February 15

Paladin is pleased to announce that it has acquired the exclusive Canadian distribution rights for Sialor (Anetholtrithione) from Solvay Pharma Inc. Sialor is indicated for the treatment of oral symptoms of xerostomia (dry mouth).

Xerostomia occurs from depressed salivary flow as a result of radiation therapy for carcinoma of the head or neck, as a characteristic of Sjögren’s Syndrome, as a sequela of hemodialysis, or as a common side effect of many drugs. Dry mouth can also be caused by anxiety, mouth breathing, salivary obstruction or infection. The condition may also be observed as a natural consequence of aging.

Sialor is available in a package of 60 tablets representing one months supply of therapy.

Paladin intends on re-launching this product for the Canadian market in the second quarter of 1999. Paladin will pay Solvay a small up front payment and a royalty on the Net Sales of Sialor for the exclusive Canadian rights to this product..

Jonathan Goodman, President of Paladin stated "Sialor fits nicely with our acquisition of Moi-Stir brand saliva supplement made last year. This product has maintained steady sales in Canada despite not being promoted for many years. We believe that Sialor will respond to promotion and we are eager to initiate the re-launch of this product in Canada. The acquisition of Sialor represents the third product that we have added to our line this year that will be accretive to earnings in its first year. We fully expect to add a fourth product with existing sales to our growing portfolio of niche therapeutics in the 2^nd quarter of 1999."

Paladin’s mission is to reach $50 million in sales by 2002 by understanding and serving the needs of Canadian health-care professionals in niche therapeutic areas through the development, licensing and commercialization of innovative products.

Paladin Labs Inc. is a public company whose shares trade on the Vancouver Stock Exchange under the symbol PLB.