09.19.2007

PharmaGap Agreement with Debenture Holders to extend Maturity Date to be modified to comply with TSX-V Regulations

Ottawa, Ontario/ September 19, 2007 – PharmaGap Inc. (TSX-V: GAP) (“PharmaGap” or “the Company”), a Canadian biotechnology company developing novel compounds to treat cancer, today announced that it has agreed on revised terms for the extension of its Convertible Secured Debentures which matured on August 26, 2007 (the “Debentures”) and are held by SC Stormont Holdings Inc. (“Stormont”). The agreement previously announced on August 31, 2007 with all holders of Debentures to extend the maturity date to February 26, 2009 was not fully approved by the TSX Venture Exchange (the “TSX-V”) as it pertains to Debentures held by Stormont, and therefore cannot be implemented in the manner approved by the Board of PharmaGap.

The TSX-V has approved the terms of the extension for Debentures held by arm’s length holders, including the reduction in conversion price from Thirty cents ($0.30) to Seventeen and One-Half cents ($0.175), and a reduction in warrant pricing from Forty-Five cents ($0.45) to Twenty-Six and One-Quarter cents ($0.2625). However, the TSX-V has advised it cannot approve the issuance of warrants on conversion of the Debentures to Stormont, which is a related party to PharmaGap.

The TSX-V has indicated that its policies permit, and Stormont has agreed to accept, revised terms of the Debentures held by it providing for a reduction in the conversion price to Thirteen Cents ($0.13), however no warrants will be provided on conversion of the Debentures. Previously, warrants were granted on conversion of the Debentures on a 1:1 basis with shares, at an exercise price of Forty-Five ($0.45) and Forty-Eight and Three-Quarters ($0.4875).

Stormont has agreed to enter into a forbearance agreement with PharmaGap in respect of the Debentures in order to provide PharmaGap and Stormont with sufficient time to implement the revised transaction described above. The forbearance agreement suspends enforcement of security in respect of the Debentures until October 15, 2007, at which time the revised transaction is expected to be complete.

The revise terms with Stormont are subject to final approval by the TSX-V.

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 signaling pathways controlled by protein kinase C (PKC) isoforms. PharmaGap's lead drug compound, PhGalpha1, is in preclinical development. The Company's strategy is to out-license drug compounds to larger life sciences companies at the preclinical stage. For more information 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.