Ondine Raises C$0.9 Million

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 24, 2009) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES

Ondine Biopharma Corporation (the "Company" or "Ondine") OBPOBP, a medical technology company developing photodisinfection based products, today announced it has received cash of C$920,000 from the closing of two transactions.

The Company has completed a private placement (the "Placement") for gross proceeds of C$0.4 million, consisting of 8,000,000 units issued at a price of C$0.05 per unit (a "Unit") to qualified investors pursuant to applicable exemptions. Each Unit consists of one common share of the Company and one share purchase warrant (a "Warrant") entitling the holder to acquire one common share of the Company at an exercise price of C$0.05 until December 23, 2010.

An application has been made for the 8,000,000 common shares issued under the Placement to be admitted to trading on AIM ("Admission"), and Admission is expected to occur on or about December 30, 2009. The common shares issued as part of the Units and the common shares issuable on exercise of the Warrants are subject to a hold period in Canada expiring April 24, 2010.

The Company has also received cash proceeds of C$520,000 (US$496,000) from the sale of its remaining 18,042 Ordinary Shares investment in Grafton Resource Investments Ltd (the "Grafton Fund"), which the Company acquired as part of a share exchange transaction with the Grafton Fund earlier this year.

The funds raised will be used for the continued research and development of the Company's platform photodisinfection technology products, including the Company's MRSAid(TM) nasal decolonization system, its in situ endotracheal tube disinfection system, as well as for working capital and general corporate purposes.

Ms. Carolyn Cross, Ondine's Chairman and CEO, participated in the Placement, purchasing 1,500,000 Units (18.75% of the total units subscribed for in the Placement). Ms. Cross, members of her immediate family and the Courthill Foundation, a charitable foundation in which Ms. Cross and her husband are directors, have a beneficial interest in an aggregate of 18,221,133 common shares, which represents 16.48% of the Company's 110,548,457 issued and outstanding common shares (the "Enlarged Share Capital") immediately following the closing of the Placement (19.70% assuming exercise of 975,000 stock options and 3,469,091 warrants held by Ms. Cross).

Ms. Margaret Shaw, a director of the Company, participated in the Placement, purchasing 200,000 Units (2.5% of the total units subscribed for in the Placement). Ms. Shaw has a beneficial interest in 412,940 commons shares (0.37%) of the Enlarged Share Capital.

Mr. Colin Watt, a director of the Company, participated in the Placement, purchasing 200,000 Units (2.5% of the total units subscribed for in the Placement). Mr. Watt has a beneficial interest in 200,000 common shares (0.18%) of the Enlarged Share Capital.

Other insiders of the Company participated in the Placement, to the maximum normally allowed without securityholder approval under the rules of the TSX, by purchasing a combined total of 380,000 Units (4.75%) of the total units subscribed for in the Placement.

The sale of the Units to insiders constitutes a "related party transaction" pursuant to Canadian securities regulation. However, the transaction is exempt from applicable formal valuation and minority shareholder approval requirements as neither the fair market value of the Units issued to insiders nor the consideration paid by such insiders for the Units exceeds 25% of the market capitalization of the Company. The material change report in respect of this transaction was not filed at least 21 days in advance of the closing of the Placement as the Company was in need of the funds. The Company considers the shortened timeframe to be reasonable under these circumstances.

Ms. Cross's, Ms. Shaw's and Mr. Watt's participation in the Placement constitutes a related party transaction for the purposes of the AIM Rules for Companies (the "Related Party Transactions"). Accordingly, the directors of the Company (excluding Ms. Cross, Ms. Shaw, and Mr. Watt), having consulted with its nominated adviser, consider the terms of the Related Party Transactions to be fair and reasonable insofar as the Company's shareholders are concerned.

The total number of voting rights attached to the Enlarged Share Capital on the basis of one vote per common share is 110,548,457. This voting rights figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, the Company under the Disclosure and Transparency Rules of the Financial Security Authority (FSA) in the United Kingdom.

About Ondine Biopharma Corporation

Ondine is developing non-antibiotic therapies for the treatment of a broad spectrum of bacterial, fungal and viral infections. The Company is focused on developing leading edge products utilizing its patented light-activated technology. Photodisinfection provides broad-spectrum antimicrobial efficacy without encouraging the formation and spread of antibiotic resistance. The Company is based in Vancouver, British Columbia, Canada, with a research and development laboratory in Bothell, Washington, USA. For additional information, please visit the Company's website at: www.ondinebiopharma.com.

Forward-Looking Statements:

Certain statements contained in this release containing words like "believe", "intend", "may", "expect" and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in the Company's forward-looking statements include the following: market acceptance of our technologies and products; our ability to obtain financing; our financial and technical resources relative to those of our competitors; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain and develop partnership opportunities; the timing of commercial product launches; the ability to achieve key technical milestones in key products and other risk factors identified from time to time in the Company's public filings.

THIS PRESS RELEASE, PROVIDED PURSUANT TO APPLICABLE CANADIAN REQUIREMENTS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER OF THE SECURITIES DESCRIBED HEREIN. THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS ABSENT REGISTRATION OR APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.