Mistral Pharma Files a Proposal Under the Bankruptcy and Insolvency Act

  Mistral Pharma Inc. (TSX VENTURE: MIP) (the "Corporation") announced that it has filed a proposal under the Bankruptcy and Insolvency Act (Canada) (the "BIA"). If ratified, the proposal shall effect a compromise of the Corporation's debts existing at June 13, 2008, and effect an arrangement under Section 191 of the Canada Business Corporation's Act. Demers Beaulne Inc. has agreed to act as trustee to Mistral's proposal.

The proposal contemplates the investment of fresh funds by a third-party in the Corporation in exchange for the cancellation of all of the Corporation's issued and outstanding shares, options and warrants (the "Existing Shares"), and the issuance of new shares in favour of the investor. The sums to be received from the investor will serve to fund the payments provided for under the Corporation's proposal, and provide the Corporation with the working capital it needs to meet its current operating requirements. A meeting of the Corporation's creditors will be held on September 4, 2008 to vote on the proposal. Should the creditors approve the proposal in the required percentages, a hearing will be held on September 15, 2008 and the Superior Court of Quebec will be asked to ratify the proposal and authorize the arrangement, which will cancel the Existing Shares.

In order to be accepted by its creditors, the Corporation's proposal needs to be approved by a majority in number of the creditors voting on the proposal, representing 66.66% in value of those creditors' claims.

Forward-looking Statements

Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of Mistral Pharma. These statements are based on assumptions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for Mistral Pharma's products, the impact of price pressures exerted by competitors, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.

Contacts: Mistral Pharma Inc. Bertrand F. Bolduc, B.Pharm., MBA President and Chief Executive Officer 514-421-1717 #2224 [e-mail] Mistral Pharma Inc. Alain Provencher, CA, CF Vice-President and Chief Financial Officer 514-421-1717 #2222 [e-mail]