Ambrilia Biopharma and Merck & Co., Inc. Sign Licensing Agreement Granting Merck Worldwide Rights to Ambrilia's HIV/AIDS Protease Inhibitor Program

Ambrilia Biopharma Inc. (TSX: AMB), a biopharmaceutical company developing innovative therapeutics in the fields of cancer and infectious diseases, and Merck & Co., Inc., one of the world's leading pharmaceutical companies, announced today that Ambrilia has entered into an exclusive licensing agreement granting Merck - through an affiliate - the worldwide rights to Ambrilia's HIV/AIDS protease inhibitor (PI) program.

Under the terms of this agreement, Ambrilia grants Merck the exclusive worldwide rights to its lead compound, PPL-100, which has completed a Phase I single-dose pharmacokinetic study and is currently in a Phase I repeat dose pharmacokinetic study. In return Ambrilia receives an upfront licensing fee of $US 17 million on signing and is eligible for cash payments totaling up to $US 215 million upon successful completion of development, clinical, regulatory and sales milestones, and royalties on all future product sales. The first of the milestone payments ($US 3 million) will be based on the successful completion of a Phase I repeat dose pharmacokinetic study, the results of which are expected in late November. Once the Phase I repeat dose pharmacokinetic study is completed, Merck will assume all subsequent development costs related to PPL-100.

Ambrilia also stands to receive significant additional milestone-based cash payments and royalties on the future development and commercialization of each back-up compound and/or related compounds developed by Merck and which fall within the scope of the Ambrilia PI program.

"We are very pleased to partner on PPL-100 with Merck, a company that has been a leader in anti-HIV drug development, and are confident that Merck will successfully advance the development of PPL-100," said Hans J. Mader, President and Chief Executive Officer of Ambrilia. "This agreement is a significant milestone for Ambrilia; an influx of potentially over $CDN 22 million in 2006 allows the Company to be much stronger financially and provides us with the opportunity to allocate the necessary resources to further progress the development of our other technologies and product candidates."

"Merck has been a world leader in the fight against HIV/AIDS for two decades, and this agreement is a further demonstration of our continuing commitment to this field of medicine," said Merv Turner, Ph.D., Senior Vice President, Worldwide Licensing and External Research. "PPL-100 and Ambrilia's Protease Inhibitor Program represent a potentially significant advancement for patients and physicians in the treatment of HIV/AIDS."

CONFERENCE CALL INFORMATION

Ambrilia will be hosting a conference call on October 12, 2006 at 9:30 a.m. ET, to discuss its licensing agreement with Merck & Co., Inc. Interested parties may access the conference call by way of telephone or webcast. The numbers to access the conference call are 1(866) 250-4910 (toll free) or 1(416) 644-3423 (local). The webcast will be available at: www.ambrilia.com , Investors section, conference calls and webcasts, and will be archived for 365 days. A replay of the call will be available and the numbers to access the replay are 1(416) 640-1917 (local) or 1(877) 289-8525 (toll free) with access code 21206250. The replay will be available starting at 11:30 a.m., October 12, until 11:59 p.m., October 19.

ABOUT PROTEASE INHIBITORS

Protease Inhibitors (PIs) are a key component to the current HIV standard of care, the Highly Active Anti-Retroviral Treatment (HAART) consisting of a cocktail of HIV medicines. Unfortunately, many PIs are associated with side effects, a high pill burden and, as it is the case with all anti-HIV drugs, the development of viral resistance. In addition, the majority of PIs are administered in combination with a small dose of ritonavir, another protease inhibitor that is often used to increase, or boost, the amount of available drug in the system, but which also has the potential to increase adverse events. More than ever, there is a pressing need for better tolerated, more convenient and effective PIs.

ABOUT AMBRILIA BIOPHARMA

Ambrilia Biopharma Inc. (TSX: AMB) is a biopharmaceutical company developing innovative and proprietary early- to mid-stage therapeutics in the fields of oncology and infectious diseases. Ambrilia's product portfolio includes an anti-cancer therapeutic peptide (PCK3145), a novel anti-cancer therapy (TVT-Dox), two oncology specialty generics (Octreotide, Goserelin), the first of which is late-stage and value-added, and promising anti-HIV treatments (PPL-100, Anti-HIV Peptides, Integrase Inhibitor Program). Ambrilia's head office, research and development and manufacturing facilities are located in Montreal with a regional office in France. For more information, please visit the Company's web site: www.ambrilia.com

Ambrilia Forward-looking statement

This press release contains forward-looking statements that reflect the Company's current expectation regarding future events. The forward-looking statements involve risks and uncertainties. Actual events could differ materially from those projected herein and depend on a number of factors including, but not limited to, 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. Such statements are also based on various assumptions, including 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. 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.