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LONDON, ONTARIO--(Marketwire - May 14, 2010) - Stellar Pharmaceuticals Inc. (OTCBB:SLXCF) ("Stellar" or "the Company"), a Canadian pharmaceutical developer and marketer of high quality, cost-effective products for select health care markets, today announced financial results for the quarter ended March 31, 2010. In this press release, all dollar amounts are expressed in Canadian currency and results are reported in accordance with United States generally accepted accounting principles (U.S. GAAP).

For the three-month period ended March 31, 2010, Stellar's total revenues were $577,879 as compared to $772,515 for the same period in 2009. The Company noted that the decrease in total revenues was driven primarily by the absence of licensing revenues in the first quarter of 2010, compared to $219,000 of license revenues being recorded in the same three-month period a year ago. Stellar's licensing revenue fluctuates based on the timing and terms of its global out-licensing agreements. Inclusive of $33,947 in non-cash stock options and $26,790 for amortization recorded in the first quarter of 2010, Stellar's net loss was $247,538, or $0.01 per share, compared to a net profit of $25,177, or $nil per share in the first quarter of 2009.

Stellar ended the quarter in a strong financial position, with no debt and working capital of $2,725,200.

Peter Riehl, Stellar's President and Chief Executive Officer, commented, "This quarter was characterized by some very unfortunate timing. While we had anticipated licensing fees in the first quarter of 2010, they did not materialize until May. Had these licensing revenues been recorded in the first quarter of 2010, total revenues would have shown growth over the first quarter of 2009. In addition, first quarter international sales were down by 6.1% due to one international NeoVisc® order which was rescheduled for delivery from March to May."

"The good news was that domestic NeoVisc®, domestic Uracyst® and international Uracyst® sales grew 10.8%, 13.8% and 30.0% respectively in the first quarter of 2010 compared to the same period in 2009. Although it can not be assured, these strong sales growth trends, combined with the inclusion of the aforementioned licensing fees and a return to international NeoVisc® sales growth, provides us with confidence that the second quarter will be much stronger," Mr. Riehl concluded.

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® and NeoVisc® Single Dose, for the symptomatic treatment of osteoarthritis; and Uracyst®, its patented technology for the treatment of interstitial cystitis (IC), an inflammatory disease of the urinary bladder wall. Both NeoVisc and Uracyst have their CE Mark certification for the European Community. Stellar also has an in-licensing agreement for NMP22® BladderChek®, a proteomics-based diagnostic test for the diagnosis and monitoring of bladder cancer. For more information, please visit the company's website at [ www.stellarpharma.com ].

Forward-Looking Statements

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.

STELLAR PHARMACEUTICALS INC.
BALANCE SHEETS
(Expressed in Canadian dollars)
				As at March 31, 2010				As at December 31, 2009
ASSETS
CURRENT				2010				2009
Cash and cash equivalents			$	1,795,557			$	2,325,212
Accounts receivable, net of allowance of $nil (2009 - $nil)				312,323				293,565
Inventories				652,045				721,061
Taxes recoverable				11,528				1,501
Loan receivable				15,818				15,818
Prepaids, deposits and sundry receivables				147,817				163,698
	Total current assets			2,935,088				3,520,855
PROPERTY, PLANT AND EQUIPMENT, net				1,557,765				1,390,296
OTHER ASSETS				122,227				114,553
	Total assets		$	4,615,080			$	5,025,704
LIABILITIES
CURRENT
Accounts payable			$	69,024			$	228,367
Accrued liabilities				132,900				175,637
Deferred revenues				7,937				2,890
	Total current liabilities			209,861				406,894
CONTINGENCIES AND COMMITMENTS
SHAREHOLDERS' EQUITY
CAPITAL STOCK
AUTHORIZED
	Unlimited Non-voting, convertible, redeemable and retractable
		preferred shares with no par value
	Unlimited Common shares with no par value
ISSUED
23,480,040 Common shares (2009 – 23,480,040)				8,183,638				8,183,638
	Additional Paid-in capital options - outstanding			123,509				89,562
	Additional Paid-in capital options - expired			724,127				724,127
				9,031,274				8,997,327
DEFICIT				(4,626,055	)			(4,378,517	)
	Total shareholders' equity			4,405,219				4,618,810
	Total liabilities and shareholders' equity		$	4,615,080			$	5,025,704

STELLAR PHARMACEUTICALS INC.
STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME
(Expressed in Canadian dollars)
		For the Three Month Period
		Ended March 31,
		2010				2009
PRODUCT SALES		$	549,510			$	544,419
ROYALTIES & LICENSING REVENUE			28,369				228,096
TOTAL REVENUE FROM ALL SOURCES			577,879				772,515
COST OF PRODUCTS SOLD			203,757				154,955
GROSS PROFIT			374,122				617,560
EXPENSES
	Selling, general and administrative		567,932				578,052
	Research and development		26,270				5,608
	Amortization of assets (non-manufacturing property, plant and equipment)		13,663				13,698
			607,865				597,358
(LOSS) INCOME FROM OPERATIONS			(233,743	)			20,202
INTEREST AND OTHER INCOME			1,513				4,975
LOSS ON DISPOSAL OF EQUIPMENT			(15,308	)			—
(LOSS) NET INCOME AND COMPREHENSIIVE (LOSS) INCOME FOR THE PERIOD			(247,538	)			25,177
DEFICIT, beginning of period			(4,378,517	)			(4,615,553	)
DEFICIT, end of period		$	(4,626,055	)			(4,590,376	)
(LOSS) EARNINGS PER SHARE - Basic and diluted		$	(0.01	)		$	0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - Basic and diluted			23,480,040				23,527,318

STELLAR PHARMACEUTICALS INC.
STATEMENTS OF CASH FLOWS
(Expressed in Canadian dollars)
			For the Three Month Period
			Ended March 31,
			2010				2009
CASH FLOWS USED IN OPERATING ACTIVITIES
	Net (loss) income		$	(247,538	)		$	25,177
	Items not affecting cash
		Amortization		26,785				34,995
		Loss on disposal of equipment		15,308				––
		Issuance of equity instruments for services rendered		33,947				––
Change in non-cash operating assets and liabilities				(140,920	)			203,043
CASH FLOWS USED IN OPERATING ACTIVITIES				(312,419	)			263,215
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES
	Additions to property, plant and equipment			(221,853	)			(197	)
	Increase in other assets			(8,014	)			(6,957	)
	Proceeds from sale of equipment			12,630				––
CASH FLOWS USED IN INVESTING ACTIVITIES				(217,237	)			(7,154	)
CASH FLOWS USED IN FINANCING ACTIVITIES
	Repurchase of common shares for cash			––				(21,292	)
CASH FLOWS USED IN FINANCING ACTIVITIES				––				(21,292	)
CHANGE IN CASH AND CASH EQUIVALENTS				(529,655	)			234,769
CASH AND CASH EQUIVALENTS, beginning of period				2,325,212				2,105,966
CASH AND CASH EQUIVALENTS, end of period			$	1,795,557			$	2,340,735

Contributing Sources

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