructions for any alternative voting procedures in order to vote all of the shares you own. Each proxy card you receive will come with its own prepaid return envelope. If you vote by mail, please make sure you return each proxy card in the return envelope that accompanies that proxy card.

A:	Yes. You can change your vote at any time before your shares are voted at the Atrix special meeting. If you are a registered Atrix stockholder, you can do this in any of the following ways:

•	by sending a written notice to the attention of Investor Relations at Atrix’s principal executive office, 2579 Midpoint Drive, Fort Collins, Colorado 80525;
•	by completing and submitting a new, later-dated proxy card by mail at the address specified above for delivery of proxies by mail;
•	by voting by telephone after previously voting or submitting your proxy card;
•	by voting over the Internet after previously voting or submitting your proxy card; or
•	by attending the Atrix special meeting and voting in person.

	If your shares are held in “street name,” you must contact your broker or other intermediary and follow the instructions provided to you in order to revoke your proxy.

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A:	No. Your broker will not be able to vote your shares unless you have properly instructed your broker on how to vote. If you do not provide your broker with voting instructions, your shares may be considered present at the Atrix special meeting for purposes of determining a quorum, but will have the legal effect of a vote “AGAINST” the proposal.

A:

Yes. Under the General Corporation Law of the State of Delaware, holders of Atrix common stock who do not vote in favor of adopting the merger agreement and holders of Atrix preferred stock will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery if the merger is completed, but only if they submit a written demand for an appraisal prior to the vote on the adoption of the merger agreement and approval of the merger and they comply with the Delaware law procedures explained in this joint proxy statement/ prospectus.

A:

The transaction has been structured to qualify as a reorganization for U.S. federal income tax purposes, and QLT and Atrix are required to receive opinions from their respective counsel to the effect that the transaction will so qualify and that Section 367(a)(1) of the U.S. Internal Revenue Code of 1986, referred to in this joint proxy statement/prospectus as the “Code,” will not apply to a holder’s surrender of Atrix capital stock pursuant to the transaction (except in the case of an Atrix stockholder who (i) is or will be a “five percent transferee shareholder,” within the meaning of Treasury Regulation Section 1.367(a)-3(c)(5)(ii), and (ii) does not enter into a gain recognition agreement in the form provided in Treasury Regulation Section 1.367(a)-8). Assuming that the transaction so qualifies, then, in general, an Atrix stockholder:

•	will recognize gain (but not loss) with respect to its Atrix capital stock in an amount equal to the lesser of (i) any gain realized with respect to such shares or (ii) the amount of cash received with respect to such shares (other than any cash received in lieu of a fractional QLT common share); and
•	will recognize gain (or loss) to the extent any cash received in lieu of a fractional QLT common share exceeds (or is less than) the basis of such fractional share.

	In general, the conversion of Atrix capital stock into the right to receive QLT common shares and cash will not give rise to Canadian federal income tax for holders of Atrix capital stock.
	Tax matters are very complicated, and the tax consequences of the transaction to an Atrix stockholder will depend on the facts of each stockholder’s own situation. We encourage each Atrix stockholder to read carefully the discussion in the section entitled “The Merger — Material U.S. Federal Income Tax Consequences,” beginning on page 81 and “The Merger — Material Canadian Federal Income Tax Consequences,” beginning on page 85 and to consult the stockholder’s own tax advisor for a full understanding of the tax consequences of the transaction.

A:	No. After the merger is completed, you will receive written instructions from the exchange agent on how to exchange your Atrix stock certificates for QLT share certificates and cash. Please do not send in your Atrix stock certificates with your proxy.

A:	You may contact Investor Relations at Atrix at (970) 482-5868 or by email at ir@atrixlabs.com. You may also contact Atrix’s proxy solicitor, Morrow & Co., Inc., toll-free at 1-800-607-0088 or by email at Atrix.info@morrowco.com.

