Mistral Pharma provides corporate udpate

Mistral Pharma provides corporate udpate

Montreal, Quebec – May 6, 2008 - Mistral Pharma (“Mistral”) today announced that it will not pursue the proposed combination with a private US-based specialty pharmaceutical company (“US Pharma Co.”) announced on February 27, 2008 and has terminated the non-binding letter of intent to that effect. This decision is based on the Mistral’s inability to meet different conditions including a concurrent financing round in the form of a private placement of equity securities due to current market conditions. As a result, the bridge financing announced on March 20th, 2008 has also been cancelled and the remaining funds have been returned to the secured bridge investors.

Mistral has initiated cash preservation measures which includes some temporary lay-offs and is presently seeking strategic alternatives for the company. Mistral continues to market Instillagel® in Canada and the product remains available to all its Canadian customers.

The following directors of Mistral have resigned from their position: Yves Rosconi, Jacques Gagné, Daniel Pharand. Mark Busgang, remains chairman of the board and Tom Kaneb, Robert Boisjoli, Peter Blaney and Bertrand Bolduc, President and CEO remain as directors of Mistral.

At the request of Mistral, trading on the common shares of Mistral will resume shortly.

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.

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.