FOR IMMEDIATE RELEASE

PALADIN LABS INC. ANNOUNCES RESULTS OF CONNETICS CORPORATION'S RELAXIN PHASE II/III STUDY

Montreal, Canada, October 10, 2000 - Paladin Labs Inc. ("Paladin") (TSE: PLB) announced that Connetics Corporation ("Connetics") (Nasdaq: CNCT) reported that its Phase III trial investigating recombinant human relaxin in the treatment of diffuse systemic sclerosis, also known as scleroderma, did not meet its primary clinical endpoint. Based on observed effects, Connetics will continue its relaxin clinical development program in vascular disease and infertility.

Paladin acquired the exclusive Canadian rights to relaxin, for all its current and future indications, in July 1999.

Connetics' Executive Vice President, Research & Product Development, Krisztina Zsebo Ph.D., stated, "the trial has produced important additional data on the biological activity of relaxin in humans. What we have found validates the angiogenic and vasodilatory benefits seen in previous preclinical data. Based on the results from this trial, and substantial existing preclinical data, we are encouraged by the confirmation of relaxin's biologic effect and the implications of this data for relaxin's potential in vascular disease and infertility."

Lennie Ryer, Paladin's CFO and Vice President Finance, stated, "we are saddened for patients suffering from scleroderma. While we are disappointed that Connetics will not file a BLA for relaxin in the treatment of scleroderma, we remain confident that Connetics has the ability to develop relaxin for other indications. Connetics currently holds in excess of US $80 million cash and marketable securities, and with a burn rate of less than US $15 million, has sufficient resources to develop relaxin."

Jonathan Goodman, President and CEO of Paladin, stated, "this is an example of the inherent risk of drug development and the reason why Paladin has worked diligently on developing a rich pipeline of late stage products. We currently have the Canadian rights to seven products in Phase III trials and are in the process of launching five new products. While we are clearly disappointed, we take comfort in knowing that our pipeline has the potential to sustain our growth."

About Paladin Labs Inc.
Paladin Labs, headquartered in Montreal, Quebec is a Canadian developer, marketer and distributor of innovative pharmaceuticals currently offering products in urology, dermatology, rheumatology and other specialty markets. For more information about Paladin, please visit the Paladin Web Site at www.paladin-labs.com or send e-mail to info@paladin-labs.com.

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

 

The Toronto 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 or predictions. These statements represent our judgement as of this date and are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed in such forward-looking statements. Potential risks and uncertainties include, without limitation, those associated with product development, clinical trials, future revenues and profitability, and obtaining marketing approval.

For further information please contact:

Paladin Labs Inc
Lennie Ryer, C.A., CFE
Chief Financial Officer
Tel: 514-340-5067
e-mail: lryer@paladin-labs.com
Web Site: www.paladin-labs.com

The Equicom Group
Jason Hogan
Vice President & Director
Tel: 416-815-0700 ext.222
e-mail: jhogan@equicomgroup.com
Web Site: www.equicomgroup.com