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SUMMARY

      The following is a summary of information contained in this joint proxy statement/prospectus. This summary may not contain all of the information about the transaction that is important to you. For a more complete description of the transaction, we encourage you to read carefully this entire document, including the attached annexes. In addition, we encourage you to read the information incorporated by reference into this joint proxy statement/prospectus, which includes important business and financial information about QLT and Atrix. You may obtain the information incorporated by reference into this joint proxy statement/prospectus without charge by following the instructions in the section entitled “Where You Can Find More Information.”

      Unless otherwise indicated, all dollar amounts in this joint proxy statement/prospectus are expressed in U.S. dollars.

The Companies

QLT Inc.

      QLT is a global bio-pharmaceutical company dedicated to the discovery, development and commercialization of innovative therapies to treat eye diseases, cancer, dermatological and urological conditions. The company is a pioneer in the field of photodynamic therapy, or PDT, a minimally invasive medical procedure utilizing photosensitizers (light-activated drugs) to treat a range of diseases associated with rapidly growing tissues.

      Aspen Acquisition Corp. is a wholly owned subsidiary of QLT that was formed solely for the purpose of effecting the merger.

      Aspen Acquisition II Corp. is a wholly owned subsidiary of QLT that was formed solely for the purpose of effecting the second merger.

Atrix Laboratories, Inc.

      Atrix is a bio-pharmaceutical company focused on advanced drug delivery. With unique patented drug delivery technologies, Atrix is currently developing a diverse portfolio of products, including proprietary oncology and dermatology products. Atrix also forms strategic alliances with a variety of pharmaceutical and biotechnology companies to develop products utilizing Atrix’s various drug delivery systems and/or to commercialize its products. These strategic alliances include collaborative arrangements with Sanofi-Synthelabo, Inc., Fujisawa Healthcare, Inc., Sandoz Inc., Pfizer Inc., Aventis, Sosei Co. Ltd., MediGene AG and Yamanouchi.

The Merger (see page 54)

      QLT and Atrix have agreed to the merger of Atrix and QLT under the terms of the merger agreement that is described in this joint proxy statement/prospectus. We have attached the merger agreement as Annex A and encourage you to read it in its entirety.

      Under the terms of the merger agreement, Aspen Acquisition Corp., a wholly owned subsidiary of QLT, will merge with and into Atrix, following which Atrix will merge with and into Aspen Acquisition II Corp., another wholly owned subsidiary of QLT. If you are an Atrix stockholder, upon completion of the merger each of your shares of Atrix common stock will be converted into the right to receive one QLT common share and $14.61 in cash (subject to possible adjustment to preserve the expected U.S. federal income tax treatment of the transaction) and your shares of Atrix preferred stock will be converted into the right to receive that number of QLT common shares and that amount of cash that you would have been entitled to receive if you had converted your preferred stock into common stock immediately prior to the merger. We refer to the shares and cash to be paid to the holders of Atrix capital stock by QLT as the merger consideration. QLT shareholders will continue to own their existing shares, which shares will not be affected by the merger. Based on the $21.28 closing price of QLT common shares on the last trading day prior to announcement of the merger, the merger consideration represents an implied value for one share of Atrix common stock of $35.89. This implied value represents a premium of $7.87 per share, or 28.1%, over the

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Recommendations of Boards of Directors (see pages 46 and 50)

QLT

      The QLT board of directors believes that the merger is in the best interests of QLT and its shareholders, and unanimously recommends that the QLT shareholders vote “FOR” approval of the issuance of QLT common shares pursuant to the merger agreement.

Atrix

      The Atrix board of directors believes that the merger agreement and the transactions contemplated by the merger agreement, including the merger, are advisable and in the best interests of Atrix and its stockholders, and recommends that the holders of Atrix common stock vote “FOR” adoption of the merger agreement and approval of the merger.

