Exhibit 2.1

                                                              WARRANT NO. ______

THIS WARRANT AND THE SECURITIES  REPRESENTED  HEREBY OR ACQUIRABLE UPON EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES  SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES  ACT"). THIS WARRANT AND ANY SECURITIES  ACQUIRED BY
THE HOLDER  UPON THE  EXERCISE  HEREOF,  MAY NOT BE OFFERED,  SOLD OR  OTHERWISE
TRANSFERRED  EXCEPT  (A) TO THE  COMPANY;  (B)  OUTSIDE  THE  UNITED  STATES  IN
COMPLIANCE  WITH RULE 904 OF REGULATION S UNDER THE SECURITIES  ACT, FOR SO LONG
AS THE COMPANY  REMAINS A "FOREIGN  ISSUER" AS DEFINED IN SUCH  REGULATION S; OR
(C) INSIDE THE UNITED  STATES  UNDER AN EFFECTIVE  REGISTRATION  STATEMENT OR IN
COMPLIANCE  WITH (1) RULE 144A UNDER THE SECURITIES  ACT, (2) RULE 144 UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAW OR (3) ANY
OTHER EXEMPTION, EVIDENCED BY AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
COMPANY OR THE TRANSFER  AGENT,  AS APPLICABLE,  AVAILABLE  UNDER THE SECURITIES
ACT.

FOR SO  LONG AS THE  COMPANY  REMAINS  A  "FOREIGN  ISSUER"  AS  DEFINED  IN SEC
REGULATION  S, A NEW  CERTIFICATE  BEARING  NO  LEGEND,  DELIVERY  OF WHICH WILL
CONSTITUTE  "GOOD  DELIVERY,"  MAY BE OBTAINED  FROM THE COMPANY OR ITS TRANSFER
AGENT FOR THESE SECURITIES UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION,  IN A FORM  SATISFACTORY TO THE TRANSFER AGENT AND THE COMPANY,  TO
THE EFFECT THAT THE SALE OF THE SECURITIES  REPRESENTED  HEREBY IS BEING MADE IN
COMPLIANCE WITH RULE 904 OF SEC REGULATION S UNDER THE SECURITIES ACT.

                          COMMON SHARE PURCHASE WARRANT

                      To Purchase [NUMBER] Common Shares of

                               YM BIOSCIENCES INC.

                  THIS IS TO CERTIFY THAT  [NAME],  or  registered  assigns (the
"Holder"), is entitled, at any time prior to the Expiration Date (as hereinafter
defined),  to purchase from YM BioSciences Inc. a company continued and existing
under  the  laws  of  Nova  Scotia  (the  "Company"),  the  Warrant  Shares  (as
hereinafter  defined and subject to adjustment as provided herein),  in whole or
in part, at a purchase  price of Cdn.$2.50  per share  (subject to adjustment as
provided herein), all on and subject to the terms and conditions hereinafter set
forth.

                  1. DEFINITIONS.  As used in this Warrant,  the following terms
have the respective meanings set forth below:

                  "Affiliate"  means  any  person or entity  that,  directly  or
indirectly through one or more  intermediaries,  controls or is controlled by or
is under common  control with a person or entity,  as such terms are used in and
construed  under Rule 144 under the Securities  Act. With respect to a Holder of
Warrants,  any  investment  fund  or  managed  account  that  is  managed  on  a
discretionary basis by the same investment manager as such holder will be deemed
to be an Affiliate of such Holder.





                  "Appraised Value" means, in respect of any Common Share on any
date herein specified,  the fair saleable value of such Common Share (determined
without  giving  effect to the discount for (i) a minority  interest or (ii) any
lack of  liquidity  of the Common Share or to the fact that the Company may have
no class of equity  registered under the Exchange Act) as of the last day of the
most recent month ending prior to such date specified, based on the value of the
Company,  as determined by a nationally  recognized U.S. investment banking firm
selected by the Company's  Board of Directors  and having no prior  relationship
with the Company.

                  "Automatic  Issue  Date" has the  meaning set forth in Section
3.2(b).

                  "Business  Day" means any day that is not a Saturday or Sunday
or a day on which banks are  required or  permitted to be closed in the State of
New York or the City of Toronto, Ontario.

                  "Cashless  Exercise  Shares"  has the  meaning  set  forth  in
Section 2.1(b).

                  "Change of Control" means the (i) acquisition by an individual
or legal entity or group (as defined in Section  13(d) of the  Exchange  Act) of
more than one-half of the voting rights or equity interests in the Company; (ii)
sale,  conveyance,  or  other  disposition  of all or  substantially  all of the
assets,  property  or  business  of the  Company,  or (iii) the  merger  into or
consolidation  with any other corporation  (other than a wholly owned subsidiary
corporation)   or   effectuation   of  any  transaction  or  series  of  related
transactions  where holders of the  Company's  voting  securities  prior to such
transaction or series of  transactions  fail to continue to hold at least 50% of
the voting power of the Company.

                  "Closing Date" means December 15, 2003.

                  "Common  Shares"  means  (except  where the context  otherwise
indicates) the voting common shares in the capital of the Company as constituted
on the Closing Date, and any shares into which such Common Shares may thereafter
be changed or converted, and shall also include (i) shares of the Company of any
other  class  (regardless  of how  denominated)  issued to the holders of Common
Shares  upon any  reclassification  thereof  which is also not  preferred  as to
dividends or assets on liquidation over any other class of shares of the Company
and which is not subject to  redemption  and (ii) common shares of any successor
or acquiring  corporation  received by or  distributed  to the holders of Common
Shares of the Company in the circumstances contemplated by Section 4.3.

