Labopharm amends debt facility agreement with Hercules



    - Company Improves Financial Flexibility -

    LAVAL, QC, June 25 /CNW/ - Labopharm Inc. (TSX: DDS; NASDAQ:   DDSS) today
announced it has amended its debt facility agreement with Hercules Technology
Growth Capital, Inc. (NASDAQ:   HTGC).
    Based on regulatory approval and recent launch of its once-daily tramadol
product in the United States, the Company has been able to establish more
favourable repayment terms. Under the amended agreement, Labopharm has
extended the date required to begin repaying the loan to July 1, 2010 from
July 1, 2009, and the maturity date of the loan has been extended to June 1,
2012 from December 1, 2011. In consideration of the revised repayment terms,
Labopharm will not draw down the remaining US$5 million of the US$25 million
facility.
    The amended agreement provides Labopharm with greater financial
flexibility as the Company continues to transition to a commercial entity. The
amendments will result in lower interest expense in 2009 and will provide
additional liquidity through 2010 and 2011, strengthening the Company's
balance sheet as commercial sales of its once-daily tramadol product increase
following the recent U.S. launch. The remaining portion of the Warrant granted
to HTGC under the terms of the original agreement vested at the completion of
the amendment. All other terms of the agreement remain unchanged.
    Labopharm also announced that it has entered into a $2.6 million credit
facility with the National Bank of Canada (the "ABCP Facility"). This
facility, which has a term of three years, is in furtherance of a previously
announced agreement with the National Bank of Canada to borrow an amount of up
to 45% of the principal value of the notes issued to the Company in the
context of the restructuring of the Canadian asset-backed commercial paper,
which amount the Company can, under certain conditions, repay at maturity by
delivering the notes to the bank.

    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, among others. The Company's second
product, a novel formulation of trazodone for the treatment of major
depressive disorder, is under regulatory review by the FDA. The Company also
has a robust 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. The Company disclaims any obligation to update
these forward-looking statements.





For further information:

For further information: At Labopharm: Mark D'Souza, Senior
Vice-President and Chief Financial Officer, Tel: (450) 686-0207; At The
Equicom Group: Jason Hogan, Media and Investor Relations, Tel: (416) 815-0700,
jhogan@equicomgroup.com; French: Joe Racanelli, Tel: (514) 844-7997,
jracanelli@equicomgroup.com

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LABOPHARM INC.

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