Shareholders and Stockholders Entitled to Vote; Vote Required (see pages 46 and 50)

QLT Shareholders

      You can vote at the QLT special meeting if you owned QLT common shares at the close of business on October 6, 2004, the record date for the QLT special meeting. On that date, there were 69,599,190 QLT common shares outstanding and entitled to vote. On a show of hands, you have one vote and on a poll, you can cast one vote for each QLT common share that you owned on that date. Approval of the issuance of QLT common shares pursuant to the merger agreement requires the affirmative vote of the holders of a majority of the QLT common shares present or represented by proxy and voting at the QLT special meeting.

Atrix Stockholders

      You can vote at the Atrix special meeting if you owned Atrix common stock at the close of business on October 6, 2004, the record date for the Atrix special meeting. On that date, there were 21,347,958 shares of Atrix common stock outstanding and entitled to vote. You can cast one vote for each share of Atrix common stock that you owned on that date. Adoption of the merger agreement and approval of the merger requires the affirmative vote of the holders of a majority of the outstanding shares of Atrix common stock entitled to vote at the Atrix special meeting.

Opinions of Financial Advisors (see pages 64 and 72)

QLT

      Merrill Lynch, Pierce, Fenner & Smith Incorporated, QLT’s exclusive financial advisor for the merger, has rendered a written opinion, dated June 14, 2004, to the QLT board of directors as to the fairness, from a financial point of view, to QLT of the merger consideration to be paid in the merger. The full text of the written opinion of Merrill Lynch is attached to this joint proxy statement/prospectus as Annex C. We encourage you to read the opinion carefully in its entirety to understand the procedures followed, assumptions made, matters considered and limitations on the review undertaken by Merrill Lynch in providing its opinion. The opinion of Merrill Lynch was delivered to the QLT board of directors for its information and does not constitute a recommendation to any shareholder with respect to any matter relating to the merger. Pursuant to the terms of Merrill Lynch’s engagement, QLT has agreed to pay Merrill Lynch an aggregate fee of $4.25 million, of which $3.5 million is contingent upon the consummation of the merger.

Atrix

      Banc of America Securities LLC, financial advisor to Atrix, delivered to the Atrix board of directors a written opinion dated June 14, 2004, that, as of that date, and based upon and subject to the various assumptions and limitations set forth in the opinion, the merger consideration to be received by the holders of Atrix common stock in the proposed merger was fair from a financial point of view to these holders. The full text of Banc of America’s written opinion is attached to this joint proxy statement/prospectus as Annex B. We encourage you to read this opinion carefully in its entirety for a description of the procedures followed, assumptions made, matters considered and limitations on the review undertaken. Banc of America Securities’ opinion was delivered to the Atrix board of directors for its information and does not constitute a recommendation to any

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Source and Amount of Funds

      Based on the number of shares of Atrix capital stock outstanding on September 30, 2004 (excluding shares issuable upon exercise of outstanding Atrix options, but including shares issuable upon exercise of the outstanding Atrix warrant), QLT expects to pay approximately $338 million in cash to holders of Atrix capital stock in the merger. This payment will come from QLT’s existing working capital.

Ownership of QLT after the Merger

      Based on the number of shares of Atrix capital stock outstanding on September 30, 2004 (excluding shares issuable upon exercise of outstanding Atrix options, but including shares issuable upon exercise of the outstanding Atrix warrant), QLT expects to issue approximately 23.2 million QLT common shares in the merger. Based on this number and the number of QLT common shares outstanding on September 30, 2004, after completion of the merger, former Atrix stockholders will own approximately 25.0% of the then outstanding QLT common shares. If we also assume that all of the 3.0% Convertible Senior Notes due 2023 were converted to QLT common shares, the former holders of Atrix capital stock, in the aggregate, would own approximately 22.6% of the then outstanding QLT common shares.

Share Ownership of Directors and Executive Officers of QLT and Atrix

      At the close of business on the record date for the QLT special meeting, directors and executive officers of QLT and their affiliates beneficially owned and were entitled to vote approximately 524,380 QLT common shares, collectively representing approximately 0.75% of the 69,599,190 QLT common shares outstanding on that date.