                  "Current  Market Price" means,  in respect of any Common Share
on any date herein specified,

                  (i)      if there  shall not then be a public  market  for the
                           Common  Shares,  the higher of (a) the book value per
                           Common Share on such date and (b) the Appraised Value
                           per Common Share at such date, or

                  (ii)     if there shall then be a public market for the Common
                           Shares,  the  higher of (a) the book value per Common
                           Share on such date, and (b) the average of the daily


                                                                               2



                           market  prices  for  20   consecutive   Trading  Days
                           immediately  preceding  such date.  The daily  market
                           price for each such Trading Day shall be (A) the last
                           sale price on such day on the Toronto Stock  Exchange
                           or such  other  stock  exchange  as shall then be the
                           principal stock exchange  (including Nasdaq) on which
                           such  Common  Shares are then  listed or  admitted to
                           trading,  (B) if no sale  takes  place on such day on
                           any such  exchange,  the average of the last reported
                           closing   bid  and  asked   prices  on  such  day  as
                           officially  quoted  on any such  exchange  (including
                           Nasdaq),  or (C) if the  Common  Shares  are not then
                           listed or admitted to trading on any stock  exchange,
                           the  average  of the last  reported  closing  bid and
                           asked  prices  on  such  day in the  over-the-counter
                           market.

                  "Current Warrant Price" means, in respect of a Common Share at
any date herein  specified,  the price at which a Common  Share may be purchased
pursuant  to this  Warrant  on such date.  Until the  Current  Warrant  Price is
adjusted  pursuant to the terms herein,  the initial Current Warrant Price shall
be Cdn.$2.50 per share.

                  "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended, or any successor statute,  and the rules and regulations of
the SEC thereunder, all as the same shall be in effect from time to time.

                  "Exchange  Rate" on any given  date in respect of an amount to
be converted  from Canadian  Dollars into U.S.  Dollars means the amount of U.S.
Dollars that can be purchased with one Canadian  Dollar based on the noon buying
rate  published by, or displayed on the website of, the Federal  Reserve Bank of
New York in respect of such currencies on the Business Day immediately preceding
such date,  and in respect of an amount to be converted  from U.S.  Dollars into
Canadian Dollars means the inverse of such rate.

                  "Exercise  Period" means  the period during which this Warrant
is exercisable  pursuant to Section 2.1.

                  "Expiration Date" means December 15, 2008.

                  "Issue  Date" means the date on which this  Warrant was issued
upon exercise of special warrants issued by the Company on the Closing Date.

                  "Other Property" has the meaning set forth in Section 4.3.

                  "SEC" means the  Securities  and  Exchange  Commission  or any
other United States  federal  agency then  administering  the Securities Act and
other United States federal securities laws.

                  "Securities  Act" means the United  States  Securities  Act of
1933, as amended, or any successor statute, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the time.


                                                                               3



                  "Trading  Day"  means any day on which the  primary  market on
which Common Shares are listed is open for trading.

                  "Warrants"  means this  Warrant and all  warrants  issued upon
transfer,  division or combination of, or in substitution for, any thereof.  All
Warrants  shall at all times be identical as to terms and  conditions  and date,
except as to the number of Common Shares for which they may be exercised.

                  "Warrant  Price"  means an amount  equal to (i) the  number of
Common Shares being purchased upon exercise of this Warrant  pursuant to Section
2.1, multiplied by (ii) the Current Warrant Price.

                  "Warrant  Shares" means any one or more of the [NUMBER] Common
Shares to be purchased upon the exercise hereof (including  cashless exercise as
contemplated in Section 2.1(b)), subject to adjustment as provided herein.

                  2. EXERCISE OR CASHLESS EXERCISE OF WARRANT.

                  2.1. Manner of Exercise or Cashless  Exercise of Warrant.  (a)
From and  after the Issue  Date,  and until  5:00  P.M.,  Toronto  time,  on the
Expiration Date (the "Exercise  Period"),  the Holder may exercise this Warrant,
on any  Business  Day,  for all or any  part of the  number  of  Warrant  Shares
purchasable  hereunder.  Payment  of the  Warrant  Price upon  exercise  of this
Warrant as aforesaid may be made (in Canadian or U.S.  dollars) at the option of
the Holder by: (i)  certified or official bank check payable to the order of the
Company or (ii) wire transfer or electronic funds transfer to the account of the
Company.  If this Warrant shall have been  exercised in part, the Company shall,
at the time of delivery of the certificate or certificates  representing Warrant
Shares,  deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased Common Shares called for by this Warrant,  which new
Warrant shall in all other  respects be identical  with this Warrant,  or at the
request of the Holder,  appropriate notation may be made on this Warrant and the
same returned to the Holder.

                       (b) (i) The Holder shall have the right to exercise these
Warrants on a cashless  basis, in whole or in part, at any time and from time to
time during the Exercise  Period to acquire  Common Shares  ("Cashless  Exercise
Shares").  Upon exercise of this cashless  exercise  right,  the Holder shall be
entitled  to  receive  that  number of  Cashless  Exercise  Shares  equal to the
quotient obtained by dividing [(A - B) (X)] by A, where:

         A   =    the  Current  Market Price  of one Common Share on the date of
                  exercise of these Warrants (such date being the date set forth
                  on  the  notice  of  exercise  provided  pursuant  to  Section
                  2.1(c));

         B   =    the Current Warrant Price; and

         X   =    the  number of  Common  Shares as to  which these Warrants are
                  being exercised by way of cashless exercise.

                                                                               4




If the above  calculation  results in a negative  number,  no Cashless  Exercise
Shares shall be issued or issuable upon cashless exercise of these Warrants.

                                    (ii) Upon cashless exercise of these
Warrants in accordance with this paragraph 2.1(b),  the Holder shall be entitled
to receive a certificate  representing  the number of Cashless  Exercise  Shares
determined in accordance with subparagraph (b)(i), and a new Warrant certificate
in  substantially  identical  form  to this  Certificate  and  dated  as of such
cashless exercise  evidencing the right to purchase that number of Common Shares
equal to the  difference,  if any,  between the number of Common Shares  subject
hereto prior to such  cashless  exercise,  and the number of Common Shares as to
which these Warrants were so exercised by way of cashless  exercise (such number
being "X", as defined in subparagraph (b)(i), above).

