Paladin Enters Into Agreement for a $35.0 Million Bought Deal of Common Shares

MONTREAL, QUEBEC--(Marketwire - Feb. 3, 2011) -

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Paladin Labs Inc. ("Paladin" or the "Company") (TSX:PLB), a leading Canadian specialty pharmaceutical company, today announced that it has entered into a bought deal agreement with GMP Securities L.P., as lead underwriter, acting on behalf of a syndicate of dealers including Bloom Burton & Co., Paradigm Capital, RBC Capital Markets, TD Securities, Versant Partners, Cormark Securities and Desjardins Securities, pursuant to which the underwriters have agreed to purchase 1,000,000 Common Shares at a price of $35.00 per Common Share for gross proceeds to Paladin of $35,000,000 (the "Offering"). In addition, the underwriters will have the option, exercisable for a period of 30 days after the closing date, to acquire up to an aggregate of 150,000 additional Common Shares ($5,250,000) at the offering price to cover over-allotments, if any, for total gross proceeds to Paladin of up to $40,250,000.

The Company will file a preliminary short form prospectus in each of the provinces of Canada for the purpose of qualifying the Common Shares for distribution to the public on or before February 9, 2011 and the offering is scheduled to close on or about February 24, 2011. The Company intends to use the net proceeds of the offering for growth capital to acquire and in-license additional innovative pharmaceutical products, working capital and general corporate purposes.

The offering is subject to the receipt of all necessary regulatory and stock exchange approvals.

THE COMMON SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS.

About Paladin Labs:

Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian and world markets. With this strategy, a focused national sales team and proven marketing expertise, Paladin has evolved into one of Canada's leading specialty pharmaceutical companies. Paladin's shares trade on the Toronto Stock Exchange under the symbol PLB.

For more information about Paladin, please visit the Company's website at www.paladinlabs.com.

Forward Looking Statements:

This press release may contain forward-looking statements and predictions. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Paladin considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared, but cautions that these assumptions regarding the future events, many of which are beyond the control of Paladin and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations, are discussed in the annual report as well as in Paladin's Annual Information Form for the year ended December 31, 2009. Paladin disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events and except as required by law. For additional information on risks and uncertainties relating to these forward-looking statements, investors should consult Paladin's ongoing quarterly filings, annual report and Annual Information Form and other fillings found on SEDAR at www.sedar.com.