      At the close of business on the record date for the Atrix special meeting, directors and executive officers of Atrix and their affiliates beneficially owned and were entitled to vote approximately 314,624 shares of Atrix common stock, collectively representing approximately 1.47% percent of the 21,347,958 shares of Atrix common stock outstanding on that date.

Interests of Certain Persons in the Merger (see page 88)

      When considering the Atrix board of directors’ recommendation that the Atrix stockholders vote in favor of the adoption of the merger agreement and approval of the merger, Atrix stockholders should be aware that some directors and executive officers of Atrix may have interests in the merger that may be different from, or in addition to, the interests of Atrix stockholders.

      The Atrix board of directors knew about these additional interests, and considered them, among other matters, when it approved the merger agreement and the merger.

Listing of QLT Common Shares and Delisting of Atrix Common Stock (see pages 87 and 88)

      QLT will apply to have the QLT common shares issued in the merger approved for listing on the NASDAQ National Market, where QLT common shares currently are traded under the symbol “QLTI,” and QLT has been granted conditional approval to have the shares listed on the Toronto Stock Exchange, where QLT common shares currently are listed under the symbol “QLT.” If the merger is completed, Atrix common stock will no longer be listed on the NASDAQ National Market and will be deregistered under the Securities Exchange Act of 1934, which we refer to as the Exchange Act, and Atrix will no longer file periodic reports with the SEC.

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Dissent and Appraisal Rights (see page 144)

QLT

      Under applicable British Columbia law, QLT shareholders will not have dissent rights in connection with the issuance of QLT common shares pursuant to the merger agreement.

Atrix

      Holders of Atrix capital stock who do not wish to accept the consideration payable pursuant to the merger may seek, under Section 262 of the General Corporation Law of the State of Delaware, judicial appraisal of the fair value of their shares by the Delaware Court of Chancery. This value could be more or less than or the same as the merger consideration for the Atrix capital stock. This right to appraisal is subject to a number of restrictions and technical requirements, as described in the section entitled “Dissent and Appraisal Rights” on page 144 of this joint proxy statement/prospectus.

      Merely voting against the merger will not preserve your right to appraisal under Delaware law. Also, because a submitted proxy not marked “against” or “abstain” will be voted “FOR” the proposal to adopt the merger agreement and approve the merger, the submission of a proxy not marked “against” or “abstain” will result in the waiver of appraisal rights. Atrix stockholders who hold shares in the name of a broker or other nominee, must instruct their nominee to take the steps necessary to enable them to demand appraisal for their shares. If you or your nominee fails to follow all of the steps required by Section 262, you will lose your right of appraisal.

      Annex D to this joint proxy statement/ prospectus contains the full text of Section 262, which relates to the right of appraisal. We encourage you to read these provisions carefully and in their entirety.

Conditions to Completion of the Merger (see page 93)

      Completion of the merger depends on a number of conditions being met (which are further described on pages 93 to 95), including:

	•	receipt of the required approvals from QLT shareholders and Atrix stockholders;
	•	absence of breaches of the representations and warranties in the merger agreement which result in a material adverse effect on the representing party;
	•	material performance of each party’s obligations under the merger agreement;
	•	receipt of opinions by QLT and Atrix from their respective tax counsel that the merger will qualify as a reorganization under the Code;
	•	approval for listing of the QLT common shares to be issued in the merger on the NASDAQ National Market and the Toronto Stock Exchange; and
	•	absence of any law prohibiting the merger and of certain types of governmental orders or proceedings.

      Where legally permissible, a party may elect to waive a condition to its obligation to complete the merger even though that condition has not been satisfied. However, the tax opinion condition cannot be waived without the receipt of further QLT shareholder and Atrix stockholder approval.