                       (c) In order to  exercise  this  Warrant,  in whole or in
part, the Holder shall deliver to the Company at its principal  office or at the
office or agency designated by the Company pursuant to Section 10, (i) a written
notice  of  Holder's  election  to  exercise  (for  cash  or by way of  cashless
exercise) this Warrant,  which notice shall specify the number of Warrant Shares
to be purchased or with  respect to which this  Warrant is being  exercised,  as
applicable,  (ii)  payment  of the  Warrant  Price in respect  of  exercise,  as
provided herein,  and (iii) this Warrant.  Such notice shall be substantially in
the  form of the  subscription  form  appearing  at the end of this  Warrant  as
Exhibit A, duly executed by the Holder or its agent or attorney. In addition, if
the Holder is not the original  Holder of the Warrant,  the Holder shall provide
the  Company  with an opinion of counsel  or other  evidence  satisfying  to the
Company that the issuance of the Warrant Shares or Cashless  Exercise Shares (as
applicable)  upon  exercise  of the  Warrant  or  exempt  from the  registration
requirements of the Securities Act and applicable  state  securities  laws. Upon
receipt thereof, the Company shall, as promptly as reasonably  practicable,  and
in any event  within  five  Business  Days  thereafter,  execute  or cause to be
executed  and deliver or cause to be delivered  to the Holder a  certificate  or
certificates  representing  the aggregate  number of Warrant  Shares or Cashless
Exercise Shares  issuable upon such exercise,  together with cash in lieu of any
fraction  of  a  share,  as  hereinafter  provided.  The  share  certificate  or
certificates so delivered shall be, to the extent possible, in such denomination
or  denominations  as the  Holder  shall  request  in the  notice  and  shall be
registered  in the name of the Holder or such other name as shall be  designated
in the notice (subject to paragraph (f), below). This Warrant shall be deemed to
have been exercised,  and such  certificate or  certificates  shall be deemed to
have been issued,  and the Holder or any other person or entity so designated to
be named  therein  shall be  deemed  to have  become a Holder  of record of such
shares  for all  purposes,  as of the date when the  notice,  together  with the
payment of the Warrant Price upon exercise and this Warrant,  is received by the
Company as described above.

                       (d) All Common Shares  issuable upon the exercise of this
Warrant  pursuant to the terms hereof shall be validly  issued and, upon payment
of the Warrant  Price (in the case of exercise  pursuant to section  2.1(a)) and
upon  cashless  exercise (in the case of cashless  exercise  pursuant to section
2.1(b)),  shall  be  fully  paid  and  non-assessable  and  not  subject  to any
preemptive  rights.  The Company shall pay all expenses in connection  with, and
all transfer,  stamp or similar taxes and other governmental charges that may be
imposed with respect to, the issue or delivery thereof, provided,  however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance of any certificates

                                                                               5


for Warrant Shares or Cashless  Exercise Shares or Warrants in a name other than
the name of the Holder.

                       (e) Prior to the  exercise  of this  Warrant,  the Holder
shall not be entitled to any rights as a shareholder of the Company with respect
to the Warrant Shares,  including,  without  limitation,  the right to vote such
Warrant  Shares,  receive  dividends  or other  distributions  thereon  or to be
notified of shareholder meetings, except as set forth herein.

                       (f) If a notice of exercise  requests that Warrant Shares
be issued in the name of any person  other  than the  Holder,  the Holder  shall
provide,  at the request of the  Company,  such  information  as the Company may
reasonably require to establish that a trade of the Warrant Shares to such other
Person is permitted under applicable  securities laws, either (i) in the case of
a person in the United States,  under an effective  registration  statement with
respect to the Warrant Shares or an exemption from the registration requirements
with respect  thereto,  or (ii) in the case of a person in a Canadian  province,
under or as a result of a  prospectus  having been filed and a receipt  obtained
with respect to the distribution of the Warrants or the Warrant Shares, under an
exemption  from  the  applicable  prospectus  and  registration  rights  of such
province, or otherwise.

                  2.2.  Fractional  Shares. The Company shall not be required to
issue a fractional Common Share upon exercise of any Warrant. As to any fraction
of a share which the Holder of one or more Warrants,  the rights under which are
exercised in the same transaction,  would otherwise be entitled to purchase upon
such  exercise,  the  Company  shall pay an amount in cash equal to the  Current
Market  Price  per  Common  Share on the date of  exercise,  multiplied  by such
fraction.

                  2.3. Currency Conversion.  For the purposes of these Warrants,
if the Warrant Price,  the Current Market Price or any other amount hereunder is
required to be converted from U.S.  Dollars to Canadian Dollars or from Canadian
Dollars to U.S. Dollars,  such amount shall be converted based on the applicable
Exchange Rate.

                  2.4. Restrictions on Exercise Amount. Unless a Holder delivers
to the Company  irrevocable  written notice prior to the date of issuance hereof
or sixty-one  days prior to the effective  date of such notice that this Section
2.4 shall not  apply to such  Holder,  the  Holder  may not  acquire a number of
Warrant  Shares to the extent  that,  upon such  exercise,  the number of Common
Shares then  beneficially  owned by such holder and its Affiliates and any other
persons  or  entities  whose  beneficial  ownership  of Common  Shares  would be
aggregated  with the Holder's for purposes of Section  13(d) of the Exchange Act
(including  shares held by any "group" of which the holder is a member)  exceeds
4.95% of the total  number  of Common  Shares of the  Company  then  issued  and
outstanding  (such  limitation  being  herein  referred  to as  the  "Beneficial
Ownership  Cap").  For  purposes  hereof,  "group"  has the meaning set forth in
Section 13(d) of the Exchange Act and  applicable  regulations of the Securities
and  Exchange  Commission,  and the  percentage  held  by the  Holder  shall  be
determined in a manner  consistent  with the  provisions of Section 13(d) of the
Exchange Act. The Company shall have no  obligation  to verify  compliance  with
this Section 2.4,  other than to issue  Warrant  Shares in  accordance  with the
exercise notice of each Holder. It shall be the responsibility of each Holder to
determine such Holder's  compliance  with the Beneficial  Ownership Cap, and the

                                                                               6




Holder's exercise notice shall be deemed a representation of the Holder that the
number of Common Shares to be acquired pursuant to such exercise notice shall be
in compliance with the Beneficial Ownership Cap.

