10.21.2009

PharmaGap Announces Completion of Securities Lending Arrangements with Stormont.

Ottawa, Ontario/October 21, 2009 – PharmaGap Inc. (TSX-V: GAP; OTC.BB: PHRGF) (“PharmaGap” or “the Company”) today advises that the Securities Lending Agreements (“SLA”) between SC Stormont Holdings Inc. (“Stormont”) and subscribers to the 5,387,000 PharmaGap Equity Units issued on June 17, 2009 (the “Private Placement”) have been satisfied in full.

Pursuant to these arrangements, Stormont committed to lend up to 13,125,000 freely trading common shares of PharmaGap held by it to subscribers in the Private Placement, repayable by the subscriber to Stormont in the form of freely tradable shares on the conclusion of the 4 month hold period on October 19, 2009. The total amount made available by Stormont included common shares issued directly and for issuance if all warrants in the Private Placement were exercised.

The effect of the SLAs was to restrict sale of shares held by Stormont for four months and to allow subscribers for equity units from treasury of PharmaGap to trade an equal number of common shares received from Stormont. This agreement was put in place after consulting with the TSX Venture Exchange.  

Since June 17, 2009, a total of 6,757,060 common shares were lent to subscribers by Stormont, and were reported by Stormont as dispositions in the market in regulatory filings. These 6,757,060 common shares have now been repaid to Stormont, and will accordingly be reflected in regulatory filings as an acquisition of shares, as prescribed. 

Mr. Rod Bryden, Chairman of both PharmaGap and Stormont, stated that “I am very pleased that I was in a position to enable PharmaGap to complete the issuance of shares and warrants in very difficult market conditions by adding the incentive of freely trading shares, by restricting sale of shares held by my company Stormont . I have full confidence in PharmaGap, as shown over the past 4 years of my involvement, and the confirmatory testing so far at the U.S. National Cancer Institute and at the Ottawa Hospital Research Institute has supported that confidence. I am less happy that I have had to reduce my holdings in PharmaGap recently, however this has been necessitated in order to meet obligations of Stormont originally entered into to provide funding to PharmaGap.”

An additional 1,139,095 shares were made available to subscribers of 717,000 PharmaGap Equity Units issued on July 16, 2009 by Stormont in a second closing of the Private Placement under further SLA. These shares are scheduled to be returned to Stormont on November 19, 2009

About SC Stormont Holdings Inc.
SC Stormont Holdings Inc. is a holding company principally owned by Roderick M. Bryden, which currently holds 20,692,493 Common Shares, (23.1%) of PharmaGap and is PharmaGap’s largest shareholder.

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.