Labopharm Reacquires UK Sales And Marketing Rights to Its Once-Daily Tramadol Product

    - Company to Engage Contract Sales Organization And Seek New Marketing
    Partner to Promote Product in UK -

    LAVAL, QC, July 7 /CNW/ - Labopharm Inc. (TSX: DDS; NASDAQ:   DDSS) today
announced that it has reacquired the sales and marketing rights to its
once-daily tramadol product (Tradorec XL(R)) for the United Kingdom from
Recordati Ireland Ltd. (Recordati). To promote its product in the UK, the
Company will engage a contract sales organization and pursue a new licensing
and distribution agreement with an appropriate marketing partner.
    "Our once-daily tramadol product is achieving strong market penetration,
particularly in Spain, Italy and Canada, and we believe that this success can
be replicated in the UK with the appropriate sales and marketing effort behind
Tradorec XL(R)," said James R. Howard-Tripp, President and Chief Executive
Officer, Labopharm Inc. "The market for tramadol products in the UK continues
to exhibit strong growth and we are confident in both our product and its
prospects in this market."
    Under its agreement with Recordati to reacquire the UK rights to its
once-daily tramadol product, Labopharm will continue to use the brand name
Tradorec XL(R) in marketing its product. Labopharm will also receive a
(euro)700,000 milestone from Recordati upon termination of Recordati's rights.
    Labopharm is in discussions to finalize an agreement with a contract
sales organization to promote Tradorec XL(R) in the UK. The Company is also in
discussions to establish a licensing and distribution agreement with a new
marketing partner.
    The UK is the second largest European market for tramadol products (on a
standard units basis) and one of the fastest growing of the five largest
European markets for tramadol products (on a standard units basis). The UK
tramadol market has experienced compound annual growth of 18% over the last
five 12-month periods ended March 30.

    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
being commercially launched in key markets globally. 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

    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,; French: Joe Racanelli, Tel: (514) 844-7997,

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