                  3. TRANSFER, DIVISION AND COMBINATION.

                  3.1.  Transfer.  The Warrants and the Warrant  Shares shall be
freely transferable,  subject to compliance with all applicable laws, including,
but not  limited  to the  Securities  Act  and  applicable  Canadian  provincial
securities laws. Transfer of this Warrant and all rights hereunder,  in whole or
in part,  shall be registered  on the books of the Company to be maintained  for
such  purpose,  upon  surrender of this Warrant at the  principal  office of the
Company  referred to in Section 12.2 or the office or agency  designated  by the
Company  pursuant  to Section 10,  together  with a written  assignment  of this
Warrant  substantially  in the form of  Exhibit B hereto  duly  executed  by the
Holder or its agent or attorney and funds  sufficient to pay any transfer  taxes
payable upon the making of such transfer.  Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination  specified in such
instrument  of  assignment,  and  shall  issue  to the  assignor  a new  Warrant
evidencing  the portion of this Warrant not so assigned,  and this Warrant shall
promptly  be  cancelled.  The  acceptance  of the new Warrant or Warrants by the
transferee  thereof shall be deemed the acceptance by such  transferee of all of
the rights and obligations of a holder of this Warrant. Notwithstanding anything
herein to the contrary, this Warrant may not be transferred or assigned in whole
or in part without  compliance with applicable federal and state securities laws
and applicable  Canadian provincial  securities laws.  Following a transfer that
complies with the requirements of this Section 3.1, the Warrant may be exercised
by a new Holder for the  purchase  of Common  Shares  regardless  of whether the
Company issued or registered a new Warrant on the books of the Company.

                  3.2. Restrictive Legends. (a) Unless the resale of the Warrant
Shares has been  registered  under the  Securities  Act,  each  certificate  for
Warrant  Shares  initially  issued upon the exercise of this  Warrant,  and each
certificate  for Warrant Shares issued to any subsequent  transferee of any such
certificate,   shall  be  stamped  or  otherwise  imprinted  with  a  legend  in
substantially the following form:

                  "THE SECURITIES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE UNITED STATES  SECURITIES ACT OF 1933, AS
                  AMENDED (THE  "SECURITIES  ACT").  THESE SECURITIES MAY NOT BE
                  OFFERED,  SOLD  OR  OTHERWISE  TRANSFERRED  EXCEPT  (A) TO THE
                  COMPANY; (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
                  904 OF REGULATION S UNDER THE  SECURITIES  ACT, FOR SO LONG AS
                  THE  COMPANY  REMAINS A  "FOREIGN  ISSUER"  AS DEFINED IN SUCH
                  REGULATION  S;  OR (C)  INSIDE  THE  UNITED  STATES  UNDER  AN
                  EFFECTIVE  REGISTRATION  STATEMENT OR IN  COMPLIANCE  WITH (1)
                  RULE  144A  UNDER  THE  SECURITIES  ACT (2) RULE 144 UNDER THE
                  SECURITIES  ACT  AND  IN  COMPLIANCE  WITH  APPLICABLE   STATE
                  SECURITIES  LAW OR (3) ANY OTHER  EXEMPTION,  EVIDENCED  BY AN
                  OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY OR THE
                  TRANSFER AGENT, AS APPLICABLE,  AVAILABLE UNDER THE SECURITIES
                  ACT.  DELIVERY OF THIS  CERTIFICATE  MAY NOT CONSTITUTE  "GOOD
                  DELIVERY" IN SETTLEMENT OF  TRANSACTIONS ON STOCK EXCHANGES IN
                  CANADA OR ELSEWHERE.


                                                                               7




                  FOR SO LONG AS THE  COMPANY  REMAINS  A  "FOREIGN  ISSUER"  AS
                  DEFINED  IN SEC  REGULATION  S, A NEW  CERTIFICATE  BEARING NO
                  LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD DELIVERY," MAY
                  BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT UPON DELIVERY OF
                  THIS  CERTIFICATE AND A DULY EXECUTED  DECLARATION,  IN A FORM
                  SATISFACTORY  TO THE TRANSFER  AGENT AND THE  COMPANY,  TO THE
                  EFFECT THAT THE SALE OF THE SHARES REPRESENTED HEREBY IS BEING
                  MADE IN COMPLIANCE WITH RULE 904 OF SEC REGULATION S UNDER THE
                  SECURITIES ACT.

                  (b) If  any  Warrant  Shares  are to be  issued  prior  to the
earlier of the following dates (such date being the "AUTOMATIC ISSUE DATE"): (i)
the  fifth  Business  Day after a receipt  is issued by the  Ontario  Securities
Commission for a final prospectus qualifying the distribution of the Warrants or
the  Warrant  Shares;  and (ii) the date which is four months plus one day after
the  Closing  Date,  each  certificate  for  Warrant  Shares so issued  upon the
exercise of this Warrant,  and until the Automatic  Issue Date each  certificate
for Warrant Shares issued to any subsequent  transferee of any such certificate,
shall be stamped  or  otherwise  imprinted  with a legend in  substantially  the
following form:

                  "UNLESS PERMITTED UNDER SECURITIES LEGISLATION,  THE HOLDER OF
                  THESE  SECURITIES  SHALL NOT TRADE THE SECURITIES  BEFORE [THE
                  DATE THAT IS FOUR MONTHS PLUS ONE DAY AFTER THE CLOSING DATE]"

                  3.3. Division and Combination;  Expenses;  Books. This Warrant
may be divided or combined with other Warrants upon  presentation  hereof at the
aforesaid  office or  agency  of the  Company,  together  with a written  notice
specifying the names and  denominations  in which new Warrants are to be issued,
signed by the  Holder or its  agent or  attorney.  Subject  to  compliance  with
Section  3.1 as to any  transfer  which  may be  involved  in such  division  or
combination,  the Company shall execute and deliver a new Warrant or Warrants in
exchange  for the Warrant or  Warrants  to be divided or combined in  accordance
with such  notice.  The  Company  shall  prepare,  issue and  deliver at its own
expense the new Warrant or Warrants  under this Section 3. The Company agrees to
maintain,  at its aforesaid office or agency, books for the registration and the
registration of transfer of the Warrants.

