08.22.2008

PharmaGap Closes $1.1 million Public Portion of Anticipated $2.6 million Equity Financing; Announces Full Clinical Development Group to Take Lead Cancer Drug into Human Clinical Trials

Ottawa, Ontario/August 22, 2008 – PharmaGap Inc. (TSX-V: GAP) (“PharmaGap” or “the Company”) today announced it has completed its previously announced offering of brokered equity securities for gross proceeds totaling $1,094,361. Investors purchased from the Company a total of 7,295,740 equity units (the “Units”) at $0.15 per Unit, with each Unit consisting of one (1) common share and one (1) two-year purchase warrant at $0.20 per common share. Net proceeds from the brokered offering totaled $919,753. Additionally 729,574 broker-warrants were issued to the Agents. Proceeds from this offering will be used to further clinical development of the Company’s novel cancer compounds, business development and for general corporate purposes. Following the closing the total common shares issued and outstanding in the Company are 45,402,333. The issue of units is subject to final approval by the TSX Venture Exchange.

The brokered offering of Units was first announced on June 19, 2008 and subsequently updated on August 14, 2008. The Company’s financial advisors, Dundee Securities Corporation and Wellington West Capital Inc. (the “Agents”), with Capital Street Group of Vancouver acting as a Special Selling Group member, placed 7,295,740 Units with investors for gross aggregate proceeds of $1,094,361.

The Company expects to complete the $1,555,395 non-brokered private placement with SC Stormont Holdings Inc. (“Stormont”), as announced on August 14, 2008, within the next few weeks subject to completion of documentation and approval of the TSX-V.

PharmaGap is also very pleased to announce that it has finalized the enrollment for its Clinical Development Group, an advisory team of experienced drug development professionals that has been tasked by the Company to direct and implement the program required to receive regulatory approval by the U.S. Food and Drug Administration to initiate human testing of the Company’s lead cancer drug compound (PhG-alpha-1). The Company anticipates filing an application to initiate human testing by 2010.

As first announced on June 6, 2008 the Clinical Development Group will be headed up by Dr. David Barnes, an experienced drug development and regulatory affairs consultant based in Ottawa and who will liaise closely with PharmaGap’s management and scientific team lead by Dr. Jenny Phipps.  Other members of the Clinical Development Group are:

• Dr. Doug Cowart, Baltimore, MD – pharmacology
• Dr. Gary Schwartz, New York, NY – clinical oncology
• Dr. Russell Blacher, San Francisco, CA – peptide chemistry
• Dr. John Dillberger, Nashville, IN – toxicology
• Dr. Doug McNair, Kansas City, KN – biomedical statistics
• Dr. Peter Tomlinson, Toronto, ON – oncology

Robert McInnis, President & CEO of PharmaGap commented, “I am very pleased to announce the close of the public portion of our equity financing. Despite a very challenging financing environment in Canada over the past two months following the announcement of the equity offering, we were gratified by the investor support we received. With proceeds now in place, we are ramping up our newly formed Clinical Development Team so as to accelerate the steps necessary to receive eventual regulatory approval to test our lead cancer drug compound in humans. I am delighted with the make-up of this world-class drug development team and I believe it serves as confirmation of the value potential that we see in our drug program.”

During the course of the clinical development program the Company will continue to develop its pipeline of future drug compounds, and to generate business development opportunities aimed at securing a development partnership, licensing or similar arrangement for PhG-alpha-1 with an established pharmaceutical or biotech company aimed at bringing both additional financial and drug development depth to the program.

About PharmaGap Inc.
PharmaGap Inc. (TSX-V: GAP), based in Ottawa, ON, is a biotechnology company with a core focus on developing novel therapeutic compounds for the treatment of cancer. PharmaGap's research platform targets cellular signalling pathways controlled by Protein Kinase C (PKC) isoforms. PharmaGap's lead drug compound, PhG-alpha-1, is in preclinical development and targets PKC alpha. The Company's strategy is to out-license drug compounds to larger life sciences companies at the preclinical stage. For more information on PharmaGap please visit the Company's website at www.pharmagap.com.

For information relating to this Release, please contact:
Robert McInnis, President & CEO
(613) 990-9551 bmcinnis@pharmagap.com

Note: The TSX-Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. No Securities Commission or other regulatory authority having jurisdiction over PharmaGap has approved or disapproved of the information contained herein. This release contains forward looking statements that may not occur or may change materially. Unless otherwise required by applicable securities laws, PharmaGap disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.