No Solicitation by Atrix (see page 100)

      The merger agreement contains restrictions on the ability of Atrix to solicit, knowingly facilitate or engage in discussions or negotiations with a third party with respect to a proposal to acquire a significant interest in Atrix. Notwithstanding these restrictions, the merger agreement provides that under specified circumstances, if Atrix receives an acquisition proposal from a third party that is superior to the merger or that the Atrix board of directors reasonably believes could lead to a superior proposal, Atrix may furnish nonpublic information to that third party and engage in negotiations with it. Even if Atrix receives a proposal from a third party that is superior to the merger, QLT may require Atrix to hold the Atrix special meeting to consider the merger.

Termination of the Merger Agreement (see page 105)

      QLT and Atrix, by action of their respective boards of directors, may mutually agree to terminate the merger agreement and abandon the merger at any time prior to completion of the

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	•	the merger is not completed by December 15, 2004 (which may be extended to February 15, 2005 under some circumstances);
	•	a court or governmental authority permanently prohibits completion of the merger;
	•	the required approval of QLT shareholders or Atrix stockholders is not obtained at the applicable special meeting;
	•	the board of directors of the other party withdraws or adversely modifies its recommendation described in this joint proxy statement/prospectus (QLT may also terminate if the Atrix board of directors recommends another acquisition proposal); or
	•	the other party breaches its representations, warranties, covenants or agreements in the merger agreement, which results in an uncurable failure of one of the conditions to completion of the merger being satisfied.

Termination Fee and Expenses (see pages 106 and 107)

      The merger agreement provides that Atrix may be required to pay QLT a termination fee of $25 million in a number of circumstances, including termination by QLT following the Atrix board of directors’ withdrawal or adverse modification of its recommendation of the merger, or in certain circumstances where Atrix is acquired by another company or enters into an agreement to be acquired by another company. The merger agreement also provides that a party may be obligated to reimburse up to $2 million of the other party’s expenses in a number of circumstances.

Atrix Stock Options and Employee Stock Purchase Plan (see pages 103 and 104)

      Upon completion of the merger, options to purchase shares of Atrix common stock will be assumed by QLT and become options to purchase QLT common shares. The exchange ratios and exercise prices will be determined pursuant to the merger agreement. In general, each option that is outstanding immediately prior to the merger will be amended so that immediately before the merger is completed it vests and becomes fully exercisable. It is expected that immediately following completion of the merger, Atrix’s nonqualified stock options will be amended so that they are exercisable for a period of one year (or, if earlier, until expiration of the Atrix option’s term) following the date of termination of the option holder’s position with Atrix, if the option holder is terminated within 12 months after the merger (other than in the case of termination of employees and consultants for cause). QLT will assume the Atrix stock option plans at the effective time of the merger so that the option pool currently available for grants under the plans may be used by QLT for future option grants to Atrix employees after the merger. Atrix has agreed to stop issuing shares under its employee stock purchase plan.

Atrix Warrant (see page 92)

      There is currently outstanding a warrant to purchase one million shares of Atrix common stock. If this warrant is still outstanding upon completion of the merger, it will be assumed by QLT in accordance with its terms.

Material U.S. Federal Income Tax Consequences of the Merger and of Owning and Disposing of QLT Common Shares (see pages 82 and 84)

      We expect the transaction to be treated as a reorganization for U.S. federal income tax purposes, and it is a condition to the completion of the merger that QLT receive an opinion from its counsel, Latham & Watkins LLP, and Atrix receive an opinion from its counsel, Morrison & Foerster LLP, to the effect that the transaction will so qualify and that Section 367(a)(1) of the Code will not apply to a holder’s surrender of Atrix capital stock pursuant to the transaction (except in the case of an Atrix stockholder who (i) is or will be a “five percent transferee shareholder,” within the meaning of Treasury Regulation Section 1.367(a)-3(c)(5)(ii), and (ii) does not enter into a gain recognition agreement in the form provided in Treasury Regulation Section 1.367(a)-8). If these opinions are not rendered, QLT and Atrix will not complete the merger unless further approval of the Atrix stockholders and the QLT shareholders is obtained with appropriate disclosure. Assuming that the

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	•	will recognize gain (but not loss) with respect to its Atrix capital stock in an amount equal to the lesser of (i) any gain realized with respect to such shares or (ii) the amount of cash received with respect to such shares (other than any cash received in lieu of a fractional QLT common share); and
	•	will recognize gain (or loss) to the extent any cash received in lieu of a fractional QLT common share exceeds (or is less than) the basis of such fractional share.

