Paladin is pleased to announce that it has acquired the exclusive Canadian license for Valstar™ (valrubicin) from Anthra Pharmaceuticals, Inc. a US-based pharmaceutical company which focuses on the development of oncology therapeutics. Valstar™ is a chemotherapeutic anthracyline derivative indicated for intravesical therapy of refractory carcinoma-in situ (CIS) of the bladder. Refractory cases are those who have failed conventional first-line therapy with standard-of-care agents and are candidates for surgical removal of the bladder. In clinical trials, intravesical therapy with Valstar™ has been shown to allow one-third of patients to retain their bladders for up to four years.

Bladder carcinoma is the sixth most common cancer in Canada with an incidence of 4800 cases per year. Of all patients diagnosed, approximately 15% are afflicted with CIS. Only 70% are responsive to BCG , the current gold standard of therapy. Currently, in Canada, there is no therapeutic alternative to cystectomy for patients who have failed all other modalities of treatment. Valstar™ has the potential to be the first agent approved for intravesical therapy of refractory CIS in Canada. In the US, Valstar™ is the only FDA-approved agent specifically indicated for intravesical treatment of CIS and has Orphan Drug designation for this purpose.

Presently, Phase III clinical trials are underway to examine the efficacy of Valstar™ in the adjunctive therapy of papillary bladder carcinoma subsequent to surgical resection. Superficial papillary tumors are the most common form of bladder cancer and are characterized by a high rate of recurrence. European studies have shown that adjunctive therapy with an anthracycline drug immediately following surgery can significantly reduce tumor recurrence.

Under the terms of the agreement, Paladin will make an equity investment in Anthra Pharmaceuticals, Inc. of US$1,000,000 for the exclusive Canadian rights to Valstar™. In addition, Paladin will pay Anthra milestone payments totaling US$2.25 MM based upon the achievement of certain sales targets.

Development and marketing agreements for Valstar™ have been signed with a US subsidiary of Medeva PLC for the United States, Almirall Prodesfarma for Spain and Portugal and Nycomed Pharma for the rest of Europe.

Jonathan Goodman, President of Paladin stated " Paladin is committed to providing Canadian specialist physicians with novel therapeutic solutions to important medical conditions. We are pleased to have obtained the Canadian license to Valstar™. This product will be a key addition to our strong Urology franchise. Valstar™ has the potential to be the first therapy approved for the treatment of refractory CIS. We hope that it will increase the quality of life for patients whose only other recourse is surgical removal of the bladder."

Michael Walker, President of Anthra commented "Anthra is extremely pleased to be working with Paladin for the marketing and distribution of our drug, Valstar, in the Canadian marketplace. Our agreement with Paladin, a specialty pharmaceutical company, focussing on marketing products to Urologists represents our first step in our global strategy of corporate alliances with small specialty pharmaceutical companies to market Valstar globally. We believe that Paladin has the experience and expertise to give Valstar the full attention the product deserves in the Canadian Urology community. The agreement with Paladin is the first in a series of marketing alliances which Anthra hopes to complete by year-end for countries outside of Europe and the United States."

Paladin’s mission is to understand and serve 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.

The Vancouver Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements relating to the future performance of Paladin. Forward-looking statements, specifically those concerning future performance, are subject to certain risks and uncertainties, and actual results may differ materially.