                  4. ADJUSTMENTS; LISTING. The number of Common Shares for which
this Warrant is exercisable, and the price at which such shares may be purchased
upon exercise of this Warrant,  shall be subject to adjustment from time to time
as set forth in this Section 4. The Company  shall give the Holder notice of any
event described below which requires an adjustment pursuant to this Section 4 in
accordance with Sections 5.1 and 5.2.

                  4.1 Stock Dividends,  Subdivisions and Combinations. (a) If at
any time  during the period  from the Closing  Date to the  Expiration  Date the
Company shall:

                           i. take a record of the holders of its Common  Shares
                  for the  purpose  of  entitling  them to  receive  a  dividend
                  payable  in,  or  other  distribution  of,  additional  Common
                  Shares,


                                                                               8



                           ii. subdivide or split its outstanding  Common Shares
                  into a larger number of Common Shares, or

                           iii.  combine or consolidate its  outstanding  Common
                  Shares into a smaller number of Common Shares,

then:

                           (1)      the number of Common Shares  acquirable upon
                                    exercise of this Warrant  immediately  after
                                    the  occurrence  of any such event  shall be
                                    adjusted  to  equal  the  number  of  Common
                                    Shares  which a  record  holder  of the same
                                    number of Common Shares that would have been
                                    acquirable  under this  Warrant  immediately
                                    prior to the  occurrence of such event would
                                    own or be  entitled  to  receive  after  the
                                    happening of such event, and

                           (2)      the Current  Warrant Price shall be adjusted
                                    to equal:

                                    (A)     the Current  Warrant Price in effect
                                            immediately  prior to the occurrence
                                            of  such  event  multiplied  by  the
                                            number of Common  Shares  into which
                                            this    Warrant    is    exercisable
                                            immediately prior to the adjustment,
                                            divided by

                                    (B)     the  number  of Common  Shares  into
                                            which this  Warrant  is  exercisable
                                            immediately after such adjustment.

         (b) Any  adjustment  made  pursuant to Section  4.1(a)(i)  shall become
effective   immediately   after  the  record  date  for  the   determination  of
shareholders  entitled  to  receive  such  dividend  or  distribution,  and  any
adjustment  pursuant to Sections  4.1(a)(ii)  or (iii)  shall  become  effective
immediately after the effective date of such subdivision or combination.

                  4.2 Fractional Interests.  In computing adjustments under this
Section 4, all calculations shall be made to the nearest 1/100th of a share.

                  4.3 Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets.

                           a. If, during the period from the Closing Date to the
Expiration  Date,  there  shall occur a Change of Control  and,  pursuant to the
terms of such Change of Control,  common  shares of the  successor  or acquiring
corporation,  or any cash,  shares or other securities or property of any nature
whatsoever  (including  warrants or other  subscription  or purchase  rights) in
addition  to or  in  lieu  of  common  shares  of  the  successor  or  acquiring
corporation  ("Other  Property"),  are to be received by or  distributed  to the
holders of Common  Shares of the Company,  then the Holder of this Warrant shall
have the right  thereafter  to receive,  upon the exercise of the  Warrant,  the
number of common  shares of the  successor  or acquiring  corporation  or of the
Company, if it is the surviving  corporation,  and the Other Property receivable


                                                                               9




upon or as a result of such  Change  of  Control  by a holder  of the  number of
Common Shares into which this Warrant is exercisable  immediately  prior to such
event.

                           b.  In  case  of any  such  Change  of  Control,  the
successor or acquiring  corporation  (if other than the Company) shall expressly
assume  the due and  punctual  observance  and  performance  of each  and  every
covenant and condition contained in this Warrant to be performed and observed by
the Company and all the obligations and liabilities  hereunder,  subject to such
modifications  as may be deemed  appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of Common
Shares  into  which  this  Warrant  is  exercisable  which  shall  be as  nearly
equivalent as practicable to the adjustments provided for in Section 4.

                  4.4      Listing and Adjustment to Current Warrant Price.

                  (a) The Seller  shall use its best efforts to obtain a listing
for its  Common  Shares  (including  the  Warrant  Shares) on the New York Stock
Exchange,  the American Stock Exchange, the NASDAQ National Market or the NASDAQ
SmallCap  Market within 12 months of the Closing Date.  The Seller shall use its
best efforts to list the Warrant Shares on each securities exchange or quotation
system  upon which the Common  Shares may be listed from time to time during the
time period  that the Common  Shares are listed on such  securities  exchange or
quotation  system.  The Seller  represents  and  warrants to the Holder that the
Warrant  Shares have been approved for listing on the Toronto Stock  Exchange as
of the Closing Date.

                  (b) If the  Seller  does not  obtain a listing  for its Common
Shares  (including  the  Warrant  Shares)  on the New York Stock  Exchange,  the
American  Stock  Exchange,  the NASDAQ  National  Market or the NASDAQ  SmallCap
Market within 12 months of the Closing Date, the Current  Warrant Price shall be
immediately  reduced  by an  amount  equal to 14.0%  (fourteen  percent)  of the
then-current  Current  Warrant  Price (being a reduction to the Current  Warrant
Price as at the Closing Date from Cdn.$2.50 to Cdn.$2.15).

                  4.5 Other Action Affecting Common Shares.  In case at any time
or from time to time during the period from the Closing  Date to the  Expiration
Date the Company  shall take any action in respect of its Common  Shares,  then,
unless such action will not have a materially  adverse effect upon the rights of
the holder of this Warrant, the number of Common Shares or other shares or Other
Property  into  which this  Warrant is  exercisable  and/or the  purchase  price
thereof   shall  be  adjusted  in  such  manner  as  may  be  equitable  in  the
circumstances.

                  4.6 Share Transfer Taxes. The issue of share certificates upon
exercise of this Warrant shall be made without  charge to the holder for any tax
in respect of such issue.