      No gain or loss will be recognized by QLT, Atrix or QLT shareholders as a result of the merger.

      Subject to certain rules, the gross amount of dividends paid to U.S. Holders (defined below in “The Merger — Material U.S. Federal Income Tax Consequences”) of QLT common shares (including amounts withheld to reflect Canadian withholding taxes) will be treated as dividend income to U.S. Holders, to the extent paid out of current or accumulated earnings and profits, as determined under U.S. federal income tax principles. This income will be includable in the gross income of a U.S. Holder on the day received by the U.S. Holder. These dividends will not be eligible for the dividends received deduction allowed to corporations under the Code. Subject to certain conditions and limitations, Canadian withholding taxes on dividends may be treated as foreign taxes eligible for credit against a U.S. Holder’s U.S. federal income tax liability.

      For U.S. federal income tax purposes, a U.S. Holder generally will recognize taxable gain or loss on any sale or exchange of QLT common shares in an amount equal to the difference between the amount realized for the QLT common shares and the U.S. Holder’s basis in the common shares. This gain or loss will be capital gain or loss to a U.S. Holder that holds QLT common shares as a capital asset and generally will be treated as U.S. source gain or loss. Capital gains of noncorporate U.S. Holders derived with respect to capital assets held for more than one year are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

      Tax matters are very complicated and the U.S. federal income tax consequences of the transaction and ownership and disposition of QLT common shares will depend on the facts of your own situation. For a more complete description of certain U.S. federal income tax consequences of the transaction and ownership and disposition of QLT common shares that will be acquired by Atrix stockholders upon completion of the merger, see “The Merger — Material U.S. Federal Income Tax Consequences” beginning on page 81. We encourage you to consult your own tax advisor for a full understanding of the U.S. federal income tax consequences of the transaction and ownership and disposition of QLT common shares.

Material Canadian Federal Income Tax Consequences (see page 85)

      The transaction will have no Canadian federal income tax consequences to QLT shareholders.

      The conversion of Atrix capital stock into the right to receive QLT common shares and cash pursuant to the merger will not, in general, give rise to Canadian tax for holders of Atrix capital stock who are not and who are not deemed to be resident in Canada. Dividends paid or credited to holders of QLT common shares who are not and who are not deemed to be resident in Canada are subject to a Canadian withholding tax of 25%. Under the Canada-United States Income Tax Convention (1980), the rate of that withholding tax is generally reduced to 15% for shareholders resident in the United States. Assuming that the QLT common shares are not “taxable Canadian property”, any capital gain realized on a disposition of those shares will not be subject to tax in Canada.

      Tax matters are very complicated and the Canadian federal income tax consequences of the merger and ownership and disposition of QLT common shares will depend on the facts of your own situation. For the opinion of Farris, Vaughan, Wills & Murphy, counsel to QLT, as to the material Canadian federal income tax consequences of the merger and ownership and disposition of QLT common shares that will be acquired by Atrix stockholders upon completion of the merger, see “The Merger — Material Canadian Federal Income Tax Consequences” beginning on page 85. We encourage you to consult your own

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Comparison of Rights of Atrix Stockholders and QLT Shareholders (see page 123)

      The conversion of Atrix capital stock into the right to receive QLT common shares (in addition to cash) in the merger will result in a difference between the rights of Atrix stockholders, which are governed by the General Corporation Law of the State of Delaware and the Atrix certificate of incorporation and bylaws, and their rights as QLT shareholders, which will be governed by the Business Corporations Act (British Columbia) and the QLT notice of articles and articles.

