PHARMENG COMPLETES ACQUISITION OF PFIZER MANUFACTURING FACILITY, ANNOUNCES CLOSING OF $20 MILLION DEBT FINANCING AND FULL PAYOUT OF AMOUNTS OWING TO SHROPSHIRE S.a.r.L.

Toronto, Canada, December 31, 2007 – PharmEng International Inc. (TSXV: PII), announced today that its subsidiary, Keata Pharma Inc., has completed its agreement with Pfizer Canada to acquire Pfizer’s manufacturing facility in Arnprior, Ontario, including inventory. Concurrently, Keata has also entered into a supply agreement with Pfizer for the exclusive manufacture of certain Pfizer products for Canada at the Arnprior facility for a period of three years. Keata will also manufacture products from the Arnprior location for two other major pharmaceutical clients with multi-year supply contracts, becoming a world supplier to more than 30 countries. The aggregate revenues of these multi-year supply contracts is estimated by PharmEng to be approximately CAD$75,000,000.

Under the agreement, Keata has agreed to employ substantially all of the workforce of approximately 175 people at the 85,000 sq. ft. facility, including 38 acres of land, all manufacturing equipment and inventory. Inventories acquired include raw materials, packaging components and work in progress.

PharmEng paid cash consideration of $5,907,909 +GST to Pfizer, financed principally through facilities extended by Landsbanki Islands hf. (“Lansbanki”) and BHC Interim Funding II, L.P. (“BHC”).

PharmEng entered into a revolving credit facility (the “Revolving Credit Facility”) with Landsbanki for up to CAD$10 million and has granted Landsbanki a security interest over all of its assets as collateral for the Revolving Credit Facility. The term of the Revolving Credit Facility is three years and the rate of interest is determined by reference to the London Interbank Offered Rate (“LIBOR”) plus 3.25% per annum. PharmEng has also entered into a term loan (the “Term Loan”) with Landsbanki for CAD$5 million. The term of the Term Loan is 3 years and the rate of interest will be determined by reference to LIBOR plus 3.25% per annum.

In addition, PharmEng USA, Inc., as borrower, has entered into a senior subordinated loan (the “BHC Loan”) with BHC, for up to US$5,000,000. The term of this credit facility is 5 years and the rate of interest is 13% per annum. As partial consideration for the BHC Loan, the Company has issued up to 2,700,000 warrants (the “BHC Warrants”) to BHC. Each BHC Warrant will entitle BHC to purchase one common share in the capital of PharmEng exercisable for 2 years from the date of closing at an exercise price of CAD$0.50. Subject to TSX Venture Exchange and board approval,

PharmEng will pay cash commissions of US$240,000 and 172,800 warrants of PharmEng to Brooks Houghton & Company, Inc. and US$60,000 and 29,700 warrants of DOCSTOR: 1399692\3 PharmEng to QRL Fund (together, the “Agents’ Warrants”) as placement agents in connection with the BHC Loan. Each Agents’ Warrant will entitle the holder to purchase one common share in the capital of PharmEng exercisable for 2 years from the date of issuance at an exercise price of CAD$0.525. Both the BHC Warrants and the Agents’ Warrants will be subject to a four month trading restriction from their date of issue.

“The Pfizer facility acquisition represents an important milestone for Keata as it immediately extends the Company’s manufacturing ability to include aseptic products and to provide product into the U.S. and internationally,” states Alan Kwong, CEO of

PharmEng. “This is a key acquisition for the Company to establish ourselves as a global player,” concludes Mr. Kwong. PharmEng is also pleased to announce that it has repaid in full the CAD$3,000,000 loan plus interest announced on October 12, 2007 to Shropshire S.a.r.l.

Just last month, the Company announced the opening of its state-of-the-art 46,400 sq. ft. pharmaceutical manufacturing facility in Cape Breton, Nova Scotia.

“With these two facilities, we are now able share best practices which signal our commitment to manufacturing quality and growth for our Keata division. Again, this acquisition allows Keata flexibility with our manufacturing capabilities and improves cost effectiveness throughout our manufacturing operations,” concludes Mr. Kwong.