Procyon Biopharma Inc. and Cellpep have entered into a definitive acquisition agreement under which Procyon has offered to acquire all of the outstanding securities of Cellpep in exchange for a number of common shares equal to $39.1 million in value to be issued to the Cellpep shareholders.

The strategic combination of both companies will form a new entity: Ambrilia Biopharma Inc., a global, publicly-listed biopharmaceutical company specialised in the development of innovative therapeutics in the fields of oncology and infectious diseases.

Cellpep brings to Procyon a complementary oncology and infectious diseases product portfolio that includes two late-stage high-value generics. The first of these products, octreotide, for which distribution agreements with major pharmaceutical companies have been already concluded, is expected to be launched in Europe in 2007 and in the US in 2008. The second product, goserelin, is expected to be launched in Europe in 2008. With this combined portfolio comprised of high-value late-stage products, Ambrilia Biopharma expects to accelerate its path to profitability and enhance its global position by generating potential revenues through US and European sales of octreotide and goserelin.

"We are very excited about this major strategic move to bring both companies together. Combining an early-stage with a late-stage oncology and infectious diseases products company will, we believe, create value for all of our stakeholders. The expected revenues from Cellpep's high-value generics should enable Ambrilia to reach profitability within the next 24 months. Furthermore, we are delighted by the successful financing we were able to achieve from both North American and European investors," said Hans J. Mader, president and chief executive officer of Procyon Biopharma.

Cellpep is a French, private biotechnology company with headquarters in Paris and a subsidiary in Montreal. The company identifies and develops leading edge technologies in the fields of oncology and infectious diseases.

Procyon Biopharma Inc. is a biotechnology company actively engaged in the discovery and development of innovative therapeutics in the fields of cancer and HIV/AIDS.