Mr. James Helliwell reports

EUPRAXIA PHARMACEUTICALS ANNOUNCES CLOSING OF US$63.2 MILLION PUBLIC OFFERING INCLUDING FULL EXERCISE OF UNDERWRITER OPTION

Eupraxia Pharmaceuticals Inc. has successfully closed its previously announced public offering of 7,607,145 common shares of the company, which includes the full exercise of the option to purchase additional shares granted to the underwriters, at a price to the public of $7 (U.S.) per common share, and prefinanced warrants to purchase up to 1,428,571 common shares in lieu thereof at a price of $6.99999 (U.S.) per prefinanced warrant, which equals the public offering price per common share less the 0.0001-Canadian-cent-per-share exercise price of each prefinanced warrant, for gross proceeds of approximately $63.2-million (U.S.), before deducting the underwriting commissions and estimated expenses incurred in connection with the offering.

"We are pleased to complete this financing, allowing us to significantly expand our pipeline, reach several additional development milestones with EP-104GI for eosinophilic esophagitis, and make meaningful progress towards commercial readiness," said James Helliwell, chief executive officer of Eupraxia. "We appreciate the support from both existing and new investors as we execute our mission and pursue the next phase of growth for Eupraxia."

Cantor and LifeSci Capital acted as joint bookrunning managers for the offering. Bloom Burton and Craig-Hallum also acted as co-managers for the offering.

As previously stated, the company intends to use the net proceeds from the offering primarily for the continued advancement of EP-104GI for eosinophilic esophagitis, including the completion of continuing preclinical studies, and phase 2 clinical trials, preparations for a phase 3 clinical trial, including the related regulatory submissions, and manufacturing activities, and to undertake the necessary commercial/market development activities to prepare for the eventual product launch. The company also intends to use a portion of the proceeds to accelerate and expand its plans to pursue clinical studies with EP-104GI in multiple additional gastrointestinal indications, including in esophageal strictures and fibrostenotic Crohn's disease. A portion of the proceeds will be allocated to research and development of additional pipeline candidates, business development initiatives and general corporate purposes, which may include, but are not limited to, employee salaries, working capital, leases for facilities, administrative expenses and capital expenditures. The company may also use a portion of the proceeds to expand its intellectual property portfolio and strengthen its corporate infrastructure to support future growth.

The offering was made pursuant to a U.S. registration statement on Form F-10, declared effective by the U.S. Securities and Exchange Commission (SEC) on Feb. 7, 2024, and the company's existing Canadian short form base shelf prospectus, dated Feb. 5, 2024. A preliminary prospectus supplement and a final prospectus supplement relating to and describing the terms of the offering were filed with the securities commissions in all of the provinces and territories of Canada, except Quebec, and with the SEC in the United States. The supplement and accompanying base prospectus contain important detailed information about the offering.

The supplement and accompanying base prospectus can be found on SEDAR+ and on EDGAR. Copies of the supplement and accompanying base prospectus may also be obtained from Cantor Fitzgerald & Co., attention: capital markets, 110 East 59th St. (sixth floor), New York, N.Y., 10022, or by e-mail at prospectus@cantor.com, from LifeSci Capital LLC at 1700 Broadway (40th floor), New York, N.Y., 10019, or by e-mail at compliance@lifescicapital.com, or from Bloom Burton Securities Inc. at ecm@bloomburton.com, or from Craig-Hallum Capital Group LLC, attention: equity capital markets, 323 North Washington Ave., Suite 300, Minneapolis, Minn., 55401, or by telephone at 612-334-6300, or by e-mail at prospectus@chlm.com.

About Eupraxia Pharmaceuticals Inc.

Eupraxia is a clinical-stage biotechnology company focused on the development of locally delivered, extended-release products that have the potential to address therapeutic areas with high unmet medical need. Diffusphere, a proprietary, polymer-based microsphere technology, is designed to facilitate targeted drug delivery of both existing and novel drugs.

We seek Safe Harbor.