Mistral Pharma Inc.
TSX VENTURE : MIP

Mistral Pharma Inc.

March 20, 2008 11:50 ET

Mistral Pharma Obtains Interim Financing

MONTREAL, QUEBEC--(Marketwire - March 20, 2008) - THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES NOR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE SECURITIES DESCRIBED HEREIN.

Mistral Pharma Inc. (TSX VENTURE:MIP) ("Mistral") today announced that it has secured the $1,000,000 interim financing with private investors announced on February 27, 2008.

The financing is in the form of debentures, repayable on demand. The debentures are secured by a pledge on the amount of the loan and bear an 8% annual interest. A tranche of $200,000 has been retained by Mistral and the balance has been put in an escrow account and will be released by the escrow agent in accordance with certain conditions. The proceeds of the loan will be used for working capital. The loan is convertible into units upon completion of the unit offering announced on February 27, 2008. The debentures, the underlying shares and the underlying warrants are subject to resale restrictions until July 21, 2008. Mistral paid a cash commission and issued broker warrants to Loewen Ondaatje McCutcheon Limited in connection with its services in selling the debentures. The TSX Venture Exchange has conditionally approved the placement of convertible debentures, subject to usual conditions.

At the request of Mistral, trading on the common shares of Mistral will remain halted.

About Mistral Pharma Inc.

Mistral Pharma Inc. is an innovative pharmaceutical company that is active in the reformulation and the commercialization of already-marketed drugs. Its branded drug delivery products, MIST-B01, MIST-B02, MIST-B03 & MIST-B04, showed positive results at their respective first pilot clinical trials. Mistral also markets INSTILLAGEL® in Canada, a local anesthetic and antiseptic combination product used for urology procedures. Mistral has also in-licensed TAMALIS™ (Rupatadine) a new antihistamine, INSTILLAQUILL®, a single use extension tube used in gynecology as well as 6 generic injectable products which should be filed with Health Canada in 2008. Mistral positions itself as a specialty pharmaceutical company with a focus on hospital products. More information is available on Mistral's website at www.mistralpharma.com

Forward-looking Statements

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Mistral Pharma. These statements are based on assumptions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for Mistral Pharma's products, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

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