                  4.7  Adjustment  for Events  After  Closing  Date but Prior to
Issue  Date.  For greater  certainty,  if at any time during the period from the
Closing  Date to the Issue Date,  any event or action  occurred  that,  if these
Warrants had been issued at that time,  would have  required an adjustment to be
made pursuant to this Article 4, such adjustment  shall be made immediately upon
issuance of these  Warrants as if these  Warrants had been issued on the Closing
Date and shall be effective as of the date on which such  adjustment  would have
been effective if these Warrants had been issued on the Closing Date.


                                                                              10




                  5. NOTICES TO WARRANT HOLDERS.

                  5.1.  Certificate  as to  Adjustments.  Upon the occurrence of
each  adjustment or  readjustment of the Current Warrant Price, or the number of
Common Shares and the amount,  if any of Other  Property which at the time would
be received upon exercise of the Warrants owned by such Holder, the Company,  at
its  expense,   shall  promptly  compute  such  adjustment  or  readjustment  in
accordance  with the terms  hereof and prepare and furnish to the Holder of this
Warrant a certificate  setting forth such adjustment or readjustment and showing
in detail the facts upon which such  adjustment or  readjustment  is based.  The
Company  shall,  upon the  written  request  at any time of the  Holder  of this
Warrant,  furnish or cause to be  furnished  to such  Holder a like  certificate
setting forth (i) such adjustments and  readjustments,  (ii) the Current Warrant
Price at the time in  effect  and (iii) the  number  of  Common  Shares  and the
amount,  if any, of Other  Property which at the time would be received upon the
exercise of Warrants owned by such Holder.

                  5.2. Notice of Corporate Action. If at any time:

                           (a) the Company shall take a record of the holders of
         its  Common  Shares  for the  purpose  of  entitling  them to receive a
         dividend  or  other  distribution,  or any  right to  subscribe  for or
         purchase any evidences of its indebtedness,  any shares of any class or
         any other securities or property, or to receive any other right, or

                           (b) there shall be any capital  reorganization of the
         Company, any reclassification or recapitalization of the capital of the
         Company or any  consolidation  or merger of the  Company  with,  or any
         sale,  transfer or other  disposition of all or  substantially  all the
         property, assets or business of the Company to, another corporation, or

                           (c)  there  shall  be  a  voluntary  or   involuntary
         dissolution, liquidation or winding up of the Company;

         then,  in any one or more of such cases,  the Company shall give to the
         Holder (i) at least 15 days'  prior  written  notice of the record date
         selected for such dividend,  distribution  or right or for  determining
         rights to vote in respect of any such reorganization, reclassification,
         merger,  consolidation,   sale,  transfer,  disposition,   dissolution,
         liquidation   or  winding  up,  and  (ii)  in  the  case  of  any  such
         reorganization,    reclassification,   merger,   consolidation,   sale,
         transfer, disposition, dissolution, liquidation or winding up, at least
         15 days'  prior  written  notice of the date when the same  shall  take
         place.  Such notice in accordance with the foregoing  clause also shall
         specify  (i) the date on which  any such  record is to be taken for the
         purpose of such dividend,  distribution or right, the date on which the
         holders  of  Common  Shares  shall be  entitled  to any such  dividend,
         distribution or right, and the amount and character  thereof,  and (ii)
         the date on which any such  reorganization,  reclassification,  merger,
         consolidation, sale, transfer, disposition, dissolution, liquidation or
         winding  up is to take  place and the  time,  if any such time is to be
         fixed,  as of which the holders of Common  Shares  shall be entitled to


                                                                              11




         exchange   their  Common  Shares  for   securities  or  other  property
         deliverable  upon  such   reorganization,   reclassification,   merger,
         consolidation, sale, transfer, disposition, dissolution, liquidation or
         winding up. Each such  written  notice shall be  sufficiently  given if
         addressed to the Holder at the last address of the Holder  appearing on
         the books of the Company and delivered in accordance with Section 12.2.
         The failure to give any notice  required by this  Section 5.2 shall not
         invalidate any such corporate action.

                  5.3. Notice to  Shareholders.  The Holder shall be entitled to
the same  rights to  receive  notice of  Company  action as any holder of Common
Shares.

                  6.  NO  IMPAIRMENT.  The  Company  shall  not by  any  action,
including,  without limitation,  amending its articles of continuance or through
any  reorganization,  transfer of assets,  consolidation,  merger,  dissolution,
issue or sale of  securities  or any other  voluntary  action,  avoid or seek to
avoid the  observance or  performance  of any of the terms of this Warrant,  but
will at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or  appropriate to protect
the rights of the Holder against impairment.  Without limiting the generality of
the foregoing,  the Company will (a) take all such action as may be necessary or
appropriate  in order that the Company may validly and legally  issue fully paid
and non-assessable  Common Shares upon the exercise of this Warrant, and (b) use
its best efforts to obtain all such authorizations,  exemptions or consents from
any public  regulatory body having  jurisdiction  thereof as may be necessary to
enable the  Company to perform  its  obligations  under this  Warrant.  Upon the
request of the  Holder,  the  Company  will at any time  during the period  this
Warrant is outstanding  acknowledge in writing, in form reasonably  satisfactory
to the Holder,  the continuing  validity of this Warrant and the  obligations of
the Company hereunder.