Accounting Treatment (see page 87)

      QLT will account for the merger under the purchase method of accounting for business combinations under United States generally accepted accounting principles, which we refer to as U.S. GAAP, and Canadian generally accepted accounting principles, which we refer to as Canadian GAAP.

Regulatory Matters Related to the Merger (see page 81)

      The merger is subject to discretionary review by the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission to determine whether it is in compliance with applicable antitrust laws. The Hart-Scott-Rodino Antitrust Improvements Act of 1976 prohibits us from completing the merger until we have furnished certain information and materials to the Antitrust Division of the Department of Justice and the Federal Trade Commission, and the required waiting period has ended. Both Atrix and QLT filed the required notification and report forms on June 24, 2004. The waiting period was to expire at 11:59 p.m. on July 26, 2004, unless extended by a request for more information or shortened by an early termination notice. We received an early termination notice on July 13, 2004, effective immediately.

      We also may be required to obtain additional regulatory approvals from various state and foreign authorities. While we expect to obtain all required regulatory approvals, we cannot assure you that these regulatory approvals will be obtained or that the granting of these regulatory approvals will not involve the imposition of conditions on completion of the merger or require changes to the terms of the merger that would have a materially adverse effect on the combined company. These conditions or changes could result in the conditions to the merger not being satisfied.

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Summary Selected Historical Financial Data of QLT

      The tables below present selected historical consolidated financial data of QLT prepared in accordance with U.S. GAAP. You should read the information set forth below in conjunction with the audited consolidated financial statements (including the notes thereto) and management’s discussion and analysis of the financial condition and results of operations in QLT’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, which are incorporated by reference into this joint proxy statement/prospectus. Please refer to the section of this joint proxy statement/prospectus entitled “Where You Can Find More Information” beginning on page 148.

      The selected historical consolidated statements of operations for the fiscal years ended December 31, 2003, 2002 and 2001 and the selected historical consolidated balance sheet data as of December 31, 2003 and 2002 are derived from the audited consolidated financial statements of QLT and the related notes thereto that are incorporated by reference into this joint proxy statement/ prospectus. The unaudited selected historical consolidated statement of operations data for the six months ended June 30, 2004 and 2003 and the unaudited selected historical consolidated balance sheet data as of June 30, 2004 are derived from the unaudited consolidated financial statements of QLT and related notes thereto that are incorporated by reference into this joint proxy statement/prospectus. The selected historical consolidated statement of operations data for the fiscal years ended December 31, 2000 and 1999 and the selected historical consolidated balance sheet data as of December 31, 2001, 2000 and 1999 are derived from audited consolidated financial statements that are not included, or incorporated by reference in, this joint proxy statement/prospectus.

      The statement of operations information for the six months ended June 30, 2004 and 2003 and the balance sheet information as of June 30, 2004 are unaudited but include, in the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair presentation of such information. Results for the six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for any other interim periods or for the year as a whole.

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Summary Selected Historical Financial Data of Atrix

      The tables below present selected historical consolidated financial data of Atrix prepared in accordance with U.S. GAAP. You should read the information set forth below in conjunction with the audited consolidated financial statements (including the notes thereto) and management’s discussion and analysis of the financial condition and results of operations in Atrix’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2004, which are incorporated by reference into this joint proxy statement/prospectus. Please refer to the section of this joint proxy statement/prospectus entitled “Where You Can Find More Information” beginning on page 148.

      The selected historical consolidated statements of operations for the fiscal years ended December 31, 2003, 2002 and 2001 and the selected historical consolidated balance sheet data as of December 31, 2003 and 2002 are derived from the audited consolidated financial statements of Atrix and the related notes thereto that are incorporated by reference into this joint proxy statement/ prospectus. The unaudited selected historical consolidated statement of operations data for the six months ended June 30, 2004 and 2003 and the unaudited selected historical consolidated balance sheet data as of June 30, 2004 are derived from the unaudited consolidated financial statements of Atrix and related notes thereto that are incorporated by reference into this joint proxy statement/ prospectus. The selected historical consolidated statement of operations data for the fiscal years ended December 31, 2000 and 1999 and the selected historical consolidated balance sheet data as of December 31, 2001, 2000 and 1999 are derived from audited consolidated financial statements that are not included, or incorporated by reference in, this joint proxy statement/ prospectus.

