U.S. Government Agrees To Purchase US$143 Million Of Anti-Anthrax Drug From Cangene Corporation

TORONTO, WINNIPEG, July 28 /PRNewswire-FirstCall/ - Cangene today announces that the U.S. Department of Health and Human Services ("HHS") has exercised its option to purchase 10,000 doses of anthrax immune globulin ("AIG") under a modification to an earlier development and supply contract. The AIG is to be made available for treating or preventing inhalational anthrax, which is an acute infectious disease that is caused by inhaling spores of the bacterium Bacillus anthracis. The value of this modification to the Project BioShield contract is approximately US$143 million and comes as a result of successful preliminary efficacy testing done earlier under the contract, which was originally signed in September 2005. Cangene has already delivered a small number of doses under this contract into the U.S. Strategic National Stockpile ("SNS"); however, additional deliveries will commence in the later part of 2007 and will be completed by the end of 2009. Cangene will receive payments following the delivery of these additional doses of usable product into the SNS. The contract also requires that Cangene apply for and receive authorization for marketing from the U.S. Food and Drug Administration ("FDA").

"This is the second significant development in our biodefence development program in just two months; this segment of our business is really gaining momentum," said Dr. John Langstaff, Cangene's president and CEO. "Antibody-based products provide an alternative approach to the more traditional antibiotic treatments for anthrax and we are pleased to provide another key product for the biodefence effort."

About the contract

Under the contract, the price per dose will be a discounted fixed price. To meet the "usable product" requirement, the product must be manufactured under licensable conditions and meet certain safety and regulatory conditions. Once FDA authorization for marketing in the U.S. is received, the Company may receive a supplemental payment. In addition to the base contract, there is a possibility of optional task orders that could increase the final value of the contract. These tasks could include maintaining product manufacturing and additional clinical testing in special populations. Cangene will manufacture this product at its Winnipeg facility but will use its U.S. subsidiaries and other U.S. companies for all key subcontracting activities.

About AIG and hyperimmunes

AIG is a hyperimmune to be used in treating inhalation anthrax. Hyperimmunes are purified preparations of specific immune globulins isolated from blood plasma. Immune globulins are the class of proteins that function as antibodies. Cangene's proprietary manufacturing process allows it to produce high-quality hyperimmune products aimed at a wide variety of targets. The Company has been manufacturing its WinRho(R) SDF hyperimmune product for 25 years, which has established the manufacturing technology. As such, new Cangene hyperimmune products tend to enter the regulatory process at a more advanced stage, which may shorten the development time. Most recently, the Company's development efforts have been concentrated on developing products with infectious disease and bioterrorism targets.

About anthrax

Anthrax infection, resulting from contact with spore-forming Bacillus anthracis bacteria, occurs most commonly in herbivores such as sheep, cattle, goats and camels. Human infections usually result from contact with infected animals. Due to the stability of the infectious spores, however, anthrax is considered to be a Category A biological agent. As well as through inhalation, human anthrax infection can also be acquired through the skin or by ingestion, and in all forms fatality rates are high.

About Cangene

Cangene is one of Canada's largest biotechnology companies. It was founded in 1984 and is headquartered in Winnipeg, Manitoba. Cangene carries out research and development in Mississauga, Ontario and Winnipeg. It uses patented manufacturing processes to produce plasma-derived and recombinant therapeutic proteins. In addition to having four approved products, Cangene has two products that have been submitted for regulatory review and a significant clinical trial program. Cangene also provides contract research and manufacturing services using its drug-manufacturing expertise and the resources of Chesapeake Biological Laboratories, Inc. (a wholly-owned subsidiary). The Company has manufacturing facilities in Winnipeg, Manitoba and Baltimore, Maryland. Cangene's website, www.cangene.com, includes product and investor information, including past news releases. Chesapeake's website is www.cblinc.com.

Forward-looking information

The reader should be aware that Cangene's businesses are subject to risks and uncertainties that cannot be predicted or quantified; consequently, actual results may differ materially from past results and those expressed or implied by any forward-looking statements. Factors that could cause or contribute to such risks or uncertainties include, but are not limited to: the regulatory environment including the difficulty of predicting regulatory outcomes; changes in the value of the Canadian dollar; the Company's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; cost of raw materials, especially the cost and antibody concentration in plasma; fluctuations in operating results; government policies or actions; progress and cost of clinical trials; reliance on key strategic relationships; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential cost associated with its defence; the Company's exposure to lawsuits, and uncertainties related to estimates and judgments used in preparation of financial statements in accordance with GAAP and related standards and other matters beyond control of management.

Risks and uncertainties are discussed more extensively in the MD&A section of the Company's most recent annual report and annual information form, which are available on the Company's website or on SEDAR at www.sedar.com. Scientific information that relates to unapproved products or unapproved uses of products is preliminary and investigative. No conclusions can or should be drawn regarding the safety or efficacy of such products. Only regulatory authorities can determine whether products are safe and effective for the uses being investigated. Healthcare professionals are directed to refer to approved labelling for products and not rely on information discussed in news releases.

The cautionary statements referred to above should be considered in connection with all written or oral statements, especially forward-looking statements, that are made by the Company or by persons acting on its behalf and in conjunction with its periodic filings with the Ontario Securities Commission, including those contained in the Company's news releases and most recently filed annual information form. Forward-looking statements can be identified by the use of words such as "expects", "plans", "will", "believes", "estimates", "intends", "may", "bodes", and other words of similar meaning. Should known or unknown risks or uncertainties materialize, or should management's assumptions prove inaccurate, actual results could vary materially from those anticipated. The Company undertakes no obligation to publicly make or update any forward-looking statements.

CONTACT: about Cangene Corporation, please contact John McMillan, VicePresident, Commercial Development at (204) 275-4310, or by email atjmcmilllan@cangene.com