ChondroGene Closes on $2 Million of Private Placement

TORONTO, CANADA (May 26, 2003): ChondroGene Limited (TSX Venture: YDG) reported today that it has closed on $2,000,000 of the private placement previously announced on April 29, 2003. Dundee Securities Corporation acted as the Company’s financial advisor and agent for the placement of 4,000,000 common shares at $0.50 per share for gross proceeds of $2,000,000. Dundee received a fee of $100,000 plus a broker warrant entitling it to purchase 200,000 common shares of ChondroGene for a period of 24 months at a price of $0.50 per share. The shares issued are subject to a 12 month hold period. The remaining $1,000,000 of the private placement is expected to close on or about June 16, 2003.

"We are delighted by the strong demonstration of support shown by our existing and new investors, along with the efforts of Dundee, which allowed us to close this initial portion of the financing so quickly," stated Dr. K. Wayne Marshall, President and CEO of ChondroGene. "We are excited by the prospect of being able to accelerate our existing biomarker and therapeutic target programs. These funds will also allow us to strengthen our intellectual patent portfolio worldwide and to develop commercial applications of our core technologies."

Forward-Looking Statements