      The statement of operations information for the six months ended June 30, 2004 and 2003 and the balance sheet information as of June 30, 2004 are unaudited but include, in the opinion of management, all adjustments, including normal recurring adjustments, necessary for a fair presentation of such information. Results for the six months ended June 30, 2004 are not necessarily indicative of the results that may be expected for any other interim periods or for the year as a whole.

      As of the date of this joint proxy statement/prospectus, Atrix has not declared or paid cash dividends to its stockholders and does not intend to do so in the foreseeable future.

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Notes:

(1)	Atrix adopted SFAS No. 145 in the first quarter of 2003 and as a result, the comparative financial statements were restated to reclassify the extraordinary loss on extinguishment of debt to be included in loss from operations.
(2)	In 2000, Atrix changed the accounting method for licensing, marketing rights and milestone revenue to conform to Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements.”

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(3)	Atrix adopted Emerging Issues Task Force (EITF) Issue No. 03-6, Participating Securities and the Two-Class Method under FASB Statement No. 128, “Earnings Per Share” in the second quarter of 2004 (EITF 03-6). EITF 03-6 provides guidance for the computation of earnings per share using the two-class method for enterprises with participating securities or multiple classes of common stock as required by SFAS No. 128. The two-class method allocates undistributed earnings to each class of common stock and participating securities for the purpose of computing basic earnings per share. The adoption of EITF 03-6 reduced basic earnings per share for the six-month period ended June 30, 2004 by $0.01. The adoption of EITF 03-6 had no impact on the three-month period ended June 30, 2004 and pre-2004 earnings per share.
(4)	Working capital is computed as current assets less current liabilities.
(5)	Included in long-term obligations, $28.2 million as of June 30, 2004, are non-current amounts of deferred revenue which are not subject to future repayment.
(6)	Atrix’s Series A Convertible Exchangeable Preferred Stock, or the preferred stock, which was issued in connection with the formation of Atrix’s joint venture with Elan International Services, Ltd., had an exchange feature that allowed the holder to convert it into an additional holding in Transmucosal Technologies Ltd., a subsidiary of Atrix, which had a redemption feature that was outside of Atrix’s control. As a result, Atrix’s preferred stock was presented outside of permanent shareholders’ equity prior to the year ended December 31, 2003. Atrix terminated its joint venture with Elan in September 2003. In connection with the termination, Elan and its affiliates agreed to forego the exchange right included in the preferred stock. Accordingly, as of September 30, 2003, Atrix reclassified the preferred stock to permanent equity.

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Summary Unaudited Pro Forma Condensed Consolidated Financial Data

      The table below presents selected financial data from the QLT and Atrix unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2003 and six month period ended June 30, 2004 and from the unaudited pro forma condensed consolidated balance sheet as of June 30, 2004 included in this joint proxy statement/prospectus, all as prepared in accordance with U.S. GAAP. The unaudited pro forma condensed consolidated statement of operations is presented as if the merger had occurred on January 1, 2003. The unaudited pro forma condensed consolidated balance sheet presents the consolidated financial position of QLT and Atrix as of June 30, 2004, giving effect to the acquisition as if it occurred on June 30, 2004. The unaudited pro forma condensed consolidated financial data are based on the estimates and assumptions set forth in the notes to such statements, which are provided for information purposes only, are preliminary and are subject to change. The unaudited pro forma condensed consolidated financial data are not necessarily indicative of the financial position or operating results that would have been achieved had the merger been consummated as of the dates indicated, nor are they necessarily indicative of future financial position or operating results. This information should be read in conjunction with the unaudited pro forma condensed consolidated financial statements and related notes and the historical financial statements and related notes of QLT and Atrix included in or incorporated by reference into this joint proxy statement/prospectus.