Ambrilia Biopharma Inc. Obtains Fifth Extension of CCAA Stay Order, Court Approval of Amendment to Proposed Transaction and Provides Bi-Weekly Status Update

MONTREAL, QUEBEC--(Marketwire - May 26, 2010) - Ambrilia Biopharma Inc. (TSX: AMB) announced today that it obtained today a fifth order from the Superior Court of Quebec (Commercial Division) (the “Court”) extending in its effect the initial order issued by the Court on July 31, 2009 covering Ambrilia and Cellpep Pharma Inc., its subsidiary, until September 30, 2010, the whole pursuant to the Companies’ Creditors Arrangement Act (Canada) (“CCAA”). The purpose of this extension is to provide Ambrilia with an opportunity to develop and file a plan of arrangement for consideration by its creditors and to complete its restructuring process.

Ambrilia also announced that the Court approved today an amendment to the proposed transaction announced on April 7, 2010 and approved by the Court on April 14, 2010, whereby Ambrilia and Cellpep would receive additional non-dilutive financing through the disposition of a limited partnership interest, which could have resulted in them realizing a gain, before expenses, of approximately $4M. Under the terms of the amendment, Ambrilia and Cellpep could realize a gain of approximately $2M from the initial phase of the transaction, with the possibility of realization of an additional gain of approximately $2M on the closing of the transaction, subject to the exercise of an option by a third party. The above amounts are before expenses to be incurred in connection with the transaction. There is no assurance that such transaction will be completed.

Ambrilia also is providing today its bi-weekly Default Status Report under National Policy 12-203 - Cease Trade Orders for Continuous Disclosure Defaults (“Default Status Report”).

On May 12, 2010, Ambrilia announced that the filing of its interim financial statements, management’s discussion and analysis and related CEO and CFO certifications for the first quarter ended on March 31, 2010, will be delayed beyond the filing deadline of May 15, 2010.

On April 1, 2010, Ambrilia had announced that the filing of its 2009 audited financial statements, annual management’s discussion and analysis, related CEO and CFO certifications and its annual information form, was being delayed beyond the filing deadline thereof.

On November 16, 2009, Ambrilia had previously announced that the filing of its interim financial statements, management’s discussion and analysis and related CEO and CFO certifications for the third quarter ended on September 30, 2009, was being delayed beyond the filing deadline thereof.

On August 11, 2009, Ambrilia had previously announced that the filing of its interim financial statements, management’s discussion and analysis and related CEO and CFO certifications for the second quarter ended on June 30, 2009, was being delayed beyond the filing deadline thereof.

Other than the information set out above, Ambrilia reports that, since its most recent default announcement on May 12, 2010, there have not been any material changes to the information contained therein, or any failure by Ambrilia to fulfill its intentions with respect to satisfying the provisions of the alternative information guidelines, and there have been no additional defaults subsequent to such announcement. Further, there has been no additional material information concerning Ambrilia and its affairs since its last bi-weekly Default Status Report dated May 12, 2010, that has not been disclosed. Ambrilia intends to file, if required, its next Default Status Report by June 9, 2010.

Ambrilia has been operating under the protection of the CCAA since July 31, 2009.

Any recovery for creditors and other stakeholders, including shareholders, is uncertain and is highly dependent upon a number of factors, including the outcome of Ambrilia proceedings under the CCAA.

About Ambrilia Biopharma Inc.

Ambrilia Biopharma Inc. (TSX: AMB) is a biotechnology company focused on the discovery and development of novel treatments for viral diseases and cancer. The Company’s strategy aims to capitalize on its broad portfolio and original expertise in virology. Ambrilia’s product portfolio is comprised of oncology and antiviral assets, including two new formulations of existing peptides for cancer treatment, a targeted delivery technology for cancer, an HIV protease inhibitor program as well as HIV integrase and entry inhibitors, Hepatitis C virus inhibitors and anti-Influenza A compounds. Ambrilia’s head office is located in Montreal. For more information, please visit the Company’s web site: www.ambrilia.com.

The Company is currently subject to court protection under the CCAA.

Ambrilia’s forward looking statements

This press release contains forward-looking statements that reflect the Company’s current expectation regarding future events. There is a risk that expectations and forward looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on these forward-looking statements as they involve risks and uncertainties, which could make actual results differ materially from those projected herein and depend on a number of factors including, but not limited to, the timing and continuance of the CCAA protection, the uncertainty involved in the court proceedings and the implementation of any plan of arrangement under the CCAA, changing market conditions, successful and timely completion of clinical studies, uncertainties related to the regulatory approval process, establishment of corporate alliances and other risks detailed from time to time in the Company’s filings. We refer you to the Risk Factors section of the Company’s annual information form which contains a more exhaustive analysis of the risks and uncertainties that are generally connected to the business of the Company. Such statements are also based on various assumptions, including the successful emergence from the insolvency proceedings, the successful and timely completion of clinical studies on Ambrilia’s products demonstrating efficacy and safety for human use, their successful commercialization within the forecasted timelines and the attainment of the forecasted milestone payments and other revenues. Failure to complete a strategic or financial transaction as a result of the review of strategic alternatives could have a material adverse effect on Ambrilia. While Ambrilia anticipates that subsequent events and developments may cause Ambrilia’s views to change, Ambrilia specifically disclaims any obligation to update these forward looking statements, unless obligated to do so by applicable securities laws.