SAN DIEGO – September 22, 2005 – Verus Pharmaceuticals, Inc., a pediatric-oriented company dedicated to identifying, developing and delivering solutions to address the unmet medical needs of children and those who care for them, today announced that Paladin Labs Inc. (TSX: PLB), a leading Canadian specialty pharmaceutical company, has launched Twinject® in Canada. Twinject, a novel epinephrine auto-injector indicated for the emergency treatment of severe allergic reactions (anaphylaxis), is the first and only product approved by Health Canada that contains two doses of epinephrine in a single device. On July 27, 2005, Verus announced it had entered into an exclusive agreement with Paladin Labs to commercialize Twinject in Canada.

“The dual-dose capability of Twinject addresses an unmet medical need and may save lives,” said Jonathan Ross Goodman, President and CEO of Paladin Labs. “Published studies have demonstrated that more than one dose of epinephrine may be required in up to 36 percent of the anaphylactic episodes to properly address the reaction, with the second dose often needed within 5-10 minutes after the first dose. As such, we are very excited to be bringing this novel product line to the more than 600,000 Canadians at risk for anaphylaxis.”

“We are confident that Paladin Labs will be able to build a leadership position for Twinject in the Canadian market,” said Robert W. Keith, President and Chief Operating Officer of Verus. “With the North American launch now underway, we will focus our expansion efforts on securing commercial partners for Twinject in ex-North American markets.”

About Anaphylaxis

Anaphylaxis is a severe, life-threatening systemic allergic reaction triggered by exposure to one or more various antigens, including foods, insect stings, drugs, and latex products. Up to 43 million people in the U.S. alone are at risk for anaphylactic episodes, and underlying incidence rates are expected to continue increasing in future years. Up to eight percent of children have food allergies, with allergies to peanuts and tree nuts among children having doubled in the past five years. The timing, location, pattern (including onset, severity and length) and specific treatment requirements for each future anaphylactic episode cannot be predicted in advance.

According to IMS Health, the U.S. self-administered treatment market was $125 million in 2004, and has grown at an average annual compounded rate of 25 percent per year for the last five years. More information about Twinject is available on the company’s Twinject website at www.twinject.com.

About Paladin Labs

Paladin Labs, headquartered in Montreal, Canada, is a leading specialty pharmaceutical company focused on developing, acquiring or in-licensing innovative pharmaceutical products for the Canadian market. With this strategy, a focused national sales team and proven marketing expertise, Paladin has evolved into one of Canada’s leading specialty pharmaceutical companies. Paladin’s shares trade on the Toronto Stock Exchange under the symbol PLB. For more information about Paladin, please visit the Paladin Web Site at www.paladinlabs.com.

About Verus

Verus Pharmaceuticals is dedicated to improving the lives of children and those who care for them. Verus is building a portfolio of products for the unmet medical needs of children through acquisitions and alliances, with an initial focus on the treatment of asthma, allergies, and related diseases and conditions. Verus is differentiated by its pediatric orientation and its strong financial position and experienced management team, which allows the company to capitalize on an extensive network to build its product portfolio and pursue complementary transactions. The company’s rigorous, disciplined approach to strategic decision-making and core competencies in development and commercialization is expected to provide significant value to its partners. More information about Verus is available on the company’s corporate website at www.veruspharm.com.

Forward-Looking Statements

Verus Pharmaceuticals cautions you that statements included in this press release that are not a description of historical facts may be forward-looking statements. The inclusion of forward-looking statements should not be regarded as a representation by Verus that any of its plans will be achieved. Actual results may differ materially from those set forth in this press release due to the risks and uncertainties inherent in Verus’ business including, without limitation, statements about: its ability to identify appropriate acquisition, licensing, or co-development and/or promotion candidates in the future or be able to take advantage of the opportunities it identifies; difficulties or delays in developing, obtaining regulatory approval, manufacturing and commercializing its products; unexpected performance or side effects of its products that could delay or prevent development or commercialization, or that could result in recalls or product liability claims; the scope and validity of patent protection for its products; competition from other pharmaceutical companies; and its ability to obtain additional financing to support its operations. All forward-looking statements are qualified in their entirety by this cautionary statement and Verus undertakes no obligation to revise or update this press release to reflect events or circumstances after the date hereof.