                  7.   RESERVATION   AND   AUTHORIZATION   OF   COMMON   SHARES;
REGISTRATION  WITH APPROVAL OF ANY  GOVERNMENTAL  AUTHORITY.  From and after the
Closing  Date,  the Company  shall at all times  reserve and keep  available for
issue upon the exercise of Warrants such number of its  authorized  but unissued
Common  Shares as will be  sufficient  to  permit  the  exercise  in full of all
outstanding Warrants. All Common Shares which shall be so issuable,  when issued
upon  exercise  of any  Warrant and  payment  therefor  (including,  for greater
certainty,  cashless  exercise  thereof)  in  accordance  with the terms of such
Warrant, shall be duly and validly issued and fully paid and non-assessable, and
not subject to preemptive rights. Before taking any action which would result in
an  adjustment  in the  number  of  Common  Shares  for which  this  Warrant  is
exercisable or in the Current  Warrant Price,  the Company shall obtain all such
authorizations or exemptions  thereof,  or consents thereto, as may be necessary
from any public regulatory body or bodies or stock exchanges having jurisdiction
thereof. If any Common Shares required to be reserved for issuance upon exercise
of Warrants, or any distribution thereof,  require registration or qualification
with any  governmental  authority  under any  federal,  provincial  or state law
(including  Canadian  provincial  securities  laws) before such shares may be so
issued (other than as a result of a prior or  contemplated  distribution  by the
Holder  of  this   Warrant  or  the   inability   of  the  Holder  to  make  the
representations  contained in the  subscription  form attached hereto as Exhibit
A), the Company will in good faith and as  expeditiously  as possible and at its
expense endeavor to cause such shares or such  distribution of such shares to be
duly registered or qualified.


                                                                              12




                  8. TAKING OF RECORD;  SHARE AND WARRANT TRANSFER BOOKS. In the
case of all  dividends or other  distributions  by the Company to the holders of
its Common Shares with respect to which any provision of Section 4 refers to the
taking of a record of such holders, the Company will in each such case take such
a record  and will take such  record as of the close of  business  on a Business
Day. The Company will not at any time, except upon  dissolution,  liquidation or
winding up of the Company,  close its share transfer  books or Warrant  transfer
books so as to result in  preventing or delaying the exercise or transfer of any
Warrant.

                  9. LOSS OR  MUTILATION.  Upon  receipt by the Company from the
Holder of evidence  reasonably  satisfactory  to it of the  ownership of and the
loss, theft,  destruction or mutilation of this Warrant and indemnity reasonably
satisfactory  to it (it  being  understood  that the  written  agreement  of the
original  Holder shall be sufficient  indemnity) and in case of mutilation  upon
surrender and cancellation  hereof, the Company will execute and deliver in lieu
hereof a new Warrant of like tenor to the Holder; provided, however, that in the
case  of  mutilation,  no  indemnity  shall  be  required  if  this  Warrant  in
identifiable form is surrendered to the Company for cancellation. Applicants for
a replacement Warrant under such circumstances shall also comply with such other
reasonable  regulations and procedures and pay such other reasonable  charges as
the Company may prescribe.

                  10.  OFFICE  OF THE  COMPANY.  As long as any of the  Warrants
remain outstanding, the Company shall maintain an office or agency (which may be
the  principal  executive  offices of the  Company)  where the  Warrants  may be
presented for exercise,  registration  of transfer,  division or  combination as
provided in this Warrant.

                  11.  LIMITATION  OF  LIABILITY.  No provision  hereof,  in the
absence of affirmative  action by the Holder to purchase  Common Shares,  and no
enumeration herein of the rights or privileges of the Holder hereof,  shall give
rise to any liability of the Holder for the purchase price of any Common Shares,
whether  such  liability  is  asserted  by the  Company or by  creditors  of the
Company.

                  12. MISCELLANEOUS.

                  12.1.  Nonwaiver  and  Expenses.  No course of  dealing or any
delay or failure to exercise any right hereunder on the part of the Holder shall
operate as a waiver of such right or otherwise prejudice Holder's rights, powers
or remedies.  If the Company fails to make, when due, any payments  provided for
hereunder,  or fails to comply with any other  provision  of this  Warrant,  the
Company shall pay to the Holder such amounts as shall be sufficient to cover any
costs and expenses  including,  but not limited to, reasonable  attorneys' fees,
including those of appellate  proceedings,  incurred by the Holder in collecting
any amounts due  pursuant  hereto or in otherwise  enforcing  any of its rights,
powers or remedies hereunder.

                  12.2.  Notice  Generally.  All notices,  requests,  demands or
other communications provided for herein shall be in writing and shall be deemed
to have been given the next Business Day after being deposited with a nationally
recognized  overnight  courier  such as  Federal  Express,  or  when  personally
delivered,  or successfully sent by facsimile transmission as evidenced by a fax


                                                                              13




machine  confirmation  report  thereof,  addressed,  as the case may be,  to the
Holder at the  address  on the  books  and  records  of the  Company;  or to the
Company,  YM  BioSciences  Inc.,  5045  Orbitor  Drive,  Building 11, Suite 400,
Mississauga,  Ontario,  Canada L4W 4Y4, Att'n: Chief Executive Officer,  Fax No.
(905)  629-4959;  with a copy to Heenan  Blaikie LLP,  Suite 2600,  South Tower,
Royal Bank Plaza, Toronto,  Ontario,  Canada M5J 2J4 Att'n: Gregory Colford, Fax
No.  (416)  360-8425,  or to such other  person or address as either party shall
designate to the other from time to time in writing forwarded in like manner.

                  12.3.  Successors and Assigns.  Subject to compliance with the
provisions  of Section 3.1, this Warrant and the rights  evidenced  hereby shall
inure to the benefit of and be binding  upon the  successors  of the Company and
the  successors  and assigns of the Holder.  The  provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant,
and shall be enforceable  by any such Holder,  but nothing in this Warrant shall
be construed to give any person or corporation  or other entity,  other than the
Company and the Holder and their respective successors and assigns, any legal or
equitable right, remedy or cause under this Warrant.

                  12.4.  Amendment.  This  Warrant may be modified or amended or
the  provisions of this Warrant  waived with the written  consent of the Company
and the Holder.

                  12.5. Severability.  Wherever possible, each provision of this
Warrant shall be  interpreted  in such manner as to be effective and valid under
applicable  law, but if any  provision of this Warrant shall be prohibited by or
invalid under  applicable law, such provision shall be modified to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision or the remaining provisions of this Warrant.

                  12.6. Headings.  The headings used in this Warrant are for the
convenience of reference  only and shall not, for any purpose,  be deemed a part
of this Warrant.

