Stressgen Biotechnologies Corporation Announces Closing Of Overallotment Option

VICTORIA, Dec. 13 /PRNewswire-FirstCall/ - Stressgen Biotechnologies Corporation advises that Canaccord Capital Corporation has further exercised its overallotment option and the Corporation has issued an additional 2,685,000 units (each unit consisting of one common share and one- third of one common share purchase warrant) at a price of $0.35 per unit for gross proceeds of $939,750. The option was granted pursuant to an agency agreement with Canaccord, in connection with the recently announced private placement financing. The Company previously announced that it sold a total of 7,645,000 units for gross proceeds of $2,675,750 pursuant to that financing. Each whole warrant entitles the holder to purchase one common share of Stressgen at $0.50 for a period of twenty-four months.

About Stressgen Biotechnologies Corporation

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Stressgen, a biopharmaceutical company, focuses on the discovery, development and commercialization of innovative therapeutic vaccines for the treatment of infectious diseases and cancer. The corporation is publicly traded on the Toronto Stock Exchange under the symbol SSB.

About HspE7, Lead Product Candidate

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HspE7 is a novel CoVal(TM) fusion therapeutic vaccine designed for the treatment of diseases caused by the human papillomavirus (HPV), one of the most common causes of sexually transmitted diseases in the world. An estimated 80% of sexually active men and women are infected by genital HPV at some point in their lives. Approximately 5.5 million new sexually transmitted HPV infections are reported in the U.S. each year. At least 20 million people in the U.S. are already infected. HPV infection can result in diseases including internal and external genital warts and precancerous conditions, such as cervical and anal dysplasia. Precancerous HPV-related conditions can progress into life-threatening diseases, including cervical, anal, and head and neck cancers.

About CoVal(TM) Fusion Proteins

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Stressgen capitalizes upon the immunostimulatory powers of heat shock proteins utilizing recombinant technology to fuse, or covalently link, a stress protein with a protein antigen to create a single hybrid protein designed to trigger the immune system to recognize that antigen. For more information about CoVal(TM) fusion technology, or Stressgen, please visit the website located at www.stressgen.com.

This press release contains forward-looking statements regarding the financing and its impact on the Company's business and our intention to pursue initiatives focused on the development of HspE7. Actual results could be materially different from those implied by these forward-looking statements due to factors over which we have limited control, including but not limited to our ability to continue as a going concern, our ability to enter into corporate partnering relationships (and the effects and terms of those relationships), difficulties inherent in the manufacture of commercial-grade clinical supplies, our ability to meet regulatory approval requirements, the development of our potential products, including HspE7, not proceeding as planned, clinical trial uncertainties, the risk that, if successfully developed, HspE7 may not be commercially successful, the effect of our limited cash resources and our ability to secure financing. Please refer to our filings with Canadian securities regulators for more information on these and other applicable risks. We assume no obligation and expressly disclaim any duty to update any forward-looking statement to reflect events or circumstances after the date of this news release or to reflect the occurrence of subsequent events.

Donna Slade Director, Investor Relations 6055 Lusk Boulevard San Diego, CA USA 92121 Tel: (858) 202-4900 Fax: (858) 450-6849 dslade@stressgen.com

Stressgen Biotechnologies Corp.

CONTACT: Donna Slade, Director, Investor Relations, 6055 Lusk Boulevard,San Diego, CA, USA, 92121, Tel: (858) 202-4900, Fax: (858) 450-6849,dslade@stressgen.com

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