Paladin Labs Inc.
TSX : PLB

Paladin Labs Inc.

May 21, 2009 08:07 ET

Paladin Enters Into Agreement for a $51 Million Bought Deal of Common Shares

MONTREAL, QUEBEC--(Marketwire - May 21, 2009) -

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Paladin Labs Inc. (TSX:PLB), a leading Canadian specialty pharmaceutical company, today announced that it has entered into a bought deal agreement with Cormark Securities Inc. and GMP Securities L.P., as co-lead underwriters, acting on behalf of a syndicate of underwriters including Desjardins Securities Inc. and TD Securities Inc., pursuant to which the underwriters have agreed to purchase 3,000,000 Common Shares at a price of $17.00 per Common Share for gross proceeds to Paladin of $51,000,000. 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 450,000 additional Common Shares ($7,650,000) at the offering price to cover over-allotments, if any, for total gross proceeds to Paladin of up to $58,650,000.

Paladin is advised that Joddes Limited ("Joddes"), a private Canadian corporation and a significant shareholder of Paladin, which currently holds approximately 6,348,341 Common Shares of Paladin, representing approximately 42% of Paladin's issued and outstanding Common Shares, has indicated its intention to purchase 750,000 Common Shares under the offering. If the over-allotment option is exercised in full, Joddes would own approximately 39% of the outstanding Common Shares of Paladin after giving effect to the offering.

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 May 27, 2009 and the offering is scheduled to close on or about June 11, 2009.

The net proceeds from the sale of the Common Shares will be used as follows: (i) to fund the transaction with Isotechnika Inc., (ii) to fund the final payment related to the acquisition of Dexedrine®; (iii) to continue Paladin's strategy of acquiring products with existing sales and to in-license and launch innovative brands; and (iv) for 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 ABSENT U.S. REGISTRATION OR AN APPLICABLE EXEMPTION FROM U.S. REGISTRATION REQUIREMENTS.

About Paladin Labs Inc.

Paladin Labs Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing innovative pharmaceutical products for the Canadian market. 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 web site at www.paladinlabs.com.

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. The Company 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 the Company and its subsidiary, 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 the Company's Annual Information Form for the year ended December 31, 2008. The Company 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 the Company's ongoing quarterly fillings, annual report and Annual Information Form and other fillings found on SEDAR at www.sedar.com.

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