                  12.7.   Governing  Law.  This  Warrant  and  the  transactions
contemplated hereby shall be deemed to be consummated in the Province of Ontario
and shall be governed by and  interpreted  in accordance  with the local laws of
the Province of Ontario  without  regard to the provisions  thereof  relating to
conflict of laws. The Company hereby  irrevocably  consents to the non exclusive
jurisdiction  of the  Ontario  Superior  Court of Justice  located  in  Toronto,
Ontario in connection  with any action or proceeding  arising out of or relating
to this Warrant.  In any such litigation the Company waives personal  service of
any summons,  complaint or other process and agrees that the service thereof may
be made by certified or  registered  mail directed to the Company at its address
set forth in Section 12.2.



                            [Signature Page Follows]

                                                                              14




                  IN WITNESS  WHEREOF,  the Company has caused this Common Share
Purchase  Warrant to be executed by its duly authorized  officer and attested by
its Secretary.

Dated: ___________, 200___

                                              YM BIOSCIENCES INC.

                                              By:______________________________
                                                 Name:
                                                 Title:

Attest:

By:______________________________
Name:
Title:





                                    EXHIBIT A

                                SUBSCRIPTION FORM

                 [To be executed only upon exercise of Warrant]

DATE:             ________________________, 20______.

1.       EXERCISE

___      The undersigned  registered owner of this Warrant hereby exercises this
         Warrant for the purchase of ___________ Common Shares of YM BioSciences
         Inc.,  a  corporation  continued  and  existing  under the laws of Nova
         Scotia (the  "Company"),  at the price and on the terms and  conditions
         specified in this Warrant and requests that certificates for the Common
         Shares hereby purchased (and any securities or other property  issuable
         upon  such  exercise)  be  issued  in  the  name  of and  delivered  to
         __________________         and         whose         address         is
         _______________________________________________.

         The undersigned  hereby makes payment for the  above-referenced  Common
         Shares by  tendering  herewith  payment of the  purchase  price of such
         shares in full.

2.       CASHLESS EXERCISE

___      The  undersigned  hereby  elects to exercise  the  attached  Warrant to
         acquire  Common  Shares  through  "cashless  exercise"  in  the  manner
         specified in Section 2.1(b) of the Warrant.  This method of exercise is
         used with respect to _____________________ of the Common Shares covered
         by the Warrant, and the relevant calculation pursuant to Section 2.1(b)
         is as follows:

         [(A - B)(X)] divided by A

         A    =   Current  Market Price  of one  Common Share on the date hereof
              =   [U.S./Cdn.] $ ________________  (if in U.S.$,  please  convert
                  to Cdn.$ at  applicable  Exchange Rate)

         B    =   Current Warrant Price
              =   Cdn. $ ________________

         X    =   total  number  of  Warrant Shares  as to which this Warrant is
                  being exercised
              =   _________________ Common Shares

         Net Number of Common Shares issuable:  _____________________

If such  Common  Shares  shall not  include  all of the Common  Shares (or other
securities or property)  issuable as provided in this Warrant,  a new Warrant of
like tenor and date for the balance of the Common Shares (or other securities or
property) issuable hereunder shall be delivered to the undersigned.

As of the date hereof, and assuming the accuracy of all information filed by the
Company with the  Securities and Exchange  Commission,  the  undersigned  Holder
hereby  certifies that the exercise of the referenced  Warrant for the number of
Common  Shares  herein  indicated  will not put the  undersigned  Holder  out of
compliance with the Beneficial Ownership Cap (as defined in the Warrant).





By signing below,  the Holder  warrants and represents that the Holder (i) is an
"accredited  investor"  as  that  term  is  defined  under  Regulation  D of the
Securities and Exchange Commission promulgated under the Securities Act of 1933,
as  amended  and  (ii) is  acquiring  the  securities  for its own  account  for
investment  and  not  with a view  to,  or for  sale  in  connection  with,  any
distribution  thereof,  nor with the intention of  distributing or reselling the
same, provided,  however,  that by making the representation  herein, the Holder
does not agree to hold any of the  securities  for any minimum or other specific
term  and  reserves  the  right  to  dispose  of the  securities  at any time in
accordance  with or pursuant to a registration  statement or an exemption  under
the  Securities  Act. In addition,  if the Holder is not the original  Holder of
this Warrant, the Holder shall provide the Company with an opinion of counsel or
other  evidence  satisfactory  to the  Company  that the  issuance of the Common
Shares upon exercise of the Warrant is exempt from the registration requirements
of Securities Act of 1933, as amended,  and applicable  state securities law. In
addition, by signing below, if this exercise is occurring prior to the Automatic
Issue Date (as defined in the  certificate  evidencing  this Warrant) the Holder
warrants and represents that the Holder is an "accredited investor" as that term
is defined in Ontario Securities Commission Rule 45-501 - Exempt Distributions.


                --------------------------------------------------------
                (Name of Registered Owner)


                --------------------------------------------------------
                (Signature of Registered Owner)


                --------------------------------------------------------


                --------------------------------------------------------
                 (Street Address)



                --------------------------------------------------------

                --------------------------------------------------------
                (State/Province) (Zip/Postal Code)

NOTICE:   The  signature on  this  subscription must correspond with the name as
          written upon the face of the Warrant.





                                    EXHIBIT B

                                 ASSIGNMENT FORM

FOR VALUE  RECEIVED  the  undersigned  registered  owner of this Warrant for the
purchase of shares of YM BioSciences Inc., a corporation  continued and existing
under the laws of Nova Scotia,  hereby  sells,  assigns and  transfers  unto the
Assignee  named below all of the rights of the  undersigned  under this Warrant,
with respect to the number of Common Shares set forth below:

Name and Address of Assignee: _____________________________________________

No. of Common Shares: ____________________________________________

and   does   hereby   irrevocably   constitute   and   appoint   _______________
attorney-in-fact  to  register  such  transfer  on the  books  of  the  Company,
maintained for the purpose, with full power of substitution in the premises.

Dated: ______________________________________________

Print Name:__________________________________________

Signature:____________________________________________

Witness:_____________________________________________

NOTICE:   The  signature on  this  assignment  must correspond  with the name as
          written upon the face of the Warrant in every particular.