"With a number of potential cash-generating milestones on the horizon, a standby equity facility is well suited to our Company at this time," said James R. Howard-Tripp, President and Chief Executive Officer, Labopharm Inc. "Should we choose to access it, the facility provides a flexible, low cost source of capital in an amount and at the time of our choosing, with a built-in minimum price."

The Company can draw on YA's commitment by sending draw down notices from time to time. Each draw down notice is subject to a maximum amount of $2 million, as well as a minimum price, below which the Company will not issue shares to YA. Subject to the applicable minimum price, the common shares will be issued at a predetermined discount, up to a maximum of 5%, to the prevailing share price. Individual draw downs cannot exceed the number of shares that would represent more than 5% of the market capitalization of the Company or the number of shares that would cause YA and its affiliates to own more than 9.9% of the issued and outstanding shares of the Company. The maximum number of shares that the Company can issue under the agreement is limited to the lower of 11,426,533 common shares and 19.9% of the common shares issued and outstanding at any given time.

The agreement remains subject to certain conditions precedent, including the filing of a shelf prospectus with Canadian and U.S. securities authorities. The agreement can be terminated at any time by the Company without the payment of any additional fees.

In connection with the SEDA, the Company will file a preliminary short-form base shelf prospectus with the securities authorities in each province and territory of Canada and a corresponding registration statement with the United States Securities and Exchange Commission. These filings, when made final or effective, will allow the Company to qualify the shares issued under the SEDA and make offerings of common shares, preferred shares, warrants or combination thereof for an amount of up to $100 million during the next 25 months.

About Yorkville Advisors, LLC

Yorkville Advisors, LLC was founded in 2001 by Mark Angelo and specialises in providing flexible, innovative debt and equity investments and financing to publicly listed companies worldwide in a variety of sectors including healthcare, energy, mining, technology media & telecommunication (TMT), and shipping. Yorkville has a broad investment mandate and the flexibility to invest across many geographies as well as sectors. Yorkville tailors its financings according to each company's need and offers a mix of debt structures, bridge financings, asset backed loans, and equity facilities. Yorkville's headquarters is in Jersey City, New Jersey, and has offices in Florida, London and Hong Kong. It also participates in joint ventures in Italy, Greece and Israel.

About Labopharm Inc.

Labopharm is an emerging leader in optimizing the performance of existing small molecule drugs using its proprietary controlled-release technologies. The Company's lead product, a unique once-daily formulation of tramadol, is now available in 17 countries around the world, including the U.S., Canada, major European markets and Australia. The Company's second product, a novel formulation of trazodone for the treatment of major depressive disorder, is under regulatory review in the U.S. and in Canada. The Company also has a pipeline of follow-on products in both pre-clinical and clinical development. Labopharm's vision is to become an integrated, international, specialty pharmaceutical company with the capability to internally develop and commercialize its own products. For more information, please visit www.labopharm.com.

This press release contains forward-looking statements, which reflect the Company's current expectations regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors, including the uncertainties related to the regulatory process in various countries for the approval of the Company's products and the successful commercialization of the products throughout the world if they are approved. Investors should consult the Company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. The reader is cautioned not to rely on these forward-looking statements. Except as required by law, the Company undertakes no obligation and does not intend to update these forward-looking statements.