Stellar Pharmaceuticals Agrees to Settle Dispute with European Uracyst Licensee

Under the terms of the settlement agreement the parties have agreed that the license agreement will remain in full force and effect until March 31, 2008. Further, Pohl-Boskamp has agreed to pay Stellar the sum of EUR 200,000, payable in two equal installments of EUR 100,000. The first installment of EUR 100,000 shall be paid on or before September 20, 2007 and the second installment of EUR 100,000 shall be paid on or before December 31, 2007. In addition, the royalty payments for the second quarter of 2007 will be due and payable together with the first installment of EUR 100,000.

About Stellar Pharmaceuticals Inc.

Stellar has developed and is marketing direct in Canada, and in countries around the world through out-license agreements, three products based on its core polysaccharide technology: NeoVisc(R), for the treatment of osteoarthritis; and Uracyst(R) and the Uracyst(R) Test Kit, its patented technology for the diagnosis and treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Stellar also has an in-licensing agreement for NMP22(R) BladderChek(R), a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements. Actual results may differ materially from those indicated by these forward-looking statements as a result of risks and uncertainties impacting the Company's business including increased competition; the ability of the Company to expand its operations, to attract and retain qualified professionals, technological obsolescence; general economic conditions; and other risks detailed from time to time in the Company's filings.

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