Pacgen Announces Private Placement Financing

Vancouver, BC, Canada (January 30, 2009) – Pacgen Biopharmaceuticals Corporation (“Pacgen” or the “Company”) (TSX-V: PGA) announced today that it intends to offer, through one or more tranches of closings of a non-brokered private placement, convertible debentures in an aggregate principal amount of up to approximately C$610,000 (the “Offering”). Pacgen expects to complete the first tranche of the Offering upon the satisfaction of certain conditions, including the approval of the TSX Venture Exchange. Subject to adjustment based on the closing date exchange rate for subscription proceeds received in U.S. dollars, the first tranche of the Offering is expected to be for an aggregate principal amount of approximately C$360,000.

The convertible debentures will mature one year from the date of issuance, and will bear interest from the date of issuance at a rate of prime plus 4% per annum. The principal amount under the convertible debentures plus any accrued interest will be repayable in cash or convertible, at the option of the holder, into units of the Company (the “Units”) at a conversion price of C$0.10 per Unit. Each Unit will consist of one common share of the Company (a “Common Share”) and one common share purchase warrant (a “Warrant”), each Warrant entitling a non-insider holder to purchase one Common Share at an exercise price of C$0.10 per Common Share at any time prior to 24 months following the date of issuance of the Warrant upon conversion of the convertible debenture. The Warrants comprising the Units issuable upon conversion of convertible debentures issued to insiders of the Company will expire upon the earlier of the maturity date of the convertible debentures and the date that is 24 months following date of issuance of the Warrants upon conversion of the convertible debentures.

The convertible debentures and the securities issuable upon conversion of the convertible debentures will be subject to a four month hold period from the closing dates of the Offering pursuant to the policies of the TSX Venture Exchange and Canadian securities legislation.

The proceeds of the Offering will be used by the Company for working capital to support business development activities and for general corporate purposes.

Insiders of the Company intend to participate in the first closing of the Offering for an aggregate principal amount of C$240,000, constituting two-thirds of the first tranche of the Offering. The participation by insiders in the Offering will constitute a “related party transaction” pursuant to the policies of the TSX Venture Exchange. However, the Offering is exempt from applicable formal valuation and minority shareholder approval requirements as neither the fair market value of the securities nor the consideration paid by such insiders for the convertible debentures exceeds 25% of the market capitalization of the Company. The material change report in respect of the Offering will not be filed at least 21 days in advance of the closing of the Offering due to the need for timeliness in completing the Offering given current market conditions.

The Company considers the shortened timeframe to be reasonable under these circumstances. The completion of the Offering is subject to certain conditions, including the approval of the TSX Venture Exchange.

This press release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the U.S. Securities Act of 1933 or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act of 1933 and applicable state securities laws or an exemption from such registration is available.

About Pacgen

Pacgen is a life sciences company focused on the development of therapeutics for the treatment of infectious and inflammatory diseases. Pacgen’s current development efforts are focused on PAC-113, an anti-fungal for the treatment of oral candidiasis and PAC-G31P, a novel peptide therapeutic designed to treat inflammatory diseases characterized by non-beneficial neutrophil.

PAC-113 is a 12 amino-acid antimicrobial peptide derived from a naturally occurring histatin protein found in saliva. This peptide alters the permeability of fungal cell membranes causing cell death. In June 2008, Pacgen announced positive results from its Phase IIb clinical trial demonstrating that PAC-113 is effective in the treatment of oral candidiasis and compares favourably to the efficacy demonstrated by Nystatin, a current standard of care. PAC-G31P is a small recombinant protein that is a synthetic analogue of the human cytokine called Interleukin-8 which is the key chemokine involved in neutrophil recruitment. PAC-G31P is currently being investigated in preclinical studies for its potential to treat inflammatory diseases characterized by non-beneficial neutrophil. For additional information, please visit


Forward looking Statements

Certain statements included in this press release may be considered forward-looking. Statements relating to, among other things, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments constitute forward-looking statements. All forward-looking statements are based on Pacgen’s current beliefs and expectations as well as assumptions relating to the successful completion of its clinical trials and pre-clinical studies, the time and process required to obtain regulatory approval for commercialization of its product, the ability of Pacgen to raise additional capital in future on favourable terms, the impact of competitive products and pricing in the market, new product development, and the successful and timely completion of corporate collaborations or licensing arrangements for its research programs. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. Such factors include, among others, our stage of development, lack of product revenues, additional capital requirements, risk associated with completion of clinical trials and obtaining regulatory approval, dependence on collaborative partners, and our ability to protect our intellectual property.

Wherever possible, words such as “anticipate”, “believe”, “expect”, “may”, “could”, “will”, “potential”, “intend”, “estimate”, “should”, “plan”, “predict”, “project” or the negative or other variations of such expressions reflect Pacgen’s current beliefs and assumptions and are based on the information currently available to Pacgen. Certain risks and uncertainties, including those risk factors identified by Pacgen in its annual information form dated July 31, 2008, may cause our actual results, level of activity, performance or achievements to differ materially from those implied by forward looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made only as of the date of this press release. Pacgen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For all forward-looking statements, Pacgen claims the safe harbour for forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995

For further information contact:

Christina Yip
Chief Financial Officer
Tel: 604-629-3383

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