BIOPHAGE PHARMA (fka BIPMF)

[Ubertino]

Biophage signs manufacturing agreement and completes a private equity financing

Thursday August 31, 7:59 am ET

Company intends not to enter into additional financings until stronger share price

MONTREAL, Aug. 31 /CNW Telbec/ - (TSX.V: BUG) Biophage Pharma Inc. ("Biophage") is pleased to announce that it has entered into an agreement with Indus Instruments Houston, Texas ("Indus"), and International Science Consulting, LLC West Haven, Connecticut, ("ISC"), for the development and manufacturing of a new generation of PDS(R) biosensors. Biophage also announces that it has closed a private placement of 5,965,861 units of Biophage, announced by way of press release on July 12, 2006 for gross proceeds of $483,590. Each unit is composed of one common share and one non-transferable warrant; and each warrant entitles its holder to one common share for a price of $0.12 per share until August 30, 2008. The common shares, the warrants and the underlying common shares have a four-month resale restriction. ISC has received, as compensation for its services in the context of the private placement, 394,658 common share purchase warrants exercisable at a price of $0.12 per share until August 30, 2008.

Dr Mandeville, President and CEO of Biophage commented, "We are very excited with the development and design of the new PDS(R) biosensor. This is the culmination of years of research. We anticipate entering the market with these products over the coming months". Dr Mandeville continued, "We have now closed the rounds of financing previously announced. It is management's intention not to enter into any additional financings until Biophage's value is better understood and we have a stronger share price. We will now concentrate on increasing our sales and building value for our shareholders."

About Biophage Pharma Inc.

Biophage Pharma is a high potential, revenue-driven Canadian biotechnology company focused on the development of novel phage-based technologies for the detection and management of live pathogens. Founded in 1995, Biophage Pharma has well advanced phage therapy program for the management of bacterial infections and completed the development of its first prototype PDS(R) Biosensor which is entering in the pre-commercialization stage. Biophage also operates a profit center (Immunotox Labs) that provides services in Immunogenicity and Immunotoxicity, in Beryllium sensitivity testing and MELISA(R) testing for the detection of allergy to more than 20 different metals and a very large number of allergens like penicillin and pollens. (http://www.biophagepharma.com ; http://www.immunotoxlabs.com ).


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For further information

Biophage Pharma Inc: Rosemonde Mandeville, M.B., Ch.B., PhD, President and Chief Executive Officer, [phone], [e-mail]
ImmunotoxLabs: Division Biophage Inc, Miguel Retamal, Directeur, [phone], [e-mail]
Renmark Financial Communications Inc.: Christine Stewart: [e-mail]
Christina Lalli: [e-mail]
[phone], Fax: [phone], http://www.renmarkfinancial.com

Source: BIOPHAGE PHARMA, INC.