Osta Biotechnologies Announces $504,000 Bought Deal Private Placement

Osta Biotechnologies Inc. (TSX VENTURE:OBI)

THE ISSUE OF THIS PRESS RELEASE IS LIMITED TO CANADA ONLY. THIS PRESS RELEASE
SHOULD NOT BE ISSUED IN THE UNITED STATES THROUGH U.S. NEWS WIRE AGENCIES. 


Osta Biotechnologies Inc. (TSX VENTURE:OBI) is pleased to announce that it has
entered into an agreement with Sherbrooke Street Capital Inc. for a "bough deal"
private placement of 8,400,000 units at a price of $0.06 per unit, for gross
proceeds to Osta of $504,000. Each unit will consist of one common share and
one-half of a common share purchase warrant. Each whole warrant will entitle the
holder to acquire one additional common share at a price of $0.10 for a period
of two years from the closing of the private placement. The issue price of $0.06
was negotiated by Osta and Sherbrooke Street Capital in the context of the
market.


Sherbrooke Street Capital intends to arrange for purchasers of the units in
Canada on a prospectus-exempt basis. Closing of the private placement is
expected to occur shortly.


In connection with the private placement, Sherbooke Street Capital will receive
a fee equal to 7% of the gross proceeds of the offering. In addition, Osta will
issue non-transferable broker warrants to Sherbooke Street Capital, entitling it
to purchase a number of common shares of Osta equal to 7% of the number of units
sold pursuant to the private placement. The broker warrants will be exercisable
at a price of $0.10 per common share for a period of two years from the closing
of the private placement.


The private placement is subject to regulatory approval, including that of the
TSX Venture Exchange, and the signing of a definitive Underwriting Agreement
between Osta and Sherbrooke Street Capital.


The securities issued in connection with the private placement will be subject
to a four-month hold period under the policies of the TSX Venture Exchange and
applicable securities legislation.


The net proceeds from the private placement will be used by Osta for research
and development, as well as for working capital and general corporate purposes.


Osta would also like to confirm that, due to market conditions, it has decided
not to proceed with the previously-announced $2.5 million private placement (see
press release dated February 9, 2010).


About Osta Biotechnologies Inc.

Osta is a biopharmaceutical company listed on the TSX Venture Exchange currently
focusing on developing therapeutics for Cancer and Alzheimer's disease.