Mistral Pharma Receives Notice of Default

Mistral Pharma Receives Notice of Default

MONTREAL, QUEBEC - Mistral Pharma today announced that it has received a notice of default and a notice to enforce security from MMV Financial Inc. ("MMV"), a senior secured creditor of the company. Pursuant to a credit agreement announced on October 16, 2006, Mistral obtained a US $ 1.5 M secured loan from MMV. As per the notice of default received, MMV requests the immediate payment of US $1.314M, on the basis that Mistral has failed to effect a principal and interest payment due on May 31, 2008. As per the notice to enforce security, MMV advised the Corporation that it reserves its rights to enforce its security, which can be effected only after the expiry of the 10-day period following the transmission of MMV's notice. Mistral's financial position does not currently allow it to effect the payment of US $1.314 M as requested by MMV.

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.

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