Mr. Al Moghaddam reports

VALEO PHARMA INITIATES RESTRUCTURING PROCEEDINGS UNDER THE CCAA TO IMPLEMENT A REVIEW OF ITS STRATEGIC ALTERNATIVES

The Quebec Superior Court (Commercial Division) has issued an initial order granting Valeo Pharma Inc. and its subsidiaries VPI Pharmaceuticals Inc./VPI Pharmaceutiques Inc. and Valeo Pharma Corp. protection under the Companies' Creditors Arrangement Act (CCAA).

After a careful review of all available alternatives and following thorough consultation with its legal and financial advisers, the company's board of directors determined that it was in the best interest of Valeo and its stakeholders to file an application for creditor protection under the CCAA. The court's approval of the initiation of a formal sale and investment solicitation process is anticipated in order to generate interest in either the business or the assets of the company, or in a recapitalization of the company, with the goal of implementing one or more transaction(s), as the case may be. A transaction may be in addition to, or as an alternative to, a CCAA plan of compromise or arrangement, to maximize return in respect of the company's business and assets.

The initial order provides among other things i) a stay of creditor claims and exercise of contractual rights with a view to providing the company some breathing room to implement its strategic review process and, ii) the appointment of Ernst & Young Inc. to serve as monitor in the CCAA proceedings and to assist the company with its restructuring efforts and report to the court during the restructuring.

In addition, the company has secured interim debtor-in-possession financing (DIP) from its senior lender in order to allow the company to continue its operations during the restructuring process and implement the necessary restructuring measures.

The company's management remains responsible for the day-to-day operations of the company and that the board of directors remains intact. The company is committed to completing the restructuring process quickly and efficiently.

The company's chief executive officer, Al Moghaddam, noted, "While this is a challenging period for the company, we are still committed to the enterprise, and with our senior lender's support, we believe the company's business can emerge from the CCAA proceedings stronger and more sustainable."

Trading of the common shares of the company on the Toronto Stock Exchange (the TSX) has been halted and it is anticipated that the trading thereof will continue to be halted until a review is undertaken by the TSX regarding the suitability of the company for listing on the TSX.

Further news releases will be provided on an ongoing basis throughout the CCAA proceedings as required or determined appropriate by the company. Documents relating to the restructuring process such as the initial order, the monitor's reports to the court as well as other court orders and documents shall also be published and made accessible on the monitor's website.

About Valeo Pharma Inc.

Valeo Pharma is a Canadian pharmaceutical company dedicated to the commercialization of innovative prescription products in Canada with a focus on respiratory/allergy, ophthalmology and hospital specialty products. Headquartered in Kirkland, Que., Valeo Pharma has all the required capabilities and the full infrastructure to register and properly manage its growing product portfolio through all stages of commercialization.

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