ChondroGene Completes US$5 Million Private Placement Through Rodman & Renshaw

TORONTO, CANADA (August 25, 2004): ChondroGene™ Limited (TSX Venture: CDG) reported today that it has raised US$5,000,000 by way of a brokered private placement in the United States. Rodman & Renshaw, LLC placed 5,263,149 common shares at US$0.95 per share for gross proceeds of approximately US$5,000,000. Rodman was paid a fee of 6%, or US$300,000, on the gross proceeds raised, plus a broker warrant entitling Rodman to purchase common shares equal to 6% of the number of shares placed, or 315,790 shares, for a period of 24 months at a price of US$0.95 per share. The shares issued are subject to a 4 month hold period. On August 10, 2004 the Company announced its intention to raise US$4.5 million, and subsequently on August 23, 2004, announced its intention to increase the offering to US$5 million in order to accommodate investor demand.

"We are very encouraged by the positive investor response to this offering in the US," stated Dr. K. Wayne Marshall, President and CEO of ChondroGene. "This financing will broaden ChondroGene’s exposure to a whole new group of investors, analysts and partners in the US. In addition, ChondroGene has been invited to present at Rodman’s Techvest 6th Annual Healthcare Conference in New York in late October."

Forward-Looking Statements